India’s trade with Latin America presents significant opportunities despite recent declines from its peak of $27 billion in 2022. Shifting global dynamics, including geopolitical uncertainties and changing trade policies, are prompting Latin American nations to diversify their trade partnerships. Key sectors like agrochemicals, pharmaceuticals, machinery, and automobiles offer strong growth potential for India.
Suhayl Abidi highlights the need for a strategic approach, including increased participation in trade fairs, setting up distribution hubs, and leveraging market intelligence to strengthen India’s foothold in the region. With these efforts, India aims to boost its exports to Latin America to $50 billion by 2030.
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Latin America’s merchandise imports saw a modest recovery in 2024, growing by 3.2% after a 6.8% contraction in 2023, according to the Inter-American Development Bank (IDB). Despite this positive trend, India remains a relatively small player in the region, ranking 14th among exporters with a market share of just 0.7%.
India’s exports to LAC peaked at US$ 27 billion in 2022 but have since declined. However, shifting geopolitical dynamics present a significant opportunity for India to strengthen its trade presence. Growing concerns over dependence on the U.S., coupled with potential policy shifts under a new Trump administration, are pushing LAC countries to diversify their trade partnerships. The upcoming BRICS meeting in Brazil could further accelerate this shift, providing a platform to discuss bilateral trade with the Brazilian leadership.
India has strong export potential in several key sectors that align with Latin America’s needs. One such area is agro-inputs, as LAC is the world’s largest net food-exporting region, with some countries deriving up to 90% of their export earnings from agriculture. Indian agrochemical exports are largely concentrated in Brazil, but expansion into other markets could unlock new opportunities. Similarly, in specialty chemicals, India is already a top global competitor, ranking fourth in organic chemicals and fifth in miscellaneous chemical products in LAC. Diversifying into sectors like food and cosmetics chemicals—where India holds a competitive edge—can drive further growth.
Another promising sector is pharmaceuticals and healthcare. India currently ranks 9th in pharma exports to LAC, but with generic drug penetration at just 45-50%, there is room for expansion. Additionally, Brazil and Argentina’s large bovine populations present a major opportunity for Indian animal vaccines. The medical and surgical instruments market is another area where India has a stronghold, already accounting for 10% of LAC’s imports. The orthopedic implants sector, where India is a recent entrant with a 2% market share, is also poised for growth due to India’s cost and quality advantages.
India’s machinery and engineering goods sector has demonstrated strong demand in LAC, with exports reaching US$ 2.73 billion. Indian companies have gained market share in the Middle East—traditionally dominated by Western firms—by offering competitive pricing and quality. A similar strategy could work in LAC, particularly in transformers, construction machinery, and industrial equipment. The automobile sector presents another opportunity, as India currently ranks 13th in vehicle exports to the region. While the U.S. dominates this segment, trade realignment could help India improve its standing. India has already proven its competitiveness in motorcycles, securing the second spot in exports, ahead of China in Africa through better after-sales service and spare parts availability. A similar approach in LAC could boost market share, particularly in four-wheelers and commercial vehicles.
Other sectors, such as textiles and lifestyle products, also present opportunities for India to regain lost ground. India currently ranks third in carpets and floor coverings and fourth in home textiles in LAC, but exports have slipped in recent years. Meanwhile, India is a globally competitive supplier of essential oils but holds only a 1% share in LAC, despite the market growing at over 5% annually. A more aggressive market entry strategy could enhance India’s presence. Additionally, sunrise industries like renewable energy, defense, shipbuilding, railway rolling stock, and medical diagnostics offer fresh engagement opportunities. Ayurveda products, supported by their increasing popularity in Latin American universities, also have strong market potential.
To strengthen India’s trade with LAC, a multi-pronged strategy is essential. Increasing participation in regional trade fairs and B2B meetings can improve visibility and create business networks. Establishing a BharatMart-style distribution center in Panama’s Colon Free Trade Zone—one of the largest trade hubs in the Americas—could streamline exports, reduce logistics costs, and facilitate access to multiple LAC markets. Additionally, Indian embassies should play a proactive role in providing market intelligence, offering regular insights into product demand and trade barriers in individual LAC countries to help businesses make informed decisions.
By leveraging these opportunities and implementing targeted strategies, India can significantly enhance its trade volume with Latin America. With the right approach, India can work toward its ambitious goal of US$ 50 billion in exports to LAC by 2030. The time to act is now.
Suhayl Abidi is Research Advisor, GOG-AMA Centre of International Trade & Consultant, Centre for VUCA Studies, Amity University. Views expressed are personal and do not necessarily reflect the views of India Business and Trade.
