Latin America denotes the region south of the United States i.e., Mexico, the Caribbean Islands and South America. The various factors for the decline of india’s presence in Latin America.

1) Linguistic and Cultural Unfamiliarity

Spanish and Portuguese are the main languages of the Latin America region. While English remains the language for Indians to communicate with rest of the world. The familiarity of language brings with it cultural and idea exchanges and paves the way for greater cooperation. Unfamiliarity in this domain has obstructed the India Latin America relations from achieving their true potential.

China has over 60 Latin American study centres besides hundreds of Spanish and Portuguese language institutes. In India, there is a need for more Latin American study centres and language institutes.

2) Absence of Diaspora

While India has the highest diaspora across the world, the figures do not do well when it comes to Latin America. There are almost no settled Indian-origin industrialists or businessmen with the heft to act as nuclei in Latin America for their erstwhile compatriots or pull the investment from there into India, a model that has created vibrant linkages with other countries. Their modest economic conditions do not generate the levels of remittances nor tourism to warrant the attention bestowed on communities of Indian origin elsewhere. As Amb. Deepak Bhojwani suggests, “This may be the only region where professionals outnumber the settlers from India.”

3) Geographical Distance

Among all continents, South America is the farthest from India. The direct air and shipping links are considered uneconomical, because of low volume. Although both sides see each other as exotic tourism destinations, the industry has not achieved critical travel mass which will ensure direct connectivity. However, as S Jaishankar suggests, “We live in a globalized era and we must now make sure that distance is no longer an impediment. Modern logistics offer us collaborative possibilities so do modern communications.”

Further, this factor also doesn’t deter China, whose trade with the region is around eight times that of India, nor does it deter Indians travelling to the US, whose east and west coasts are as far from India as Sao Paulo and Mexico respectively.

4) Diverse Geography and Lack of Regional Cohesion

Indian companies shipping to Brazil cannot automatically access all other countries and markets in the region, given problems of infrastructure and connectivity. Thus, India has to ship separately to the eastern and western coasts of South America.

Further, it should also be understood that when India deals with the EU or ASEAN, particularly for trade, it deals with the whole region as a whole, since they are customs unions. This is not the case in Latin America. Mercosur and Pacific Alliance, prominent trade blocs, do not cover all the countries of South America, even together. Venezuela is a full member of Mercosur, but its membership has been suspended since 1st Dec 2016. Thus, India transacts business bilaterally with more than 20 countries and occasionally engages at the regional level.

5) Political Environment

Historically, Policymakers in New Delhi have not given sufficient attention to Latin America. There are no strategic interests for India in the region. Latin America rarely inserts itself in the arena of geopolitics, no country in the region has nuclear weapons, and the region has not seen an intra-country war since the late 1800s. Partnership with the region does not have a great power charm associated with it and it has historically been consigned to the corners of India’s foreign policy priorities.

Further, the internal politics of the region also looms large on bilateral relationships. Most of the countries in the region have a political system, which can be termed a ‘procedural democracy’. Any abrupt change in leadership changes policy priorities and prevents long-term relations from developing. The large resources of the region, coupled with an unstable political system also invite great powers to interfere in the region, affecting their external relations. Venezuela, which holds the largest crude oil reservoirs in the world is a classic example of this.

6) Variable Economic Growth

While the Indian economy continues growing around 6-7 percent annually, with an optimistic future outlook, the same is not the case with Latin America. Various factors have ensured that Latin America does not grow steadily on the economic front. This results in fluctuations in trade volumes as well as composition. This also prevents long-term trade relations from being built.