Business

 

Trade

Investment and Joint Ventures

Focus-LAC programme

PTA with Mercosur and Chile

Lines of Credit

Development Partnership

DTAA

BIPA

Business Practices

Guide for Business with Argentina, Uruguay and paraguay

 

Trade

-India's trade with Latin America increased to 25 bn $ in 2011 from 23 bn in 2010
-India's exports went up by 28 % in 2011 reaching 11.6 bn from 9 bn in 2010.
-India's imports declined to 13.5 bn in 2011 from 14 bn in 2010

-Brazil is the leading trade partner followed by Venezuela, Mexico, Chile, Argentina and Colombia
-Colombia is the third largest export destination of India after Brazil and Mexico.

-crude oil is the main item of India's imports accounting for 8 bn $. Copper imports were about 2 bn and Soy oil imports were over a billion.
-Reliance imported 7.5 bn worth crude from Latin America in 2011, of which 5 bn came from Venezuela. India's single largest export is diesel. Reliance exported 3.4 bn $ of diesel to Brasil in 2011.

-These are preliminary trade figure

INDIA – LATIN AMERICA TRADE FIGURES -  YEAR 2011

INDIA	IMPORTS  In U$S Millions	EXPORTS in U$S Millions	TOTAL TRADE In U$S Millions
1) BRAZIL	3200	6080	9280
2) VENEZUELA	5000	580	5580
3) MEXICO	1250	2000	3250
4) CHILE	1780	400	2180
5) ARGENTINA	1210	560	1770
6) COLOMBIA	600	880	1480
7) PERU	240	510	750
8) ECUADOR	24	160	184
9) PARAGUAY	74	78	152
10) PANAMA	28	96	124
11) COSTA RICA	14	95	109
12) URUGUAY	20	86	106
13) HONDURAS	2	62	64
14)DOMINICAN REP.	11	42	53
15)CUBA	6	46	52
16) GUATEMALA	3	37	40
17) EL SALVADOR	2	32	34
18) BOLIVIA	28	4	32
19)) NICARAGUA	2	25	27
TOTAL	13494	11693	25187

 

India´s trade with Latin America in 2010

India’s trade with Latin America has gone up to US $ 23 billion in 2010 from US $ 2.6 billion in 2001.

Indian exports to the region increased from 1.5 billion dollars in 2001 to 9 billion in 2010 and imports went up to US $ 14 billion in 2010 from 1.1 billion in 2001.

 

India’s trade with Latin America in billion US $.

Year	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
India’s Exports	9	7.5	8	5	4	3.2	2	1.7	1.7	1.5
India’s Imports	14	9.7	11	6	5.2	3.1	2.3	1.9	1.7	1.1
TOTAL	23	17.2	19	11	9.2	6.3	4.3	3.6	3.4	2.6

India accounts for a small portion of the Latin American trade which was 1.7 trillion dollars in 2010. Latin America exported 896 billion dollars worth of goods and imported 793 billion in 2010.

 

India´s trade with Latin American countries – 2010
(in million US dollars)

Grouping	Country	Imports of India	Exports of India	Total
Mercosur	Argentina	2032	496	2528
	Brazil	3492	4242	7734
	Paraguay	72	65	137
	Uruguay	14	69	83
Special member	Venezuela	5178	226	5404
Andean Community	Bolivia	5	55	60
	Colombia	365	686	1070
	Ecuador	10	200	210
	Peru	219	498	717
Associate	Chile	1582	416	1950
Central America	Costa Rica	12	27	39
	Guatemala
	Honduras	4	33	37
	Nicaragua	18	48	66
	El Salvador	5	30	35
	Panama	7	22	29
	Belize
	Dominican Republic
NAFTA	Mexico	1000	1600	2600
Others	Cuba

 

The Chinese trade with Latin America was 166 billion dollars in 2010. Chinese exports were 87 billion and imports were 79 billion

 

Leading trade partners of India

Brazil is the leading trading partner of India, followed by Mexico, Argentina, Chile and Colombia.
India’s trade with the major markets of Latin America (Figures in million dollars) below:

 

India´s exports to Latin America

Chemicals, bulk drugs, pharmaceuticals, diesel oil, automobiles, tractors, auto parts, two and three wheelers, equipments and machinery, medical and scientific instruments, hand tools, machine tools, optic fibers, blank CDs amd DVDs, tyres, electrical items, leather products, plastic products, sports items, spices, ayurvedic and herbal products, textiles, handicrafts and  incense sticks.

Chemicals including bulk drugs form the largest part of India´s exports.

The main export to Brazil is diesel oil by Reliance. In 2010 the export was 1.7 billion dollars accounting for 40 percent of India´s total exports to Brazil.

HAL has exported seven Dhruv helicopters to Ecuador Air Force. Other countries such as Bolivia, Chile and Argentina have shown interest. The region has started opening up for Indian defence products.         

Indian mobile phone maker Micromax entering Brazilian market.

Micromax is planning to enter the north eastern region of Brazil to start with. It already has a distributor in Sao Paulo. Micromax is a new player in India since 2006 and has gained space in the competitive Indian market with its special features and price. It has become the third largest vendor of GSM phones.

 

Indian imports from Latin America

Petroleum crude, copper, soy oil, sunflower oil, minerals, sugar, ethanol, precious and semi precious stones, agro products, leather, wool, metal scrap, wood, equipment and machinery, aircrafts (from Brazil), wine and fresh fruits.

Petroleum crude, edible oil and copper are the top three items accounting for over three fourths of the total imports from Latin America. Imports of these three items are expected to increase in the coming years in view of the growing gap between demand and domestic production in India.

Latin America has become a new regular source for India´s crude oil imports in the last ten years and crude oil is the leading item of India´s imports from the region. Venezuela has become the eighth largest supplier of crude oil to India. The crude oil imports of Reliance accounts for over fifty percent of India´s total imports from Latin America. Reliance has been importing crude oil from Mexico, Venezuela, Brazil, Colombia and Ecuador. About two-thirds of Reliance’s imports from Latin America came from Venezuela which accounted for 59 percent, Mexico 21 percent and Brazil 14 percent. Reliance imported about 300,000 barrels a day of crude on average from Latin America in 2010. This accounted for about a quarter of the company’s total imports during the period, compared with 13 percent in the same period of 2009. In 2009 Reliance bought 155,000 bpd from Latin America. This went up to 380,000 barrels a day in the first four months of 2010.

Essar has also started imports of crude oil from Venezuela. Given the discovery of large new reserves in Brazil, the growing investment of Indian companies in the region and the increasing domestic demand , Indian imports are set to increase in the future.

Argentina is the major source of edible oil and it is followed by Brazil and Paraguay. Wheat is occasionally imported from Argentina while sugar is sourced from Brazil, whenever there is shortfall in India. In 2010, India imported 1.8 billion dollars worth of soy oil from Argentina.  There is scope to source pulses, ethanol and biodiesel from Brazil, Argentina, Uruguay and Paraguay. 

Copper is the predominant item of India´s mineral imports from Latin America. Most of it comes from Chile in the form of copper concentrates. Imports from Chile were 1.5 billion in 2010. The other sources are Brazil, Argentina and Peru.

 

 

Investment and joint ventures

Indian companies including NRI firms have invested about 12 billion dollars in the region in IT, pharmaceuticals, agro-chemicals, steel, mining, agribusiness and other sectors. More investment is expected to flow in the coming years as a number of Indian companies have shown interest in entering the region.

Information Technology

Indian IT companies have established software development centres, BPOs, KPOs and Call Centres in fourteen countries (Argentina, Brazil, Chile, Uruguay, Mexico, Colombia, Peru, Venezuela, Ecuador, Panam, Costa Rica, Nicaragua, Dominican Republic and Guatemala) of the region employing 20,000 Latin Americans. The Indian companies have developed a new near-shore business model of 12/12 in which they service their North American clients for 12 hours from the same time zone operations in Latin America and the remaining 12 hours from India. The Indian companies leverage the multilingual skills of Latin Americans who speak Spanish, Portuguese and Italian to service European clients. They use the Latin Americans to reach out to the 40 million strong Hispanic market of US. The Indian companies have also got contracts from local Latin American companies.

TCS is the pioneer and has the largest presence in the region with Global Delivery Centres in eight Latin American countries employing 7000 local staff in Chile (2000), Brazil (2000), Uruguay (900), Mexico (1000), Colombia (300), Argentina (300), Peru and Ecuador.
The major local contracts of TCS are a 200 million dollars contract with ABN Amro Bank in Brazil, a 140 million dollars contract from Banco Pichincha of Ecuador, and a $200 million contract from the Social Security Institute of Mexico (IMSS). TCS has established a Regional Training Centre at Montevideo in Uruguay.

Aegis, which is part of Essar Group, has acquired an Argentine BPO ¨Action Line¨ in 2010 with 5000 staff.  This is the largest Indian BPO in Latin America. It has centres in Buenos Aires, Cordoba, Tucuman and Bahia Blanca. They have another centre in Costa Rica with 450 staff.

Infosys- has set up two Global Delivery Centres in Mexico and another one in Belo Horizonte, Brazil.

Wipro has about 1000 employees in its two BPO centres in Mexico and Brazil (Curitiba).

Mahindra Satyam – has 900 Brazilian employees in its centres in Sao Paulo and Londrina in Brazil.

HCL has opened IT centres in Brazil ( 315 staff in Sao Paulo and Port Alegre) , Mexico ( 70 staff) and Buenos Aires,.

Genpact has BPO operations in Brazil, Mexico and Guatemala and has opened a new centre in Colombia in October 2011.

Patni Computer has a centre in Queretaro, Mexico and another one in Campinas in the state of Sao Paulo.

Cognizant has set up operations in Argentina with 200 staff.

24/7 from Bangalore has BPOs in Guatemala and Nicaragua employing 1500 local staff.

IREVNA has set up a KPO unit in Buenos Ares for equity research with 70 Argentine staff.

Copal Partners the financial research company has established an office in Buenos Aires in the second half of 2010.

E-Valueserve has a KPO unit for financial research services in Chile, with 70 staff.

Cellent has a joint venture centre in Argentina in mobile software

Iflex (now Oracle) has got contracts for banking solutions worth 40 million dollars in Chile, Panama, Mexico and Venezuela and other countries in the region. It has an office in Santiago.

Sasken Communications has set up a subsidiary company for IT development and support in Nuevo Leon in Mexico.

Geodesic Ltd has acquired a Uruguayan mobile phone software company (40 staff) in Montevideo in 2009.

Hexaware Technologies has acquired a Mexico-based IT company Fox Frames for 34 million dollars to expand its software testing business.

Polaris Software has opened a centre in Santiago, Chile since May 2009.

Prokarma has a centre in Buenos Aires with 100 staff in the name of ABC Consulting

Manthan Systems, a provider of Business Intelligence and Analytics solutions for the retail and consumer goods sectors has opened an office in São Paulo.

Mann India Technologies has operations in Venezuela, Panama, Dominican Republic, Ecuador and Costa Rica

Global Sourcing Solutions has call centres and BPOs in Peru, Colombia, Argentina and Bolivia.

APTECH, NIIT and TATA Infotech have collaborated with Colombian universities and private companies to establish about 20 IT education centers in several Colombian cities. APTECH has training centres in Brazil, Mexico, Peru and El Salvador.

 

Pharmaceuticals

Indian companies have established manufacturing units in Brazil, Mexico and Argentina and have marketing offices in other countries.

Ranbaxy was the first to break into the region with investment in Brazil in the nineties. They have a turnover of 50 million dollars in Brazil.

Dr.Reddy's Labs has bought a pharma plant for 60 million dollars in Mexico in 2006.

Torrent has a Brazilian subsidiary with 300 Brazilian employees and a business of around 60 million dollars.

Zydus Cadila  has acquired a Brazilian company Nikho, which has a turnover of over 60 million dollars.

Glenmark has taken over an Argentinian Pharma company “Servycal SA” in 2005 and has set up a new plant for oncological products. It has also invested in a new facility near Sao Paulo and has a turnover of 40 million dollars.

Cellofarm (Strides Arcolab) has two factories in Brazil, one in Vitoria, Espirito Santo and another in Campos, Rio de Janeiro. They have over 40 million dollars business.

Manish Pharma has acquired companies in the states of Sao Paulo and Santa Catarina in Brazil.

Cipla has presence in Brazil and is in the process of forming a subsidiary

Claris Lifesciences has a local subsidiary in Brazil

IPCA Labs has production facilities in Brazil and an office in Colombia.

Aurobindo has invested in a warehouse facility in Anàpolis, Brazil.

Unichem, Intas and Sunpharma have established subsidiaries in Brazil.

Lupin, Zydus Cadilla and Emcure are among the pharma companies actively looking for acquisition/joint ventures in the region.
Indian pharma companies have marketing offcies in Peru, Nicaragua and Caracas besides in the other major markets.
 

 

Agribusiness

Shree Renuka Sugars Ltd has invested 400 million dollars in the acquisition of two Brazilian sugar groups:
a) Brazil's Equipav SA Acucar e Alcool which owns two large sugar mills (10.5 million tons annual capacity) with integrated co-generation facilities (203 MW) and 115,000 hectares of cane growing land in southeastern Brazil.
b) Vale Do Ivai S.A. Acucar E Alcool with its two sugar and ethanol production facilities in the state of Parana, with a combined cane crushing capacity of 3.1 million tonnes a year and 18000 hectares of land.
With these Brazilian acquisitions, Renuka has become the seventh largest sugar producer in Brazil.

Olam, a Non-Resident Indian company with headquarters in Singapore has entered into agricultural production in Argentina and cultivates 30,000 hectares. Peanut is their main crop and they have also acquired two peanut processing plants. Besides peanuts they grow soya and wheat and are starting rice production in Uruguay and Argentina. In Brazil they have a turnover of 750 million dollars in agrocommodities trading.

Sterling Group has bought a 2000 hectare olive farm in Argentina.

A consortium of 16 member companies of the Solvent Extractors Association of India has a proposal to invest US $ 50 million to acquire land to grow oilseeds in Uruguay.

South America and especially Brazil, Argentina, Uruguay and Paraguay offers opportunities for Indian acquisition of farmland. This region has very large areas of fertile land and has 26 percent of the world´s fresh water reserves. The region can increase the area of cultivation by 100 million hectares. They have a large surplus production for exports and their population and consumption are relatively small. The region has high yields, advanced technologies, best practices, infrastructure and logistics for agribusiness.

Indian companies can grow oilseeds, pulses, wheat, sugarcane and take back to India edible oil, pulses, sugar, fuel ethanol and biodiesel.
Indian companies can also acquire commercial forests and take back timber and paper pulp which are regular imports of India. The Aditya Birla group has shown interest in commercial forestry in the region to produce viscose fibre.

 

Agrochemicals

United Phosphorus Ltd (UPL) of Mumbai has acquired two Argentine agrochemical companies and a seed company Advanta. Their business turnover is around 100 million dollars. In 2008, UPL bought a Colombian agrochemical company EvoFarms.

In Feb 2011 UPL has acquired a 50% stake in Sipcam Isagro Brazil valued around 50 million dollars. Sipcam, a local producer and distributor of agrochemicals, has a formulation plant in Uberaba with revenue of about $1 billion in 2010. UPL has operations in Mexico too.

UPL announced on 25 July 2011 that it has invested 150 million dollars and acquired 51 per cent stake in Brazilian firm DVA Agro Do Brasil (DVA Agro Brazil).

DVA Agro Brazil, with a net revenue of $ 130 million in 2010, is in the production and marketing of crop protection products. It has a formulation plant in Brazil and is undergoing expansion.

Punjab Chemicals and Crop Protection Ltd (PCCPL) has acquired an Argentine company “Sintesis quimica”, which has 2 agrochemical factories and turnover of 50 million dollars.

IFFCO has invested 25 million dollars in Americas Petrogas, a Canadian company, which has oil and gas projects in Argentina and a potash mine in Peru. IFFCO is working on the potash project in Peru, as part of their global fertiliser production strategy. They are planning construction of a potassium chloride plant in Bayóvar (Piura) which will involve an investment of 200 milion dollars. IFFCO is also considering a Urea production plant based on the gas produced by Americas Petrogas in La Pampa province of Argentina.

 

Energy

OVL (ONGC Videsh Ltd) has acquired off-shore oil fields for about 500 million dollars in Brazil. OVL is part of a consortium in the exploration and production of oil from Carabobo-1 project in the Orinoco region of Venezuela. The other Indian members of the consortium are Indian Oil Corporation and Oil India Ltd. The Indian companies have 18% share while Repsol and Petronas have 11% each and the Venezuelan state oil company has 60% share. The Indian investment in this project is 2.18 billion dollars. The field will start producing 400,000 bpd of which the Indian consortium is entitled to 72,000 bpd for 25 years. OVL also has another joint venture with PDVSA for exploration and production of oil in the San Cristobal oil field.

In Colombia, OVL has acquired a producing field (30,000 bpd) in a 50:50 joint venture with Sinopec. OVL investment is 600 million dollars in this jv company called as Manasarover Energy Colombia Ltd. OVL has also taken exploration rights for some offshore oil blocks in Colombia.
OVL has offshore oilfield concessions in Cuba on its own as well as separately as part of a consortium lead by Repsol.
OVL is exploring opportunities in Ecuador and Argentina.

Bharat Petro Resources, subsidiary of BPCL, along with Videocon International have acquired ten blocs in Brazil valued at US$ 280 million. The Indian consortium has 40% in these blocks and Petrobras 60%. They have alreay struck oil in some of the blocks.

Reliance has acquired off-shore oil blocs in Colombia in the Borojo North and South blocks in the Pacific coast for an estimated US $ 50 million. Reliance signed a deal with Ecopetrol of Colombia in December 2009 under which Ecopetrol would take a 20 percent stake in these blocks and would be their operator.
In Peru, they have got hydrocarbon concessions in a joint venture with an Argentine and an Australian company. They are interested in other countries of the region including Venezuela, and in upstream ventures in Mexico and Central America

Jindal has acquired some gas blocs in Bolivia. They have also got hydrocarbon blocks in Peru.

Assam company has entered into a Farmout Agreement with Sismopetrol and R3 in Colombia for exploration and production of an oil block known as ANH EL Triunfo located in Casanare in Colombia. The block size is 10,200 hectares and contains one discovered well (La Cabana). Assam Company has 70% Participating Interest in the said Block with Sismoperrol holding 30% Participating Interest.

South America is becoming a player in the global petroleum market. Brazil has discovered large new reserves of oil and is set to become a significant exporter. Venezuela is already the Saudi Arabia of the region with its reserves of over 200 billion barrels. Mexico, Ecuador and Argentina also export crude oil. Colombia and Peru also have sizeable oil reserves and are under-explored.

In the non-conventional energy sector, Brazil has emerged as a global pioneer and leader in fuel ethanol and more countries in the region are following their lead. Argentina is the leading exporter of biodiesel produced from soya.

Many projects are coming up in the arid areas of Brazil, Argentina, and Paraguay as well as in Central America and Caribbean to grow jatropha for biodiesel. Indian companies can enter this sector for investment and joint ventures.

Gammon India Ltd has established a subsidiary company Campo Puma Oriente SA ( based in Panama ) which operates the Puma oil fields in Ecuador which consists of eleven wells with proven reserves of 8 million barrels. So far, they have drilled seven wells which produce 1,500 bpd. The contract for the 20-year lease of Puma fields was signed in March 2008.
The Puma field investment is a joint venture with Joshi Technology International of USA. Gammon has 66.4% and Joshi 33.6%. The joint venture company in Ecuador is called as Consorcio Pegaso They have invested 50 million dollars till December 2010 and plan to invest 51 million dollars more in the next five years.
Joshi company, founded by Dr Joshi produces 5000 bpd of oil in Colombia. They also have oil fields in India and USA.
The Puma block is in the orient basin located 400 km from the capital Quito. The block has an area of 166 sq kms.

 

Wind Energy

Suzlon Energy Ltd of India has set up a 225 MW wind energy project in north east Brazil. In 2010, they have got another project of 218 MW in Ceara and Rio Grande de Norte provinces. They are establishing a plant in Brazil to produce 2 MW turbines with an annual capacity of 400 MW.

 

Mining and Minerals

Jindal Group is the first one to enter this sector through their 2.3 billion dollars investment in the El Mutun iron ore project in Bolivia. They will export most of the iron ore. Jindal has also bought a mine in northern Chile for 53 million dollars to extract magnetite.

Aditya Birla Group has acquired three aluminium plants in Pindamonhangaba, Ouro Preto and Aratu in Brazil. It has a plan to increase its aluminium production capacity by 20 percent to 250,000 tons by 2014. It will invest $300 million.
The group has also acquired a carbon black plant in Brazil.

Tega Industries Limited has acquired a Chilean company Acotec S.A in  Feb 2011. Acotec is a $35 Mn company providing products and solutions for abrasion, corrosion and fluid transportation systems to the mining industry in Chile, Peru, Argentina and Bolivia.

Essar group has bagged an iron ore concession in Amapa, in northern Brazil. They will supply the iron ore to their steel plant in Trinidad and Tobago, which is under construction.
Essar is building a 2.5-million-tonnes steel plant in Trinidad and Tobago. The main attraction for the steel venture is the availability of abundant and inexpensive natural gas used for steel production.

Jindal is going to build a small steel plant, the first-ever in Bolivia, as part of their iron ore mining project.

Arcelor Mittal has steel plants in Mexico, Trinidad and Tobago, Argentina and Brazil. They have acquired steel-finishing and distribution companies in Argentina, Uruguay and Costa Rica.

Zuari Industries Limited of KK Birla Group and its JV partner Mitsubishi Corporation has acquired 30% stake in Fosfatos del Pacifico SA, Peru (Fospac) for $46 million through the Singapore-based JV company - MCA Phosphates Pte Ltd. The mine is located in Bayovar area in the province of Pieura, Peru and is expected to have an initial production capacity of 2.5 Mn Metric Tons.

 

Ispat Group is in the process of acquiring concessions for iron ore in Brazil and for coal in Colombia.

NALCO has announced plans to invest in copper mining in Chile.

Osho Group of plans 70 m $ in Paraguay. Veerendra Agarwal of Osho Group is in talks for acquisition of a steel mill and a cement plant in Paraguay. he is also interested in investment in Argentina.

Zamin Group, based out of London (owner Pramod Agarwal) has already invested over 40 million dollars in the Minera Aratiri iron ore mining prject at Valentine in uruguay. 18 million tons of concentrated iron ore will be produced and exported by 2013-14. The ore will be sent through a new 215 km slurry pipeline to a dedicated port for export. Reserves said to be over 2.1 billion tons. Total project cost estimated around 3 billion dollars. Zamin also has the Greystone iron ore project in Brazil where it is targeting production by 2016 of 6-8 million mt/year of pellet feed.

They have mines in Brazil, Bolivia and Peru

IRK International has acquired an iron ore mine in Julica, Peru for 35 million dollars. The name of their local company is Pacific Minerals and Metals del Peru. The production is expected to be 500,000 tons in 2011.

Minergy Resources of India has acquired mines in Brazil

Minergy has a JV with Neepaz Mineral Resources and have acquired about 184,000 ha of very prime Iron Ore and Gold Concessions in the State of Tocantins and have already commenced implementation of an exploration work program. They have

- 23 concessions for Iron ore
– 1 concession for Gold
– Total area is 1688 sq kms
– All the concessions are located on both side of Palmas, within area of 240kms x 170 kms

Minergy Brazil has recently acquired 24000 hectares of prime diamondiferous areas in the Parana State in Brazil, there is artisanal Diamond Production within the acreage both in the Terraces and the fluvial system in the concessions. We are currently planning a work program for the exploration and development of Diamond production.

Indo Borax has acquired a small borax mine in Argentina and has plans for more acquisitions.

 South America is endowed with rich reserves of minerals such as copper, iron ore, gold, silver and diamond. India will need more of these to fuel its high growth and consumption in the coming decades. There is scope for mining ventures in Argentina,  Brazil, Chile, Bolivia, Colombia and Peru

 

Automobiles

Mahindra has a joint venture for assembly of Scorpio 4-wheel drive vehicles in Manaus, Brazil and another JV for assembly of tractors in Venezuela.

Tata Motors is in talks with Iveco of Italy for a possible joint venture to make light commercial vehicle in Argentina.

Ashok Leyland is exploring possibility of joint venture with Plaza Group of Argentina to produce buses and trucks.

Sonalika Tractors is exploring possibility of assembling their tractors in Argentina in collaboration with Apache group.

Bajaj, TVS and Hero Honda motorcycles are assembled in Colombia.  TVS has 26% stake in a Colombian company TVS Andina S.A.

TVS has tied up with DAFRA Motos, a Brazilian company of the Grupo Itavema which has a manufacturing plant at Manaus with capacity to produce 200 thousand motorcycles annually.  In this plant TVS Apache RTR 150 motorcycles are produced.

Bajaj three wheelers are assembled in Medellin and the Colombian government has authorised Bajaj Autos to be used as public transport in municipalities with population less than 50,000.

RSB Transmissions has opened a plant at Silao in the state of Guanajuato in Mexico in April 2011. The plant will produce transmission parts and equipments for automobiles.Investment said to be around 20 million dollars. Employment upto 500 local people.

 

Other areas

Havells, the Indian lighting and fixtures firm has acquired the assets and business of Sylavania of US in Latin America worth 200 million dollars. They have plants in Brasil, Colombia and Costa Rica. The chief of operations of the Americas Mr Kapil Gulati manages the regional business from Costa Rica.

Godrej has acquired two Argentine companies, Issue Group and Argencos, in 2010. The two companies are in cosmetics business with core strength in hair colour. They have a turnover of 50 million dollars and export their products to other Latin American countries.

Videocon has acquired a TV manufacturing plant (owned by Thomson) in Mexico for about half a billion dollars.

BEML has established an assembly plant in Espirito de Santo province of Brasil for mining, earthmoving and railway equipments.

Essel Propack has acquired plants in Colombia and Mexico which produce laminated plastic tubes. Essel Propack inagurated its second plant in Mexico -30 March 2011

JK Tyres acquired Mexican Tyre company Tornel in April 2008 for 68 million dollars. Tornel has three tyre plants employing 2000 people and producing 6.6 million tyres. It has a turnover of over 200 million dollars.

Pidilite has acquired a Brazilian adhesive manufacturing company which has a turnover of 50 million dollars and employs 320 Brazilians.

Vijay Electricals from Hyderabad has acquired a Transformers plant in Joao Pessoa in the northeast of Brazil. They are setting up another plant in Mexico.

Elgi Equipments has launched a subsidiary at Sao Paolo in Brazil to market its products and later manufacturing.

DS Constructions Ltd. has acquired Globeleq America's power assets for $542 million, in 50:50 joint venture with Israel Corporation. The assets consists of natural gas and hydro power plants in Peru and Bolivia, fuel based power assets in El Salvador, Dominican Republic, Guatemala, Nicaragua, Panama and Jamaica totaling a capacity of over 2,180 mw.

Elevation Development a singapore-based company of NRI Satinder Garcha has bought the City Hotel in downtown Santiago facing the Plaza de las Armas in January 2011. The hotel is being renovated and should be inagurated by end 2012.

Megatherm has set up a Brazilian Subsidiary, Megatherm Group Brasil Ltda, in foundry sector.

Praj industries of Pune has executed ethanol projects worth 35 million dollars in Colombia. They have entered into a JV with a Brazilian company to build a new ethanol plant in Brazil.

KEC International Ltd has acquired ( sept 2010) SAE Tower Holdings of USA which has manufacturing facilities in Belo Horizonte, Brazil ( 65000 tons) and Monterry, Mexico ( 35,000 tons) as well as in USA. Cost of acquisition was 95 million dollars. SAE Towers is a leader in all three markets.

Wipro’s Infrastructure Engineering division has acquired ( may 2011) a Brazilian hydraulic cylinder manufacturer, RKM Equipamentos Hidraulicos.

Tata Beverages is exploring investment in a tea factory in Missiones province of Argentina

Kirloskar is planning to acquire a water pump manufacturing plant in Argentina.

 

Suggested focus areas for Indian investors and exporters

• Indian companies should target Brazil for projects and supply of materials for the 200 billion dollars infrastructure projects for the World Cup 2014 and the Olympics 2016. They should also focus on the opportunities in the five year plan to spend 220 billion dollars by Petrobras (This is the largest corporate investment plan in the world at this moment) in the petroleum exploration and production.
• The Minister of Mines and Energy of Brazil announced on 8 february 2011 that Brazil would invest 270 billion dollars in the next two decades in the mining sector and triple the production of gold, iron and copper by 2030. This offers opportunities for investment as well as exports of mining machinery and materials.
• Investment in commercial forestry and paper pulp in Argentina, Brazil, Uruguay and Chile and take back timber and paper pulp.
• Indian companies should acquire farmland in the region to grow soy, sunflower, pulses and sugarcane to source edible oil, pulses, sugar and biofuels.
• The Colombian Minister of Energy and Mining announced on 15 August 2010 that he expected investment of 28 billion dollars in oil exploration and production in the next four years and increse the oil production to 1.4 million bpd by 2014 from 963,000 bpd in June 2010. Colombia is emerging as South America's third-largest oil producer behind Brazil and Venezuela. This opens up opportunities for Indian investors and exporters.
• Mining investment in Peru amounted to US$4.02 billion in 2010 and this is expected to increase in the coming years. Analysts predict that in 2011 and 2012 alone, at least USD29 billion of mining investment will go into Peru and Colombia.
• Argentina, Brazil, Uruguay and Paraguay are expanding the area of agriculture and increasing their output, encouraged by the high prices and demand as well as by the longterm concern of global food and energy security. This is good news for Indian exporters of agrochemicals and equipments and machinery such as tractors.

 

Entertainment Business

Toonz Animation Ltd of Trivandrum in collaboration with Illusion Studios of Buenos Aires coproduced a cartoon film ¨Gaturro¨ costing five million dollars. It is based on a cartoon character created by Argentine Cartoonist Nik. The film released in September 2010 was a box-office hit

An Argentine director Pablo Cesar made a feature film ¨Unicorn-the garden of fruits¨ in 1996 as a coproduction with India. He is now looking for an Indian coproducer for a new film ¨Thinking of Him¨ based on the romantic story of meeting of Tagore with Victoria O´campo in Buenos Aires.
A Bollywood film Dhoom II was shot in Rio de Janeiro and a Rajnikant film in Machu Pichu in Peru.

The Argentine musician, Gustavo Santaolalla composed music for the Amir Khan film ¨Dhobi Ghat¨ directed by Kiran Rao. This was released in January 2011. 
Endemol India shot a TV serial ´Jor Ka Jhatka´ in Buenos Aires in December 2010 – January 2011 with 28 Indian actors who stayed here for 40 days. This show was hosted by Shahrukh Khan in Imagine channel in February 2011.

Globo TV of Brazil produced and telecast a soap opera ¨Camino das Indias – Passage to India¨ in 2009. It was partly shot in India and there were Indian characters and Indian costumes. It got the highest ratings during the eight months of its telecast and stimulated Brazilian interest in India. It has been dubbed in Spanish and telecast in other Latin American countries.

Mexican actress Barbara Mori acted as heroine in the Bollywood film ¨Kites¨ released in 2010. A Brazilian actress Giselle Monteiro has also acted in a Bollywood film (Love aaj kal) in a supporting role.
“Management TV” group (HSM) of Argentina is in talks with India Today group for joint ventures in India in TV, publications and digital courses in Management education.
Indian TV channels have shown Latin American soap operas such as Ugly Betty and Second Chance.

 

Latin American investment and ventures in India

Brazilian companies

Marcopolo has a joint venture with Tata Motors for production of buses in India. Production capacity is 14,000 vehicles per year with initial investment of 30 million dollars.

CVRD has set up an office in India and is looking for investment opportunities

Sunley Fashion has a joint venture in Chennai for production and exports of shoes.

Weg has a subsidiary in Bangalore marketing their electrical motors and generators.

Stefanini has set up IT development centres in Bangalore and Hyderabad.

Gerdau has invested US$ 121 million in joint venture with Kalyani Steel in India.

Dedini has entered into an MOU with Walchand Group for supply of equipments for ethanol production in India.

COFAP has set up a 50:50 JV in India with the Endurance Group for shock absorbers.

Perto, a Porto Alegre based company making ATM machines is setting up facilities in India. They have already sold 825 ATMS to the State Bank of India.

 

Argentine companies

IMPSA has an office in Guragaon seeking opportunities in hydroelectric power sector. They outsource engineering designs to Indian companies.

Biosidus has shown interest in establishing a plant in India to produce biotech products.

Galileo, a global leader in CNG technologies has supplied technology and equipment to Indian companies and is looking for opportunities to work with gas companies like Reliance.

 

Mexican companies

Cineopolis is investing 160 million dollars in setting up multiplexes in various cities in  India. The company started operations in India in 2009 and is planning to operate 500 screens in 40 cities in the next five years in cities like Jaipur, Pune, Thane, Amritsar, Bangalore, Thane, Patna, Bhopal, Surat and Ahmedabad.

Homex is in a joint venture with Daksh Builders to construct low-cost houses in India.

 

Colombia

FANALCA  has got a contract for collection and processing of solid waste in one third of the city of Chennai employing 2600 Indian workers.

 

Peru

Aje Group has established a plant in Patalaganga in Maharashtra for production of cola drinks and mineral water ( 40,000 bottles per hour) since December 2010.

 

Guatemala

Pollo Campero has establised franchises in India.

Cuba

Biocon has a joint venture with Cuba for manufacture of vaccines in India with Cuban technology.

 

FocusLAC programme

This is a special trade promotion initiative of the commerce ministry of India implemented in collaboration with business, since 1997. Under this, there are a number of proactive measures, including financial support for Indian companies to explore the LAC market, for participation in trade fairs, market studies, BSMs etc. Financial support is also given for LAC importers to visit India. The support is provided through export promotion councils and trade and industry bodies only and not directly to individual companies

• for more http://commerce.nic.in/flac/flac.htm

 

PTA with mercosur

This was concluded in march 2005. Preferential duty ( 10-20 percent in most cases) is given to 452 Indian products entering mercosur and reciprocal concession to 450 products of mercosur entering India. The PTA has become effective from June 2009.

Duty discount for 452 Indian exports as follows:

10 % : 394 products
20 % : 45   products
100%: 13 products

Duty discount on 450 Mercosur exports:

10 % : 93 products
20 % : 336 products
100 % : 21 products

India´s export items which get Mercosur preferential duty

Mercosur´s export items entitled to preferential tariff of India

 

Expansion of India- Mercosur PTA

The India - Mercosur PTA which has become operational since June 2009, covers 450 itmes of our exports and 450 items of Mercosur exports. It has now been decided to expand the lists.
The lists were discussed in the India- Mercosur meeting held in New Delhi on 15 June 2010.
Mercosur has already given their wish list of 1600 items and the Indian commerce ministry has given its list of 3200 items.These will be finalised in the next meeting to be held.

Indian exporters, export promotion councils and trade and industry bodies can present their cases to the Indian commerce ministry..mentioning the item with the HS code and percentage of preference you desire.
Contacts in commerce Ministry

Shubha Sarma DS shubha.s@nic.in

 

 

PTA with Chile

A preferential trade agreement with chile was concluded in November 2005 and was signed on 8 March 2006. India has agreed to give preferential duties to 276 chilean export items while chile will reciprocate for 296 Indian items. It has been agreed to move towards a FTA later.

• Chilean products that get preferential duty in India
• Preferential tariffs given by Chile to India´s exports

 

 

Lines of Credit

Government Lines of credit

• The Government of India has started giving lines of credit (LOC) to other developing countries including LAC countries at concessional terms since 2003. These are being operated by Eximbank of India

• In June 2005, Government of India granted a 30 million$ Line of Credit to Government of Honduras. A Honduran delegation visited India in June 2007 and finalised utilisation of 9 million$ for communication equipments, 15 million for vehicles,3 million for airforce and 2.4 million for medical equipments.

• In May 2009 India offered 80 million dollars LOC to central america during the visit of SICA foreign ministers´visit to Delhi.

• In 2006 India offered 30 million dollar LOC to Bolivia.

• In 2010, Cuba was given a 5 million$ LOC

• Nicaragua had received a Rupee credit of 12 crores in 1986.

 

Eximbank Lines of credit

Eximbank has given commercial lines of credit to governments, commercialbanks and regional organisations in LAC region.

Eximbank of India has given Facility of US$ 50 million to the overseas SPV to be set up in Brazil of the Indian company Strides Arcolab Limited, Bangalore for part financing acquisition of Penem/ Penicillin manufacturing facility of Cellofarm at Campos in Brazil under Bank’s Overseas Investment Finance Programme.

Facility of US$ 24 million to Vale do Ivai Acucar e Alcool S.A (VDI), Brazil, a step-down overseas subsidiary of Shree Renuka Sugars Limited (SRSL), Mumbai towards part financing VDI’s normal capex requirement and partly towards refinancing existing debt of VDI, under Exim Bank’s Overseas Investment Finance Programme.

For Mahindra & Mahindra’s partners in Brazil, they are in the process of examining the possibilty of a loan facility.

 

Corporation Andina de Fomento (CAF)	Bolivia , Colombia , Ecuador , Peru and Venezuela	USD 10 mn	CAF is processing a few proposals and is expected to refer the same to Exim Bank, upon their approval.
Central American Bank for Economic Integration (BCIE)	Bolivia , Colombia , Ecuador , Peru and Venezuela	USD 10 mn	BCIE is expected to refer proposals to Exim Bank.
Banco Nacional de Comercio Exterior S.N.C. (Bancomext)	Mexico	USD 10 mn	Bancomext is expected to refer a few proposals to Exim Bank, to be covered under the above facility.
Banco de Comercio Exterior de Colombia (Bancoldex)	Colombia	USD 10 mn	Bancoldex is yet to refer any transaction to EXIM Bank, to be covered under the LOC facility.
Banco Bradesco S.A.	Brazil	USD 10 mn	One contract for USD 80,000.00 has been approved. More contracts are expected to be covered under the LOC.
Republic Bank	Trinidad & Tobago	USD 8 mn	The LOC Agreement has recently been made effective on May 14, 2004 and the LOC is expected to be utilized soon.
UNIBANCO	Brazil	USD 10 mn	The LOC Agreement has just been signed and it will be made effective upon compliance with conditions precedent, by UNIBANCO, as per the LOC Agreement. A contract for cement plant for USD 4.5 mn is expected to be approved shortly, once the LOC is made effective.

Note Most of the above LOCs remain unutilised due to different reasons in different countries. Indian Exporters and LAC importers are welcome to utilise them. Eximbank would be willing to consider more LOCs for LAC countries.

contact: www.eximbankindia.com

 

Development partnership

Government of India gives:

- about 350 ITEC ( Indian technical and economic cooperation) training scholarships to LAC countries every year

- project assistance eg. 6 million dollars grant for a cricket stadium in Guyana, 1.6 million dollars grant for the computerisation of Caricom secretriat.

- gifted 150 Bajaj three wheelers to Central American countries

- deputation of experts and advisors to the governments of LAC countries

- emergency and disaster relief assistance in the form of medicines and other supplies from time to time given to a number of countries.

- has set up IT training centres in Cuba, Panama and Guatemala and plans to set up in other central american and caribbean countries and also in paraguay and uruguay..

 

DTAA