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4th
CII India-Latin America andCaribbean (LAC) Conclave:
Enhancing Business Partnerships
29-30 April 2010 : New Delhi
Government of India
Report
Since 1895
4th
CII India-Latin America andCaribbean (LAC) Conclave:
Enhancing Business Partnerships
29-30 April 2010 : New Delhi
4th
CII India-Latin America andCaribbean (LAC) Conclave:
Enhancing Business Partnerships
29-30 April 2010 : New Delhi
Contents
th4 CII India-Latin America and Caribbean (LAC) Conclave
Executive Summary 1
Conclave Recommendations 5
Conference Proceedings 7
Illustration
Figure 1 : Country-wise share of Indian exports in LAC 9
Figure 2 : Business prospects in Colombia 11
Figure 3 : Colombian Business Environment 11
Figure 4 : Perspectives on Colombian Economic Growth 12
Figure 5 : Region-wise share of India’s exports 13
Figure 6 : Sixteen (16) Operative Exam Bank of India, Line of Credit 15amounting to $173.65 million in LAC region
Figure 7 : Projects supported in LAC region by EXIM Bank of India 15
Figure 8 : India, a net food importer 21
Figure 9 : Indian Investment & Joint Ventures in LAC 22
Figure 10 : Chilean Mining in the World 24
Figure 11 : Chile in the World 25
Figure 12 : Logistic and Transportation 28
Figure 13 : Logistic and Transportation: Challenge 28
Figure 14 : India- LAC shipping routes 29
Figure 15 : Infrastructures in Latin America 30
Figure 16 : The Port of Cutuco, El Salvador: Building South-South Trade 31
Figure 17 : Exports (as percentage) of Indian IT-BPO market 32
Figure 18 : India and LAC - Partnership 34
Figure 19 : India-Brazil bilateral trade and investment flows 35(2002 vs 2008)
Figure 20 : ITO-BPO Competitiveness 35
Figure 21 : India-LAC: Significant Buoyancy in Bilateral Trade Relations 42
Contents
th4 CII India-Latin America and Caribbean (LAC) Conclave
Executive Summary 1
Conclave Recommendations 5
Conference Proceedings 7
Illustration
Figure 1 : Country-wise share of Indian exports in LAC 9
Figure 2 : Business prospects in Colombia 11
Figure 3 : Colombian Business Environment 11
Figure 4 : Perspectives on Colombian Economic Growth 12
Figure 5 : Region-wise share of India’s exports 13
Figure 6 : Sixteen (16) Operative Exam Bank of India, Line of Credit 15amounting to $173.65 million in LAC region
Figure 7 : Projects supported in LAC region by EXIM Bank of India 15
Figure 8 : India, a net food importer 21
Figure 9 : Indian Investment & Joint Ventures in LAC 22
Figure 10 : Chilean Mining in the World 24
Figure 11 : Chile in the World 25
Figure 12 : Logistic and Transportation 28
Figure 13 : Logistic and Transportation: Challenge 28
Figure 14 : India- LAC shipping routes 29
Figure 15 : Infrastructures in Latin America 30
Figure 16 : The Port of Cutuco, El Salvador: Building South-South Trade 31
Figure 17 : Exports (as percentage) of Indian IT-BPO market 32
Figure 18 : India and LAC - Partnership 34
Figure 19 : India-Brazil bilateral trade and investment flows 35(2002 vs 2008)
Figure 20 : ITO-BPO Competitiveness 35
Figure 21 : India-LAC: Significant Buoyancy in Bilateral Trade Relations 42
1
Executive Summary
The tyranny of geographical distance that limited India-LAC bilateral trade and
investment flows over the years is being reigned in as businesses on both sides
show greater intent to enter into collaborative arrangements for diverse reasons
like infrastructure development, market access, transfer of technology,
outsourcing, capacity building and skills development. This is writ large in the
bilateral trade and investment patterns. As a case in point, India-LAC bilateral
trade flows have increased four-fold in the last five years, from $4.2 billion in
2004-05 to $16.1 billion in 2008-09. But, this is apparently the tip of the iceberg.
The 4th India-Latin America and Caribbean Conclave, organised by CII in
partnership with the Ministry of Commerce and Industry, Ministry of External
Affairs, and EXIM bank of India in New Delhi during 29-30 April 2010, turned the
spotlight on the key issues that underlie the bilateral business engagements.
Over 200 participants representing the Indian and LAC ministries and
government departments, business groups, financial institutions and social
organisations engaged in the interactive discussions covering sectors such as
Agriculture and Food Processing, Infrastructure, Engineering, Project
Management, Logistics and Transportation, IT & ITeS, Pharma, Healthcare and
Medical Equipment.
Regional economic groupings in the LAC region have played a positive role in
promoting the overall economic well-being of the region. From the Indian
viewpoint, any deep engagement with a sub-regional group will provide a larger
market access for key product and services. Mechanisms for financing business
partnerships were also discussed in depth.
The B2B sessions witnessed over 350 business meetings and were an integral
part of the programme where 90 plus projects worth over US$10 billion were
discussed. Proposals for M&As with a total estimated value of $283 million were
discussed. These discussions covered sectors, apart from those listed above,
such as, Sugar, Ethanol, Textiles, Cosmetics and Beauty Products, Herbal
Products, Consumer Durables and Kitchenware, Auto Components Chemicals,
Construction, Rail Road System, Steel Bridges, Waste Water Treatment, Hospital
Infrastructure, Industrial Consultancy, Free Zones, Mining and Mining
Exec
utiv
e Su
mm
ary
th4 CII India-Latin America and Caribbean (LAC) Conclave
1
Executive Summary
The tyranny of geographical distance that limited India-LAC bilateral trade and
investment flows over the years is being reigned in as businesses on both sides
show greater intent to enter into collaborative arrangements for diverse reasons
like infrastructure development, market access, transfer of technology,
outsourcing, capacity building and skills development. This is writ large in the
bilateral trade and investment patterns. As a case in point, India-LAC bilateral
trade flows have increased four-fold in the last five years, from $4.2 billion in
2004-05 to $16.1 billion in 2008-09. But, this is apparently the tip of the iceberg.
The 4th India-Latin America and Caribbean Conclave, organised by CII in
partnership with the Ministry of Commerce and Industry, Ministry of External
Affairs, and EXIM bank of India in New Delhi during 29-30 April 2010, turned the
spotlight on the key issues that underlie the bilateral business engagements.
Over 200 participants representing the Indian and LAC ministries and
government departments, business groups, financial institutions and social
organisations engaged in the interactive discussions covering sectors such as
Agriculture and Food Processing, Infrastructure, Engineering, Project
Management, Logistics and Transportation, IT & ITeS, Pharma, Healthcare and
Medical Equipment.
Regional economic groupings in the LAC region have played a positive role in
promoting the overall economic well-being of the region. From the Indian
viewpoint, any deep engagement with a sub-regional group will provide a larger
market access for key product and services. Mechanisms for financing business
partnerships were also discussed in depth.
The B2B sessions witnessed over 350 business meetings and were an integral
part of the programme where 90 plus projects worth over US$10 billion were
discussed. Proposals for M&As with a total estimated value of $283 million were
discussed. These discussions covered sectors, apart from those listed above,
such as, Sugar, Ethanol, Textiles, Cosmetics and Beauty Products, Herbal
Products, Consumer Durables and Kitchenware, Auto Components Chemicals,
Construction, Rail Road System, Steel Bridges, Waste Water Treatment, Hospital
Infrastructure, Industrial Consultancy, Free Zones, Mining and Mining
Exec
utiv
e Su
mm
ary
th4 CII India-Latin America and Caribbean (LAC) Conclave
Exec
utiv
e Su
mm
ary
2
th4 CII India-Latin America and Caribbean (LAC) Conclave
Equipment, Oil and Gas, Steel, Coking coal, Biotechnology, Tourism & Services,
Energy, Electric Equipment, Wood and Furniture, etc.
14 LAC countries were represented - Argentina, Brazil, Chile, Colombia, Costa
Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Mexico, Paraguay, Peru,
Uruguay, Venezuela.
Discussions covering a swathe of business sectors touched upon the policy
environment in both regions and the latent potentials for collaborative
businesses. At the end of the Conclave, a set of recommendations were put
forth for follow-up action.
Mr Jyotiraditya Scindia, Minister of State for Commerce & Industry, Government
of India, set the tone for the Conclave during his inaugural address, when he said
that Indian technology and Latin American natural and social capital make a great
fit. The minister also talked about the compelling opportunities for India to
enhance its external trade through geographical and product diversification, with
particular focus on the LAC markets. He cited energy cooperation and agriculture
outsourcing as other key areas for bilateral cooperation. Mr Scindia also spoke
about the role of tourism in bringing our cultures together. Bilateral and
multilateral discussions with respect to double taxation agreements and free
trade agreements were part of the focus during the inaugural.
The session on ‘Leveraging Regional Engagement to Strengthen Business
Partnership’ underlined the fact that regional economic groupings in the LAC
region have played a positive role in promoting the overall economic well-being
of the region. India has maintained close ties with the major groupings such as
Mercosur. The panel observed that from the Indian viewpoint, any deep
engagement with a sub-regional group will provide a larger market access for
key product and services. Countries like Uruguay in South America and El
Salvador in Central America were cited as hubs for transit trade and entry into the
LAC markets.
The session on ‘Sectoral Synergies in Agriculture & Food Processing’ reiterated
the view that LAC countries like Argentina, could offer outsourced agriculture
solutions to India, which is no longer a food surplus country. It was said that with
50% of India’s population being under 25 years, the size of the future Indian
market for a whole class of agricultural products would be very large. India is
already a net importer of edible oils and pulses. The situation can be addressed
through agriculture outsourcing and sharing of knowledge and practices in
agricultural value change, the panel said.
Likewise, the session on ‘Sectoral Synergies in Infrastructure, Engineering and
Project Management’ focused attention on technology and knowledge sharing
in areas that are critical to the growth of Indian and LAC economies. Regarding
project funding, it was said that LAC should not only find funding opportunities
locally and from international funding organisations but also explore the LoCs
offered by Exim Bank of India. At the same time, Indian companies were invited
to explore project opportunities in LAC region in Railways, MRTS, coal, mining,
alternative energy and oil exploration.
The session on ‘Transportation and Logistics: Bringing India and LAC Close’
addressed the issue of lack of adequate sealinks between the two regions. It
was said that policy intervention from both Indian and LAC governments were
required to build better logistics and transport links between the two regions.
The panel also discussed alternative sea routes between India and the Atlantic
and Pacific coasts of the LAC region.
The session on ‘Sectoral Synergies in IT and ITeS’ underlined India’s leadership
position in the IT-BPO space and how it could contribute in good measure to
LAC’s IT / ITeS sectors. LAC countries could replicate India’s successes in this
sector. It was said that India continues to take the centre-stage in the IT/ITeS
sector with 51% share of the total sourcing market. The industry accounts for
25% of India’s exports and 10.5% of services revenues. Also, the global sourcing
industry in India is likely to reach $175 billion, while the domestic outsourcing
industry is expected to reach $50 billion by 2020. In terms of bilateral
cooperation, it was said that Indian companies could customise the end
products and services as per needs of LAC customers. The panel called for
renewed focus on technical education and skills development and observed that
Indian and LAC IT / ITeS sectors need to create, maintain and share information
databases.
The session on ‘Sectoral Synergies in Pharma, Healthcare & Medical
Equipment’, among various areas of cooperation, drew attention to India
emerging as a hub for clinical trials. The panel said that LAC could be drawn into
the life sciences research fold where India has a good track record. It also
recommended the establishment of large-scale inter-continental multi-centres
for clinical trials. It was stated that LAC could import from India the bulk of its
APIs, which serve as raw materials for drugs and pharmaceuticals.
The session on ‘Catalyzing Project Partnerships through Financial Mechanisms’
underlined the buoyancy in India-LAC bilateral trade flows. Indian investments
and joint ventures in the LAC region are mainly in the steel, pharmaceuticals,
chemicals, engineering, IT software, petroleum, mining and biotechnology
sectors. At present, 16 Exim Bank of India Line of Credits (LoCs) amounting to
$173.65 million are operative in the LAC region. The panel called for cooperation
between EXIM Bank of India and BNDES to facilitate access to trade finance for
local firms in India, Brazil and the rest of the LAC region. to facilitate access to
information via local banking institutions, and the creation of an event that would
connect and begin the exchange of ideas between players in Indian and Brazilian
Private Equity markets and investment banking communities.
3
th4 CII India-Latin America and Caribbean (LAC) Conclave
Exec
utiv
e Su
mm
ary
Exec
utiv
e Su
mm
ary
2
th4 CII India-Latin America and Caribbean (LAC) Conclave
Equipment, Oil and Gas, Steel, Coking coal, Biotechnology, Tourism & Services,
Energy, Electric Equipment, Wood and Furniture, etc.
14 LAC countries were represented - Argentina, Brazil, Chile, Colombia, Costa
Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Mexico, Paraguay, Peru,
Uruguay, Venezuela.
Discussions covering a swathe of business sectors touched upon the policy
environment in both regions and the latent potentials for collaborative
businesses. At the end of the Conclave, a set of recommendations were put
forth for follow-up action.
Mr Jyotiraditya Scindia, Minister of State for Commerce & Industry, Government
of India, set the tone for the Conclave during his inaugural address, when he said
that Indian technology and Latin American natural and social capital make a great
fit. The minister also talked about the compelling opportunities for India to
enhance its external trade through geographical and product diversification, with
particular focus on the LAC markets. He cited energy cooperation and agriculture
outsourcing as other key areas for bilateral cooperation. Mr Scindia also spoke
about the role of tourism in bringing our cultures together. Bilateral and
multilateral discussions with respect to double taxation agreements and free
trade agreements were part of the focus during the inaugural.
The session on ‘Leveraging Regional Engagement to Strengthen Business
Partnership’ underlined the fact that regional economic groupings in the LAC
region have played a positive role in promoting the overall economic well-being
of the region. India has maintained close ties with the major groupings such as
Mercosur. The panel observed that from the Indian viewpoint, any deep
engagement with a sub-regional group will provide a larger market access for
key product and services. Countries like Uruguay in South America and El
Salvador in Central America were cited as hubs for transit trade and entry into the
LAC markets.
The session on ‘Sectoral Synergies in Agriculture & Food Processing’ reiterated
the view that LAC countries like Argentina, could offer outsourced agriculture
solutions to India, which is no longer a food surplus country. It was said that with
50% of India’s population being under 25 years, the size of the future Indian
market for a whole class of agricultural products would be very large. India is
already a net importer of edible oils and pulses. The situation can be addressed
through agriculture outsourcing and sharing of knowledge and practices in
agricultural value change, the panel said.
Likewise, the session on ‘Sectoral Synergies in Infrastructure, Engineering and
Project Management’ focused attention on technology and knowledge sharing
in areas that are critical to the growth of Indian and LAC economies. Regarding
project funding, it was said that LAC should not only find funding opportunities
locally and from international funding organisations but also explore the LoCs
offered by Exim Bank of India. At the same time, Indian companies were invited
to explore project opportunities in LAC region in Railways, MRTS, coal, mining,
alternative energy and oil exploration.
The session on ‘Transportation and Logistics: Bringing India and LAC Close’
addressed the issue of lack of adequate sealinks between the two regions. It
was said that policy intervention from both Indian and LAC governments were
required to build better logistics and transport links between the two regions.
The panel also discussed alternative sea routes between India and the Atlantic
and Pacific coasts of the LAC region.
The session on ‘Sectoral Synergies in IT and ITeS’ underlined India’s leadership
position in the IT-BPO space and how it could contribute in good measure to
LAC’s IT / ITeS sectors. LAC countries could replicate India’s successes in this
sector. It was said that India continues to take the centre-stage in the IT/ITeS
sector with 51% share of the total sourcing market. The industry accounts for
25% of India’s exports and 10.5% of services revenues. Also, the global sourcing
industry in India is likely to reach $175 billion, while the domestic outsourcing
industry is expected to reach $50 billion by 2020. In terms of bilateral
cooperation, it was said that Indian companies could customise the end
products and services as per needs of LAC customers. The panel called for
renewed focus on technical education and skills development and observed that
Indian and LAC IT / ITeS sectors need to create, maintain and share information
databases.
The session on ‘Sectoral Synergies in Pharma, Healthcare & Medical
Equipment’, among various areas of cooperation, drew attention to India
emerging as a hub for clinical trials. The panel said that LAC could be drawn into
the life sciences research fold where India has a good track record. It also
recommended the establishment of large-scale inter-continental multi-centres
for clinical trials. It was stated that LAC could import from India the bulk of its
APIs, which serve as raw materials for drugs and pharmaceuticals.
The session on ‘Catalyzing Project Partnerships through Financial Mechanisms’
underlined the buoyancy in India-LAC bilateral trade flows. Indian investments
and joint ventures in the LAC region are mainly in the steel, pharmaceuticals,
chemicals, engineering, IT software, petroleum, mining and biotechnology
sectors. At present, 16 Exim Bank of India Line of Credits (LoCs) amounting to
$173.65 million are operative in the LAC region. The panel called for cooperation
between EXIM Bank of India and BNDES to facilitate access to trade finance for
local firms in India, Brazil and the rest of the LAC region. to facilitate access to
information via local banking institutions, and the creation of an event that would
connect and begin the exchange of ideas between players in Indian and Brazilian
Private Equity markets and investment banking communities.
3
th4 CII India-Latin America and Caribbean (LAC) Conclave
Exec
utiv
e Su
mm
ary
Exec
utiv
e Su
mm
ary
4
H.E, Mr Mauricio Macri, Head of Government of Buenos Aires, Argentina, during
his address at the Valedictory Session, invited Indian companies to invest in a
‘mini- Bangalore’ in Buenos Aires. He underlined the growing opportunities for
agriculture outsourcing and drew the attention of the audience to the likely
benefits for both regions.
The Conclave concluded with Mr Praful Talera, Member, CII LAC Committee and
Executive Director, Dynamic Logistics, presenting the Conclave
recommendations. Mr Shubhendu Amitabh, Co-Chairman, CII LAC Committee
and Senior President, The Aditya Birla Group, announced that the 5th CII India-
LAC Conclave would be held on February 24-25, 2011 at New Delhi.
th4 CII India-Latin America and Caribbean (LAC) Conclave
5
Conclave Recommendations
External Trade
Agriculture
Transport & Logistics
Tourism
ØGeographical and product diversification: India should diversify the
items of exports to LAC countries and increase the volume of exports to
all target markets in the region. Currently, Brazil alone accounts for 44%
of Indian exports to LAC. At a broader level, the expectation is that India-
LAC bilateral trade should match India’s bilateral trade with other key
regions such as North America, EU, Africa and Asia.
ØOutsourcing food needs: Even as India faces increasing land and water
shortages that affects domestic food production, LAC countries like
Argentina, Brazil, Peru and others have invited India to consider
outsourcing its food needs by investing in the LAC farm sector. At the
same time, the Indian market is expected to open up to certain exotic
and high nutritional farm products that are unique to countries like Peru.
Indian investments in LAC farm sector could take the shape of JVs, and
benefit from the fact that LAC has a low population base, strong
technology wherewithal, and plenty of land and water resources.
ØPromote ‘Go East’ shipping route: This will establish close links
between India and the Pacific coast of LAC region. Shipping routes
between India and LAC are currently long-winding resulting in high cost
of transaction.
ØLeverage transit trade facilities in El Salvador & Uruguay: Both
countries offer world-class transit trade facilities that Indian exporters
could avail of to access the wider LAC markets.
ØTo strengthen economic and cultural linkages: The volume of annual
Indian outbound tourists has crossed the 50-million mark. Indians are
traveling in greater numbers overseas, both for business and leisure.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Exec
utiv
e Su
mm
ary
4
H.E, Mr Mauricio Macri, Head of Government of Buenos Aires, Argentina, during
his address at the Valedictory Session, invited Indian companies to invest in a
‘mini- Bangalore’ in Buenos Aires. He underlined the growing opportunities for
agriculture outsourcing and drew the attention of the audience to the likely
benefits for both regions.
The Conclave concluded with Mr Praful Talera, Member, CII LAC Committee and
Executive Director, Dynamic Logistics, presenting the Conclave
recommendations. Mr Shubhendu Amitabh, Co-Chairman, CII LAC Committee
and Senior President, The Aditya Birla Group, announced that the 5th CII India-
LAC Conclave would be held on February 24-25, 2011 at New Delhi.
th4 CII India-Latin America and Caribbean (LAC) Conclave
5
Conclave Recommendations
External Trade
Agriculture
Transport & Logistics
Tourism
ØGeographical and product diversification: India should diversify the
items of exports to LAC countries and increase the volume of exports to
all target markets in the region. Currently, Brazil alone accounts for 44%
of Indian exports to LAC. At a broader level, the expectation is that India-
LAC bilateral trade should match India’s bilateral trade with other key
regions such as North America, EU, Africa and Asia.
ØOutsourcing food needs: Even as India faces increasing land and water
shortages that affects domestic food production, LAC countries like
Argentina, Brazil, Peru and others have invited India to consider
outsourcing its food needs by investing in the LAC farm sector. At the
same time, the Indian market is expected to open up to certain exotic
and high nutritional farm products that are unique to countries like Peru.
Indian investments in LAC farm sector could take the shape of JVs, and
benefit from the fact that LAC has a low population base, strong
technology wherewithal, and plenty of land and water resources.
ØPromote ‘Go East’ shipping route: This will establish close links
between India and the Pacific coast of LAC region. Shipping routes
between India and LAC are currently long-winding resulting in high cost
of transaction.
ØLeverage transit trade facilities in El Salvador & Uruguay: Both
countries offer world-class transit trade facilities that Indian exporters
could avail of to access the wider LAC markets.
ØTo strengthen economic and cultural linkages: The volume of annual
Indian outbound tourists has crossed the 50-million mark. Indians are
traveling in greater numbers overseas, both for business and leisure.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conc
lave
Rec
omm
enda
tion
s
However, the number of Indian tourists traveling to the LAC regions is
relatively small owing to lack of direct transport connectivity and general
lack of awareness of the tourist destinations in the region. This is equally
true of LAC tourist arrivals in India. Focused tourism promotion will also
lead to greater cultural understanding.
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Financing Mechanisms
IT / ITeS
Pharma, Biotech, Medical Equipment & Healthcare
Institutional tie-ups: EXIM Bank of India and Brazilian Development
Bank (BNDES) should enter into greater cooperation to facilitate access
to trade finance for local firms in India, Brazil and Latin American region.
Information dissemination: Promote an event that would connect and
begin the exchange of ideas between players in Indian and Brazilian PE
markets and investment banking communities.
Customisation: Indian IT / ITeS firms should look to customisation of
end products & services as per needs of LAC customers. This could be
achieved by (i) investing in local operations; (ii) creating local ‘brands’ that
customers can associate with; (iii) emphasis on recruiting local talent.
Streamlining of HR issues: This would call for (i) seamless processing
of business visa and work permits;(ii) reduction in rigid labour laws that
lead to increase on cost of employee; (iii) resourcing – finding right
people in new territory; (iv) managing training & development costs.
Investment in technical education & skills.
Information sharing & market intelligence.
Export of APIs: Indian active pharma ingredients (API) manufacturers
can tap into the LAC pharma markets to supply raw materials.
LAC Government procurements: Indian medical devices and pharma
companies could set up local manufacturing operations to leverage the
large procurement programmes in countries like Mexico and Cuba.
Clinical trials: Pharma companies could collaborate for inter-continental,
mutli-centre clinical trials.
Traditional practices: Promote Indian herbal remedies in LAC countries.
Medical tourism: Leverage the complementarities in medical tourism.
6
th4 CII India-Latin America and Caribbean (LAC) Conclave
7
Conference Proceedings
Session Chair Mr Shubhendu Amitabh, Co-Chairman, CII LAC
Committee and Senior President, The Aditya Birla Group
Inaugural Address Mr Jyotiraditya Scindia, Minister of State for
Commerce and Industry, Government of India
Special Address Ms Liliana Perez, Secretary General, Ministry of Foreign
Affairs, Republic of Colombia
INDIA AND LAC: A NEW GROWTH STORY
Proceedings
The global economic order in the New Millennium is largely fashioned by the
dynamism of the emerging economies. Sample this. While the advanced
economies are expected to register 0.014% GPD growth (at constant price) in
2010, the emerging economies are poised for 3.99% GDP growth (at constant
price) in the same period. Likewise, investment as percent of GDP in the
advanced economies is expected to grow at relatively slow rate of 18.01% in
2010 compared with 32.5% in the emerging economies in the same period.
Similarly, the import market for goods and services in the developing countries
show a percentage change of 0.9% compared to 0.4% in the developed
countries.
The situation demands that India should enhance its trade and investment
engagements with the developing world, which it has over the last two decades
by building its bilateral economic ties with Asian, African and Latin American and
Caribbean (LAC) countries.
India’s engagement with the LAC region has lately gained significant traction,
triggered mainly by the Government of India ‘Focus LAC’ programme, supported
by multilateral and bilateral agreements with LAC countries.
Trade diversification will form the core of India’s strategy to strengthen its
economic engagements with the LAC region, which is otherwise geographically
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conc
lave
Rec
omm
enda
tion
s
However, the number of Indian tourists traveling to the LAC regions is
relatively small owing to lack of direct transport connectivity and general
lack of awareness of the tourist destinations in the region. This is equally
true of LAC tourist arrivals in India. Focused tourism promotion will also
lead to greater cultural understanding.
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Ø
Financing Mechanisms
IT / ITeS
Pharma, Biotech, Medical Equipment & Healthcare
Institutional tie-ups: EXIM Bank of India and Brazilian Development
Bank (BNDES) should enter into greater cooperation to facilitate access
to trade finance for local firms in India, Brazil and Latin American region.
Information dissemination: Promote an event that would connect and
begin the exchange of ideas between players in Indian and Brazilian PE
markets and investment banking communities.
Customisation: Indian IT / ITeS firms should look to customisation of
end products & services as per needs of LAC customers. This could be
achieved by (i) investing in local operations; (ii) creating local ‘brands’ that
customers can associate with; (iii) emphasis on recruiting local talent.
Streamlining of HR issues: This would call for (i) seamless processing
of business visa and work permits;(ii) reduction in rigid labour laws that
lead to increase on cost of employee; (iii) resourcing – finding right
people in new territory; (iv) managing training & development costs.
Investment in technical education & skills.
Information sharing & market intelligence.
Export of APIs: Indian active pharma ingredients (API) manufacturers
can tap into the LAC pharma markets to supply raw materials.
LAC Government procurements: Indian medical devices and pharma
companies could set up local manufacturing operations to leverage the
large procurement programmes in countries like Mexico and Cuba.
Clinical trials: Pharma companies could collaborate for inter-continental,
mutli-centre clinical trials.
Traditional practices: Promote Indian herbal remedies in LAC countries.
Medical tourism: Leverage the complementarities in medical tourism.
6
th4 CII India-Latin America and Caribbean (LAC) Conclave
7
Conference Proceedings
Session Chair Mr Shubhendu Amitabh, Co-Chairman, CII LAC
Committee and Senior President, The Aditya Birla Group
Inaugural Address Mr Jyotiraditya Scindia, Minister of State for
Commerce and Industry, Government of India
Special Address Ms Liliana Perez, Secretary General, Ministry of Foreign
Affairs, Republic of Colombia
INDIA AND LAC: A NEW GROWTH STORY
Proceedings
The global economic order in the New Millennium is largely fashioned by the
dynamism of the emerging economies. Sample this. While the advanced
economies are expected to register 0.014% GPD growth (at constant price) in
2010, the emerging economies are poised for 3.99% GDP growth (at constant
price) in the same period. Likewise, investment as percent of GDP in the
advanced economies is expected to grow at relatively slow rate of 18.01% in
2010 compared with 32.5% in the emerging economies in the same period.
Similarly, the import market for goods and services in the developing countries
show a percentage change of 0.9% compared to 0.4% in the developed
countries.
The situation demands that India should enhance its trade and investment
engagements with the developing world, which it has over the last two decades
by building its bilateral economic ties with Asian, African and Latin American and
Caribbean (LAC) countries.
India’s engagement with the LAC region has lately gained significant traction,
triggered mainly by the Government of India ‘Focus LAC’ programme, supported
by multilateral and bilateral agreements with LAC countries.
Trade diversification will form the core of India’s strategy to strengthen its
economic engagements with the LAC region, which is otherwise geographically
th4 CII India-Latin America and Caribbean (LAC) Conclave
Indian technology and Latin America’s natural and social capital make a great fit. There are compelling opportunities for India to enhance its external trade through geographical and product diversification, with particular focus on the LAC markets. Tourism can play a great role in bringing our cultures together.
– Jyotiraditya ScindiaMinister of State for Commerce and Industry, India
distant from India. Alongside, due initiatives are called for to diversify the India-
LAC trade basket.
The impact of this diversification will be seen in the India-LAC trade volumes in
the years to come. As of now, India-LAC bilateral trade at $16 billion compares
poorly with India’s bilateral trade flows with the US ($39.71 billion), EU ($70
billion) and Africa ($38.9 billion).
As such, India-LAC bilateral trade flows have increase four-fold in the last five
years, from US$ 4.2 billion in 2004-05 to US$ 16.1 billion in 2008-09, but the
potentials indicate that there is much more at hand to be achieved with the active
participation of the Indian and LAC governments and industry.
As stated above, geographical diversification
will determine the extent to which India-LAC
bilateral trade will progress in the coming
years. As per 2007-08 trade data, Brazil
accounted for 44% of India’s exports to the
LAC region ($5.66%), with Colombia coming
in next with 13.4% share at 0.76 billion and
Mexico with 11.30% share at 0.59 billion.
Figure 1 illustrates the lop-sided distribution
of Indian exports to LAC region.
Mr. Shubhendu Amitabh, Co-Chairman, CII LAC Committee, and Senior President, The Aditya Birla Group, India; H E Mr. Jyotiraditya Scindia, Minister of State for Commerce and Industry, Government of India and Ms. Liliana Perez Uribe, Secretary General, Ministry of Foreign, Affairs, Republic of Colombia; at Inaugural Session – India and LAC: A New Growth Story
8
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Indian exports to other key LAC countries
like Argentina, Venezuela, Peru, Chile,
Uruguay, Trinidad & Tobago, El Salvador,
Guatemala, Paraguay, Ecuador and others
are relatively negligible at this stage.
Hence, the panel underl ined the
importance of geographical diversification
in India’s exports to LAC.
Product diversification was cited as another
thrust area for India, in its efforts to increase
its exports to the LAC region. As of date,
mineral fuels, mineral oils and products of their distillation; bituminous
substances; and mineral waxes are the top export items, followed by vehicles
other than railway or tramway; rolling stock and parts and accessories thereof,
and organic chemicals in that order.
In fact, the export product diversification should be aligned to the differentiated
needs of the LAC countries. Currently, Indian exports to the region do not
represent the strengths and capabilities of the Indian economy.
The LAC countries are just as keen to increase their exports to India. The large
Indian market size notwithstanding, the LAC countries also look upon India as a
gateway to the larger Asian markets.
At a macro-level the challenge for both regions is to create exportable surplus
and produce goods and render services at the least comparative cost so as to get
a strong foothold in the international market in the face of intense competition.
The Indian and LAC governments would also be called upon to lower the tariff
and non-tariff barriers (NTBs) to ease the bilateral trade flows, even as due efforts
are needed to improve the transport and logistics connectivity between the two
regions to allow for seamless movement of merchandise goods. Robust
logistics support will reduce the cost of
transactions and make Indian and LAC goods
more competitive in each other’s markets.
At the same time, the openness of the factor
market – labour and capital -- deserves closer
attention, wherein investing companies
should have greater freedom in choosing
between domestic and foreign assets. In
fact, the MNCs are moving their operations
with greater ease today around the world in
search of lower costs. Workers too should be
able to move seamlessly between regions.
9
The Colombian government is
holding advanced talks with
India with respect to signing a
Double Taxation Agreement
which will provide further
impetus for India-Colombia
economic relations. There is a
need fo r a f ree t r ade
agreement as well. Tourism would be a key
potential area for both countries to forge
partnerships.
– Liliana Perez
Secretary General, Ministry of Foreign Affairs, Colombia
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
5.66
2.52
0.760.59
0.3 0.29 0.25 0.14 0.14 0.1 0.07
To
tal
BR
AZ
IL
CO
LO
MB
IA
ME
XIC
OA
RG
EN
TIN
A
PE
RU
CH
ILE
VE
NE
ZU
EL
A
TR
INID
AD
HO
ND
UR
AS
GU
AT
EM
AL
A
Source : www.commerce.nic.in
Figure 1 Country-wise share of Indian exports in LAC
Indian technology and Latin America’s natural and social capital make a great fit. There are compelling opportunities for India to enhance its external trade through geographical and product diversification, with particular focus on the LAC markets. Tourism can play a great role in bringing our cultures together.
– Jyotiraditya ScindiaMinister of State for Commerce and Industry, India
distant from India. Alongside, due initiatives are called for to diversify the India-
LAC trade basket.
The impact of this diversification will be seen in the India-LAC trade volumes in
the years to come. As of now, India-LAC bilateral trade at $16 billion compares
poorly with India’s bilateral trade flows with the US ($39.71 billion), EU ($70
billion) and Africa ($38.9 billion).
As such, India-LAC bilateral trade flows have increase four-fold in the last five
years, from US$ 4.2 billion in 2004-05 to US$ 16.1 billion in 2008-09, but the
potentials indicate that there is much more at hand to be achieved with the active
participation of the Indian and LAC governments and industry.
As stated above, geographical diversification
will determine the extent to which India-LAC
bilateral trade will progress in the coming
years. As per 2007-08 trade data, Brazil
accounted for 44% of India’s exports to the
LAC region ($5.66%), with Colombia coming
in next with 13.4% share at 0.76 billion and
Mexico with 11.30% share at 0.59 billion.
Figure 1 illustrates the lop-sided distribution
of Indian exports to LAC region.
Mr. Shubhendu Amitabh, Co-Chairman, CII LAC Committee, and Senior President, The Aditya Birla Group, India; H E Mr. Jyotiraditya Scindia, Minister of State for Commerce and Industry, Government of India and Ms. Liliana Perez Uribe, Secretary General, Ministry of Foreign, Affairs, Republic of Colombia; at Inaugural Session – India and LAC: A New Growth Story
8
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Indian exports to other key LAC countries
like Argentina, Venezuela, Peru, Chile,
Uruguay, Trinidad & Tobago, El Salvador,
Guatemala, Paraguay, Ecuador and others
are relatively negligible at this stage.
Hence, the panel underl ined the
importance of geographical diversification
in India’s exports to LAC.
Product diversification was cited as another
thrust area for India, in its efforts to increase
its exports to the LAC region. As of date,
mineral fuels, mineral oils and products of their distillation; bituminous
substances; and mineral waxes are the top export items, followed by vehicles
other than railway or tramway; rolling stock and parts and accessories thereof,
and organic chemicals in that order.
In fact, the export product diversification should be aligned to the differentiated
needs of the LAC countries. Currently, Indian exports to the region do not
represent the strengths and capabilities of the Indian economy.
The LAC countries are just as keen to increase their exports to India. The large
Indian market size notwithstanding, the LAC countries also look upon India as a
gateway to the larger Asian markets.
At a macro-level the challenge for both regions is to create exportable surplus
and produce goods and render services at the least comparative cost so as to get
a strong foothold in the international market in the face of intense competition.
The Indian and LAC governments would also be called upon to lower the tariff
and non-tariff barriers (NTBs) to ease the bilateral trade flows, even as due efforts
are needed to improve the transport and logistics connectivity between the two
regions to allow for seamless movement of merchandise goods. Robust
logistics support will reduce the cost of
transactions and make Indian and LAC goods
more competitive in each other’s markets.
At the same time, the openness of the factor
market – labour and capital -- deserves closer
attention, wherein investing companies
should have greater freedom in choosing
between domestic and foreign assets. In
fact, the MNCs are moving their operations
with greater ease today around the world in
search of lower costs. Workers too should be
able to move seamlessly between regions.
9
The Colombian government is
holding advanced talks with
India with respect to signing a
Double Taxation Agreement
which will provide further
impetus for India-Colombia
economic relations. There is a
need fo r a f ree t r ade
agreement as well. Tourism would be a key
potential area for both countries to forge
partnerships.
– Liliana Perez
Secretary General, Ministry of Foreign Affairs, Colombia
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
5.66
2.52
0.760.59
0.3 0.29 0.25 0.14 0.14 0.1 0.07
To
tal
BR
AZ
IL
CO
LO
MB
IA
ME
XIC
OA
RG
EN
TIN
A
PE
RU
CH
ILE
VE
NE
ZU
EL
A
TR
INID
AD
HO
ND
UR
AS
GU
AT
EM
AL
A
Source : www.commerce.nic.in
Figure 1 Country-wise share of Indian exports in LAC
Again, openness of the capital market has
been another crucial area so far as
international trade in financial assets is
concerned. Government and industry in the
two regions would have to take cognizance
of the emerging patterns in cross-border
capital and labour movement and align the
bilateral engagements suitably.
In terms of investments, India has positioned
itself as an attractive destination for FDI in a
variety of business sectors. Also, Indian
companies are enhancing their global
footprints in the LAC region in areas like IT
software and services, pharmaceuticals and
engineering products. Also, Indian firms have
demonstrated their capabilities to raise
finance overseas for big-ticket investment
abroad. This will aid the Indian investors’
forays into the LAC region.
Within India, the Government has directed
particular attention on physical infrastructure development which has opened up
numerous opportunities for PPP projects. These will serve as investment
opportunities for large LAC infrastructure players to partner with Indian firms and
do business in India.
Sectorally, the IT/ITES sector has witnessed close cooperation between the two
regions. Several leading Indian IT companies have established software
development centres, BPOs and KPOs in the LAC region -- employing many
young Latin Americans -- as part of their efforts to provide 12 hours service from
Latin America and 12 hours from India. Many LAC countries too have
demonstrated high IT capabilities over the years. Hence, the time is ripe for the
Indian and LAC governments and industry to step up the level of IT/ITES
engagements and thereby develop a synergistic partnership to jointly address
the global markets.
Energy development is a key sub-set of India-LAC economic cooperation. In this,
biofuels promotion holds a special place. Brazil has successfully developed and
promoted bio-fuels for widespread domestic use, which India would seek to
emulate.
On the agriculture front, the Mercosur countries are poised to become global
agriculture outsourcing hubs, opening up fresh opportunities for Indian farm
companies to enter into JVs with local players in the region, or even consider
mergers and acquisitions (M&As) there.
The dynamism in the bilateral
engagements is predicated to
the changing global economic
order. Earlier, when people
talked about an emerging
global economic order, the
underlying thought was that
the power equations would
gradually flatten as the developing world aligned
itself with the architecture built by the North
countries. But, recent events have completely
belied this script. The leading lights of the
developing world including India has staked claim
for global leadership roles, both in the political and
economic spheres. The CII India-LAC Conclaves
have played a catalytic role in cementing many
significant project partnerships and joint ventures
between businesses in the two regions
– Shubhendu Amitabh
Co-Chairman, CII LAC Committee and
Senior President, The Aditya Birla Group
10
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Also, India is a big potential market for LAC agro-processed foods. Brazil in
particular is focused on tapping this opportunity although the logistic challenges
are there to be tackled.
Tourism is another area that holds much promise for bilateral cooperation. The
volume of annual Indian outbound tourists has crossed the 50-million mark.
Indians are traveling in greater numbers overseas, both for business and leisure.
However, the number of Indian tourists traveling to the LAC regions is relatively
small owing to lack of direct transport connectivity and general lack of awareness
of the tourist destinations in the region.
The LAC countries could gain a larger share of Indian outbound tourism business
with focused efforts. In this, eco-tourism would be an interesting opportunity to
be tapped. The panel cited that tourism will not only bring economic value but
also promote better cultural understanding between the two regions.
At a macro-level it was said that Indian technology and Latin American natural
and social capital would make a great fit. There is great cultural compatibility
between the two regions which makes joint ventures and M&As sustainable
business propositions.
The session also threw light on the investment opportunities in Colombia. It was
cited that Colombia, apart from its strategic geographic location, offers:
ØA stable democracy
ØA strong, stable economy
(according to the Doing Business
Report of the World Bank,
Colombia is the best business
environment in Latin America. FDI
has
ØBiodiversity (Colombia is among
the top biodiverse countries in the
World and is one of the top 10
countries in terms of primary
forests).
In the last seven years, the country has
increase its market access from 233 million
consumers in 2002 to 1.4 billion consumers
in 2010. To strengthen its external trade, the
Colombian government is negotiating 19
International Investment Agreements (IIA)
with 39 countries and 21 Double Taxation
Agreements (DTA) with 22 countries.
11
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Source : Doing Business Report 2010 – World Bank
Figure 2 Business prospects in Colombia
Doing Business Ranking Variation, 2007-2010*(Change in positions)
42Colombia
Peru
Panama
Mexico
Brazil
Paraguay
Venezuela
Ecuador
Costa Rica
Argentina
Chile
Uruguay
-60 -40 -20 0 20 40 60
9
4
-8
-8
-12
-13
-15
-16
-17
-21
-50
Country(2010)
Colombia
Chile
Mexico
Peru
Panama
Uruguay
Argentina
Costa Rica
Paraguay
Brazil
Ecuador
WorldRanking
37
49
51
56
77
114
118
121
124
129
138
Source : Doing Business Report 2010 – World Bank
Figure 3 Colombian Business Environment
Country(2010)
Colombia
Peru
Chile
Mexico
Brazil
Argentina
Panama
Venezuela
WorldRanking
5
20
41
41
73
109
109
178
Strength of Investor Protection, 2010
Colombia
Peru
Mexico
Chile
Brazil
Panama
Argentina
Venezuela
0 2 4 6 8 10
8,3
6,7
6,0
6,0
5,3
4,7
4,7
2,3
Again, openness of the capital market has
been another crucial area so far as
international trade in financial assets is
concerned. Government and industry in the
two regions would have to take cognizance
of the emerging patterns in cross-border
capital and labour movement and align the
bilateral engagements suitably.
In terms of investments, India has positioned
itself as an attractive destination for FDI in a
variety of business sectors. Also, Indian
companies are enhancing their global
footprints in the LAC region in areas like IT
software and services, pharmaceuticals and
engineering products. Also, Indian firms have
demonstrated their capabilities to raise
finance overseas for big-ticket investment
abroad. This will aid the Indian investors’
forays into the LAC region.
Within India, the Government has directed
particular attention on physical infrastructure development which has opened up
numerous opportunities for PPP projects. These will serve as investment
opportunities for large LAC infrastructure players to partner with Indian firms and
do business in India.
Sectorally, the IT/ITES sector has witnessed close cooperation between the two
regions. Several leading Indian IT companies have established software
development centres, BPOs and KPOs in the LAC region -- employing many
young Latin Americans -- as part of their efforts to provide 12 hours service from
Latin America and 12 hours from India. Many LAC countries too have
demonstrated high IT capabilities over the years. Hence, the time is ripe for the
Indian and LAC governments and industry to step up the level of IT/ITES
engagements and thereby develop a synergistic partnership to jointly address
the global markets.
Energy development is a key sub-set of India-LAC economic cooperation. In this,
biofuels promotion holds a special place. Brazil has successfully developed and
promoted bio-fuels for widespread domestic use, which India would seek to
emulate.
On the agriculture front, the Mercosur countries are poised to become global
agriculture outsourcing hubs, opening up fresh opportunities for Indian farm
companies to enter into JVs with local players in the region, or even consider
mergers and acquisitions (M&As) there.
The dynamism in the bilateral
engagements is predicated to
the changing global economic
order. Earlier, when people
talked about an emerging
global economic order, the
underlying thought was that
the power equations would
gradually flatten as the developing world aligned
itself with the architecture built by the North
countries. But, recent events have completely
belied this script. The leading lights of the
developing world including India has staked claim
for global leadership roles, both in the political and
economic spheres. The CII India-LAC Conclaves
have played a catalytic role in cementing many
significant project partnerships and joint ventures
between businesses in the two regions
– Shubhendu Amitabh
Co-Chairman, CII LAC Committee and
Senior President, The Aditya Birla Group
10
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Also, India is a big potential market for LAC agro-processed foods. Brazil in
particular is focused on tapping this opportunity although the logistic challenges
are there to be tackled.
Tourism is another area that holds much promise for bilateral cooperation. The
volume of annual Indian outbound tourists has crossed the 50-million mark.
Indians are traveling in greater numbers overseas, both for business and leisure.
However, the number of Indian tourists traveling to the LAC regions is relatively
small owing to lack of direct transport connectivity and general lack of awareness
of the tourist destinations in the region.
The LAC countries could gain a larger share of Indian outbound tourism business
with focused efforts. In this, eco-tourism would be an interesting opportunity to
be tapped. The panel cited that tourism will not only bring economic value but
also promote better cultural understanding between the two regions.
At a macro-level it was said that Indian technology and Latin American natural
and social capital would make a great fit. There is great cultural compatibility
between the two regions which makes joint ventures and M&As sustainable
business propositions.
The session also threw light on the investment opportunities in Colombia. It was
cited that Colombia, apart from its strategic geographic location, offers:
ØA stable democracy
ØA strong, stable economy
(according to the Doing Business
Report of the World Bank,
Colombia is the best business
environment in Latin America. FDI
has
ØBiodiversity (Colombia is among
the top biodiverse countries in the
World and is one of the top 10
countries in terms of primary
forests).
In the last seven years, the country has
increase its market access from 233 million
consumers in 2002 to 1.4 billion consumers
in 2010. To strengthen its external trade, the
Colombian government is negotiating 19
International Investment Agreements (IIA)
with 39 countries and 21 Double Taxation
Agreements (DTA) with 22 countries.
11
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Source : Doing Business Report 2010 – World Bank
Figure 2 Business prospects in Colombia
Doing Business Ranking Variation, 2007-2010*(Change in positions)
42Colombia
Peru
Panama
Mexico
Brazil
Paraguay
Venezuela
Ecuador
Costa Rica
Argentina
Chile
Uruguay
-60 -40 -20 0 20 40 60
9
4
-8
-8
-12
-13
-15
-16
-17
-21
-50
Country(2010)
Colombia
Chile
Mexico
Peru
Panama
Uruguay
Argentina
Costa Rica
Paraguay
Brazil
Ecuador
WorldRanking
37
49
51
56
77
114
118
121
124
129
138
Source : Doing Business Report 2010 – World Bank
Figure 3 Colombian Business Environment
Country(2010)
Colombia
Peru
Chile
Mexico
Brazil
Argentina
Panama
Venezuela
WorldRanking
5
20
41
41
73
109
109
178
Strength of Investor Protection, 2010
Colombia
Peru
Mexico
Chile
Brazil
Panama
Argentina
Venezuela
0 2 4 6 8 10
8,3
6,7
6,0
6,0
5,3
4,7
4,7
2,3
Colombia has kept its place among the world’s
Top 10 reformers for 4 years. In 2010 it was
recognised as the best business environment in
Latin America (see Figure 2).
In addition, Colombia scores high in terms of
investor protection, borne out as in Figure 3.
Colombia has built up competitiveness in the
automotive sector, textiles, fashion and design
sector, graphic design, communication, and
electric power. The Government is also looking
to promote new and emerging sectors, such as,
BPO, IT & ITES, cosmetics and personal care,
and health tourism. Sectors like biofuels,
forestry and infrastructure are also receiving
close attention.
To bring more international investors into the
country, the Government has put in place 66
approved Free Trade Zones (55 alone were
approved in 2007-09).
In its engagement with India, the Colombian
government is holding advanced talks for
signing a Double Taxation Agreement which will
provide further impetus for India-Colombia
economic relations. Tourism would be a key
potential area for both countries to forge
partnerships.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Source: DANE (National Accounts), DNP, EIU (Market Indicators & Forecasts)Note: * EIU forecast Note: Last update February 15rd, 2010By Liliana Perez Uribe, Secretary General, Ministry of Foreign, Affairs, Republic of Colombia
Figure 4 Perspectives on Colombian Economic Growth
3.1%
2.2% 2.5%
4.6% 4.7%
5.7%
6.8%7.5%
2.5%
0.3%
2.5%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010*
Colombia World
13
Figure 5 Region-wise share of India’s exports
Year 2009
Others 2.5%
CIS & Baltics1%
Year 2001
CIS & Baltics2.3%
Others 4.3%
LAC 2.2%
Source : DGCIS, MoCI
ThemeIntra-Regional Trade Agreements in LAC, such as MERCOSUR, SICA, NAFTA etc.,
present an opportunity to India to access large common markets for trade and
investment. However, a key challenge remains in terms of harmonization of policies and
procedures and the integration of supply chains among the members. How can India
deepen its engagement with these groups and leverage their strengths to enhance
business partnerships with LAC ?
Proceedings
Even as the India-LAC trade flows have appreciably grown year-on-year, it has
been cited that the achievements thus far are nowhere near the true potentials.
The bilateral trade flows have increased, as indicated in Figure 5, wherein LAC
share of India’s exports has increased from 2.2% in 2001 to 3.3% in 2009.
Overall, Indian exports are increasingly
moving in the direction of South countries,
particularly in Asia, Africa and LAC region.
So, it is expected that the India-LAC trade
will significantly increase from the current
level (FY09) of Indian exports of $6.2 billion,
and imports of $10 billion.
Session Chair Mr Roberto Paranhos do Rio Branco, President, Brazil-
India Chamber of Commerce and Partner/Director, Rede
Achat LTDA, Brazil
Panel Mr Prahalathna Iyer, General Manager, EXIM Bank of
India
H.E. Mr Hans Dannenberg Castellanos, Ambassador of
the Dominican Republic in India
H.E. Mr Ernesto Carlos Alvarez, Ambassador of
Argentina in India
Mr Jose Anders Martinez, Vice-Chairman, India-Mexico
Business, Chamber and Business Director, Atento,
Mexico
LEVERAGING REGIONAL
ENGAGEMENT TO STRENGTHEN
BUSINESS PARTNERSHIP
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Colombia has kept its place among the world’s
Top 10 reformers for 4 years. In 2010 it was
recognised as the best business environment in
Latin America (see Figure 2).
In addition, Colombia scores high in terms of
investor protection, borne out as in Figure 3.
Colombia has built up competitiveness in the
automotive sector, textiles, fashion and design
sector, graphic design, communication, and
electric power. The Government is also looking
to promote new and emerging sectors, such as,
BPO, IT & ITES, cosmetics and personal care,
and health tourism. Sectors like biofuels,
forestry and infrastructure are also receiving
close attention.
To bring more international investors into the
country, the Government has put in place 66
approved Free Trade Zones (55 alone were
approved in 2007-09).
In its engagement with India, the Colombian
government is holding advanced talks for
signing a Double Taxation Agreement which will
provide further impetus for India-Colombia
economic relations. Tourism would be a key
potential area for both countries to forge
partnerships.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Source: DANE (National Accounts), DNP, EIU (Market Indicators & Forecasts)Note: * EIU forecast Note: Last update February 15rd, 2010By Liliana Perez Uribe, Secretary General, Ministry of Foreign, Affairs, Republic of Colombia
Figure 4 Perspectives on Colombian Economic Growth
3.1%
2.2% 2.5%
4.6% 4.7%
5.7%
6.8%7.5%
2.5%
0.3%
2.5%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010*
Colombia World
13
Figure 5 Region-wise share of India’s exports
Year 2009
Others 2.5%
CIS & Baltics1%
Year 2001
CIS & Baltics2.3%
Others 4.3%
LAC 2.2%
Source : DGCIS, MoCI
ThemeIntra-Regional Trade Agreements in LAC, such as MERCOSUR, SICA, NAFTA etc.,
present an opportunity to India to access large common markets for trade and
investment. However, a key challenge remains in terms of harmonization of policies and
procedures and the integration of supply chains among the members. How can India
deepen its engagement with these groups and leverage their strengths to enhance
business partnerships with LAC ?
Proceedings
Even as the India-LAC trade flows have appreciably grown year-on-year, it has
been cited that the achievements thus far are nowhere near the true potentials.
The bilateral trade flows have increased, as indicated in Figure 5, wherein LAC
share of India’s exports has increased from 2.2% in 2001 to 3.3% in 2009.
Overall, Indian exports are increasingly
moving in the direction of South countries,
particularly in Asia, Africa and LAC region.
So, it is expected that the India-LAC trade
will significantly increase from the current
level (FY09) of Indian exports of $6.2 billion,
and imports of $10 billion.
Session Chair Mr Roberto Paranhos do Rio Branco, President, Brazil-
India Chamber of Commerce and Partner/Director, Rede
Achat LTDA, Brazil
Panel Mr Prahalathna Iyer, General Manager, EXIM Bank of
India
H.E. Mr Hans Dannenberg Castellanos, Ambassador of
the Dominican Republic in India
H.E. Mr Ernesto Carlos Alvarez, Ambassador of
Argentina in India
Mr Jose Anders Martinez, Vice-Chairman, India-Mexico
Business, Chamber and Business Director, Atento,
Mexico
LEVERAGING REGIONAL
ENGAGEMENT TO STRENGTHEN
BUSINESS PARTNERSHIP
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
14
India’s major exports items to the LAC include petroleum products, transport
equipment, organic chemicals, pharma products, and electrical machinery and
equipment. Major imports items are petroleum crude, copper & mineral ores,
vegetable oils (edible), iron & steel, electronic goods and non-electrical
machinery, and fertilizers.
The major sources of imports are from Venezuela, Mexico, Chile, Brazil,
Argentina and Peru, whereas the major export destinations are Brazil, Mexico,
Chile, Colombia, Argentina, and Trinidad & Tobago.
In terms of Indian investments in the LAC countries, the focus areas are: steel,
pharmaceuticals, chemicals, engineering products, software, petroleum, mining
and biotechnology.
As stated earlier in this report, the Government of India ‘Focus LAC’ programme
has helped in building the bilateral trade and investment ties. In line with the GoI
strategy, countries in the LAC region constitute a focus region for Exim Bank of
India. A critical component of Exim Bank’s strategy has been to promote and
support two-way trade and investment flows by creating an enabling
environment.
Exim Bank of India has played a key role in Indian companies securing key
projects in the LAC countries by extending lines of credit (LOC) and other
financing support to the host countries.
Mr. Prahalathan Iyer, General Manager, EXIM Bank, India; H.E. Ernesto Carlos Alvarez, Ambassador of Argentina in India; Mr. Roberto Paranhos do Rio Branco, President, Brazil-India Chamber of Commerce and Partner/Director, Rede Achat LTDA, Brazil; H.E. Mr. Hans Dannenberg Castellanos, Ambassador of the Dominican Republic in India, Mr. José Andres Martinez, Vice Chairman, India-Mexico Business Chamber and Business Director, Atento, Mexico in Session on Leveraging Regional Engagement to Strengthen Business Partnerships
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
The Bank has cited that the potential areas
of investments in the LAC region are:
automobiles, energy/biofuels, mining, IT,
pharmaceuticals, ICT, pharmaceuticals
/chemicals, autoparts, biotechnology,
minerals, engineering, machinery, steel and
petroleum products.
The India-LAC bilateral trade and
investment flows are supported by key
bilateral and multilateral agreements, such
as: PTA with Mercosur, IBSA initiative and
BRIC initiative.
The panel also observed that while in the
past the two biggest barriers to trade and
investment relations between LACs and
India were language and distance, the issue
of language has been largely sorted with
many LAC professionals and decision
makers becoming conversant in English.
Besides, the advancement of information
technology has provided the benefit of
translation and the Internet interface has
given the opportunity of conducting
business without stepping out of home.
The session also highlighted investment
opportunities in select LAC regions
–Buenos Aires in Argentina, Mexico and
Brazil.
It was cited that with more LAC countries
opening embassies in India, including
Dominican Republic, the prospects of
bilateral trade and investments has grown
manifold. Five years ago only 10 LAC
countries had embassies in India. However,
the last five years have seen 5 LAC
countries, including Dominican Republic,
opening their embassies in India, which is a
sign of realisation of the importance of
diplomatic ties between India and Latin
America and Caribbean.
15
Figure 7 Projects supported in LAC region by EXIM Bank of India
ØEthanol plant project (Colombia)
ØPharmaceuticals (Mexico, Caribbean)
ØTextile (Mexico, Peru, Argentina)
ØPower Transmission (Brazil)
ØBauxite Mining (Brazil, British Virgin Islands)
ØAtlantic Railway network (Colombia)
ØEl Nino Emergency Assistance Project (Guyana)
ØShipping (Cayman Islands)
Figure 6Sixteen (16) Operative Exam Bank of India, Line of Credit amounting to $173.65 million in LAC region
They include
ØUS$ 30 million to the Government of Honduras
Ø10 million to Central American Bank for Economic Integration (CABEI)
ØUS$ 10 million to Corporacion Andina de Fomento (CAF)
ØUS$ 10 million to Banco de Comercio Exterior de Colombia (Bancoldex), Colombia
ØUS$ 8 million to Republic Bank Ltd., Trinidad & Tobago
ØUS$ 21.1 million (US$ 19 mn & US$ 2.1 mn) to the Government of Guyana
ØUS$ 10 million to Banco Nacional De Comercio Exterior (Bancomext), Mexico
ØUS$ 10 million to Banco Bradesco, Brazil
ØUS$ 47.05 million (US$ 4.3 m, US$ 5.76 mn, US$ 10.59, US$ 16 mn & US$ 10.4 mn) to the Government of Suriname
ØUS$ 10 million to Unibanco, Brazil
ØUS$ 7.5 million to Government of Jamaica
H.E. Mr Hans Dannenberg Castellanos,Ambassador of the Dominican Republic in India
Last five years have seen 5 LAC
countries, including Dominican
Republic, opening their embassies in
India, which is a sign of realisation of
the importance of diplomatic ties
between India and LAC
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
14
India’s major exports items to the LAC include petroleum products, transport
equipment, organic chemicals, pharma products, and electrical machinery and
equipment. Major imports items are petroleum crude, copper & mineral ores,
vegetable oils (edible), iron & steel, electronic goods and non-electrical
machinery, and fertilizers.
The major sources of imports are from Venezuela, Mexico, Chile, Brazil,
Argentina and Peru, whereas the major export destinations are Brazil, Mexico,
Chile, Colombia, Argentina, and Trinidad & Tobago.
In terms of Indian investments in the LAC countries, the focus areas are: steel,
pharmaceuticals, chemicals, engineering products, software, petroleum, mining
and biotechnology.
As stated earlier in this report, the Government of India ‘Focus LAC’ programme
has helped in building the bilateral trade and investment ties. In line with the GoI
strategy, countries in the LAC region constitute a focus region for Exim Bank of
India. A critical component of Exim Bank’s strategy has been to promote and
support two-way trade and investment flows by creating an enabling
environment.
Exim Bank of India has played a key role in Indian companies securing key
projects in the LAC countries by extending lines of credit (LOC) and other
financing support to the host countries.
Mr. Prahalathan Iyer, General Manager, EXIM Bank, India; H.E. Ernesto Carlos Alvarez, Ambassador of Argentina in India; Mr. Roberto Paranhos do Rio Branco, President, Brazil-India Chamber of Commerce and Partner/Director, Rede Achat LTDA, Brazil; H.E. Mr. Hans Dannenberg Castellanos, Ambassador of the Dominican Republic in India, Mr. José Andres Martinez, Vice Chairman, India-Mexico Business Chamber and Business Director, Atento, Mexico in Session on Leveraging Regional Engagement to Strengthen Business Partnerships
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
The Bank has cited that the potential areas
of investments in the LAC region are:
automobiles, energy/biofuels, mining, IT,
pharmaceuticals, ICT, pharmaceuticals
/chemicals, autoparts, biotechnology,
minerals, engineering, machinery, steel and
petroleum products.
The India-LAC bilateral trade and
investment flows are supported by key
bilateral and multilateral agreements, such
as: PTA with Mercosur, IBSA initiative and
BRIC initiative.
The panel also observed that while in the
past the two biggest barriers to trade and
investment relations between LACs and
India were language and distance, the issue
of language has been largely sorted with
many LAC professionals and decision
makers becoming conversant in English.
Besides, the advancement of information
technology has provided the benefit of
translation and the Internet interface has
given the opportunity of conducting
business without stepping out of home.
The session also highlighted investment
opportunities in select LAC regions
–Buenos Aires in Argentina, Mexico and
Brazil.
It was cited that with more LAC countries
opening embassies in India, including
Dominican Republic, the prospects of
bilateral trade and investments has grown
manifold. Five years ago only 10 LAC
countries had embassies in India. However,
the last five years have seen 5 LAC
countries, including Dominican Republic,
opening their embassies in India, which is a
sign of realisation of the importance of
diplomatic ties between India and Latin
America and Caribbean.
15
Figure 7 Projects supported in LAC region by EXIM Bank of India
ØEthanol plant project (Colombia)
ØPharmaceuticals (Mexico, Caribbean)
ØTextile (Mexico, Peru, Argentina)
ØPower Transmission (Brazil)
ØBauxite Mining (Brazil, British Virgin Islands)
ØAtlantic Railway network (Colombia)
ØEl Nino Emergency Assistance Project (Guyana)
ØShipping (Cayman Islands)
Figure 6Sixteen (16) Operative Exam Bank of India, Line of Credit amounting to $173.65 million in LAC region
They include
ØUS$ 30 million to the Government of Honduras
Ø10 million to Central American Bank for Economic Integration (CABEI)
ØUS$ 10 million to Corporacion Andina de Fomento (CAF)
ØUS$ 10 million to Banco de Comercio Exterior de Colombia (Bancoldex), Colombia
ØUS$ 8 million to Republic Bank Ltd., Trinidad & Tobago
ØUS$ 21.1 million (US$ 19 mn & US$ 2.1 mn) to the Government of Guyana
ØUS$ 10 million to Banco Nacional De Comercio Exterior (Bancomext), Mexico
ØUS$ 10 million to Banco Bradesco, Brazil
ØUS$ 47.05 million (US$ 4.3 m, US$ 5.76 mn, US$ 10.59, US$ 16 mn & US$ 10.4 mn) to the Government of Suriname
ØUS$ 10 million to Unibanco, Brazil
ØUS$ 7.5 million to Government of Jamaica
H.E. Mr Hans Dannenberg Castellanos,Ambassador of the Dominican Republic in India
Last five years have seen 5 LAC
countries, including Dominican
Republic, opening their embassies in
India, which is a sign of realisation of
the importance of diplomatic ties
between India and LAC
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
16
In terms of investment opportunities in the LAC region,
the technology district in Buenos Aires came in to sharp
focus. Overall, Buenos Aires was cited to offer: (i)
educational level comparable to average OECD level, (ii)
advanced technical capacities, (iii) high level training
facilities, (iv) a large bilingual population, (v) a large urban
transport network, and (vi) three international airports.
Besides, investors in the city’s technology district could avail of:
ØIncentives: municipal tax exemptions, subsidies in training expenses
and credits from Banco Cuidad
ØModern infrastructure
ØEducation: tax benefits for educational bodies setting up in the district,
training plans and scholarships.
Engagement with Argentina would also open up the investors’ access to the
larger Mercosur markets. It was said that Indian companies would be advised to
prospect for joint ventures in Argentina.
Mexico has been a key business partner for India, especially since the former is
party to the North America Free Trade Agreement (NAFTA) which was signed in
1992 and came into force in 1994 between Canada, USA and Mexico.
The agreement represented a watershed in global trade policy, not just because
of the size of the free trade area it created, but also with regard to the
comprehensiveness of the agreement, which covered not just merchandise
trade but also issues related to investment, labour markets, and environmental
policies. Perhaps the most significant aspect of the agreement, however, was
the fact that it was struck between a developing country and highly developed
economies.
The result has been to a dramatic increase in trade and financial flows among the
NAFTA partners, making North America one of the most economically integrated
regions in the world.
Against this backdrop, Mexico offers (i) access to qualified labour, (ii) specific
clusters of industrial activity, (iii) participation in projects guided by the National
Infrastructure Program 2007-2012.
Moving on to Brazil, the comparative advantages of investing in the country are:
ØBrazil has become an international creditor and is now in investment
grade
ØInflation is under control at 6.8%
ØInternal debt is decreasing as a percentage of GDP: 40.4% in 2008 x
50.4% in 2002
H.E. Mr Ernesto Carlos Alvarez,Ambassador of Argentina in India
Indian business houses should come
forward and look beyond trade
Conf
eren
ce P
roce
edin
gsth4 CII India-Latin America and Caribbean (LAC) Conclave
ØExports are growing fast: 20% in 2008 (August 07 - July/08)
ØConsumption is grown by 7.5% in 2008
ØUnemployment is decreasing and wages are growing
ØIncome concentration is improving: 20 million people left classes E and D
to class C in the last 5 years
ØCredit revolution is underway, reaching 36% of GDP
ØCapital goods production is growing at 14.8% p.a.
ØAn Economic Acceleration Program is underway, supported by $312
billions in 5 years.
The panel also pointed to the Preferential Trade Agreement between Mercosur
and India as key to building India-LAC economic ties. The PTA was concluded in
New Delhi on January 25, 2004, and came into force on June 1.
The agreement covers 450 products from each side, totaling about 900 tariff
lines. Annex I of the agreement contains the list of products offered by Mercosur
to India, with their preference margins. The Mercosur offered preferences on
452 tariff lines. The 450 items included by India are distributed among: the
chemical industry (120 items), machinery, boilers and mechanical appliances (90
items), textiles (40 items) and hides and skins (35 items).
The margins of preferences provided in the Agreement are concentrated around
10 and 20% (for some tariff lines, it is expected a margin of 100%).
It was said that the instrument should facilitate subsequent negotiations for the
establishment of a Free Trade Area of Mercosur - India.
The potential of the India-LAC regional engagement was realigned in ‘CII
Accelerated Marketing Programme Initiative for Latin America & Caribbean
Region. A Survey was planned prior to the Conclave, in February 2010, among CII
Membership to ascertain challenges faced by our membership while doing
business in the region, based on industry feedback, the agenda was set for the
4th CII India LAC Conclave.
The companies already present in LAC region would like to expand to
neighboring markets and establish assembly units, while others would like to
explore new prospects. There is need to build greater trust and confidence
among these participating entities.
In terms of expansion, the key challenges are as under:
ØArgentina’s market is restricted; does not allow free imports of tractors
and other products of Indian origin.
ØArgentina has come up with Import License to restrict import of tractors.
High import duty of 14% exists in Argentina and Brazil.
17
Conf
eren
ce P
roce
edin
gs
th4 CII India-Latin America and Caribbean (LAC) Conclave
16
In terms of investment opportunities in the LAC region,
the technology district in Buenos Aires came in to sharp
focus. Overall, Buenos Aires was cited to offer: (i)
educational level comparable to average OECD level, (ii)
advanced technical capacities, (iii) high level training
facilities, (iv) a large bilingual population, (v) a large urban
transport network, and (vi) three international airports.
Besides, investors in the city’s technology district could avail of:
ØIncentives: municipal tax exemptions, subsidies in training expenses
and credits from Banco Cuidad
ØModern infrastructure
ØEducation: tax benefits for educational bodies setting up in the district,
training plans and scholarships.
Engagement with Argentina would also open up the investors’ access to the
larger Mercosur markets. It was said that Indian companies would be advised to
prospect for joint ventures in Argentina.
Mexico has been a key business partner for India, especially since the former is
party to the North America Free Trade Agreement (NAFTA) which was signed in
1992 and came into force in 1994 between Canada, USA and Mexico.
The agreement represented a watershed in global trade policy, not just because
of the size of the free trade area it created, but also with regard to the
comprehensiveness of the agreement, which covered not just merchandise
trade but also issues related to investment, labour markets, and environmental
policies. Perhaps the most significant aspect of the agreement, however, was
the fact that it was struck between a developing country and highly developed
economies.
The result has been to a dramatic increase in trade and financial flows among the
NAFTA partners, making North America one of the most economically integrated
regions in the world.
Against this backdrop, Mexico offers (i) access to qualified labour, (ii) specific
clusters of industrial activity, (iii) participation in projects guided by the National
Infrastructure Program 2007-2012.
Moving on to Brazil, the comparative advantages of investing in the country are:
ØBrazil has become an international creditor and is now in investment
grade
ØInflation is under control at 6.8%
ØInternal debt is decreasing as a percentage of GDP: 40.4% in 2008 x
50.4% in 2002
H.E. Mr Ernesto Carlos Alvarez,Ambassador of Argentina in India
Indian business houses should come
forward and look beyond trade
Conf
eren
ce P
roce
edin
gs
th4 CII India-Latin America and Caribbean (LAC) Conclave
ØExports are growing fast: 20% in 2008 (August 07 - July/08)
ØConsumption is grown by 7.5% in 2008
ØUnemployment is decreasing and wages are growing
ØIncome concentration is improving: 20 million people left classes E and D
to class C in the last 5 years
ØCredit revolution is underway, reaching 36% of GDP
ØCapital goods production is growing at 14.8% p.a.
ØAn Economic Acceleration Program is underway, supported by $312
billions in 5 years.
The panel also pointed to the Preferential Trade Agreement between Mercosur
and India as key to building India-LAC economic ties. The PTA was concluded in
New Delhi on January 25, 2004, and came into force on June 1.
The agreement covers 450 products from each side, totaling about 900 tariff
lines. Annex I of the agreement contains the list of products offered by Mercosur
to India, with their preference margins. The Mercosur offered preferences on
452 tariff lines. The 450 items included by India are distributed among: the
chemical industry (120 items), machinery, boilers and mechanical appliances (90
items), textiles (40 items) and hides and skins (35 items).
The margins of preferences provided in the Agreement are concentrated around
10 and 20% (for some tariff lines, it is expected a margin of 100%).
It was said that the instrument should facilitate subsequent negotiations for the
establishment of a Free Trade Area of Mercosur - India.
The potential of the India-LAC regional engagement was realigned in ‘CII
Accelerated Marketing Programme Initiative for Latin America & Caribbean
Region. A Survey was planned prior to the Conclave, in February 2010, among CII
Membership to ascertain challenges faced by our membership while doing
business in the region, based on industry feedback, the agenda was set for the
4th CII India LAC Conclave.
The companies already present in LAC region would like to expand to
neighboring markets and establish assembly units, while others would like to
explore new prospects. There is need to build greater trust and confidence
among these participating entities.
In terms of expansion, the key challenges are as under:
ØArgentina’s market is restricted; does not allow free imports of tractors
and other products of Indian origin.
ØArgentina has come up with Import License to restrict import of tractors.
High import duty of 14% exists in Argentina and Brazil.
17
Conf
eren
ce P
roce
edin
gs
th4 CII India-Latin America and Caribbean (LAC) Conclave
18
ØVenezuela has restricted forex release against order / granted Import
License. Import duty of 6% on tractors puts pressure on the prices.
Venezuela is required to release forex authorization to promote trade
between two countries.
ØNegotiation of preferential duty structure (PTA) for Indian products with
the “Focus” LAC countries, especially Argentina & Brazil, and simplified
custom clearance procedures.
ØLAC countries would benefit from free trade / preferential agreements
with each other. These “trade bloc/ groupings” do not recognise
regulatory accreditation made by their member country in the respective
“trade bloc”.
ØOpaque regulations and long delays in dealing with administrative issues
is a hurdle. Both sides have fairly strong governmental intervention in
business, with a high level of controls and clearances.
ØIn the absence of institutional partnership with IABD (Inter-American
Development Bank) - a major regional organisation contributing loans to
infrastructure projects in the region -- Indian companies are not allowed
to take part in bids.
ØLack of information on how to do business in LAC and India adds to
business risks and deters businesses from exploring opportunities.
There is also an emerging need for India to build its engagement with the
different regional trade groupings in LAC, which are:
Mercosur, Andean Community, NAFTA, Central American Integration System
(SICA) G3 Free Trade Agreement (DR-CAFTA), Caribbean Community
(CARICOM) –Central American Common Market (CACM) – Guatemala,
Honduras, El Salvador, Nicaragua and Costa Rica, Enterprise for the American
Initiative (EAI) Latin American Integration Association (LAIA)
The deliberations during the conclave has further highlighted the need for:
ØParticipating governments to expand engagement through new
cooperation arrangements and building upon those already agreed.
ØOperational PTAs with Mercosur and Chile to be expanded into larger
agreements covering all areas of interest such as trade in goods, trade in
services, movement of people, investments, mutual recognition of
standards, harmonization of customs procedures, etc.
ØComprehensive Economic Cooperation Agreements, with regional blocs
as well as bilaterally, should be set in motion.
ØFunds available under Focus LAC could be enhanced to cover trade
offices/representation from industry associations with strong presence
in the region. Professional offices dedicated to trade promotion could
reduce the information gap and provide assistance in negotiating
markets and regulations.
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
ØThere is a good case for investment-led trading. Companies could set up
their own manufacturing centers to access domestic and regional
markets, adding value to local and imported intermediate goods for
ultimate delivery to either India or to other markets. This would expand
opportunities beyond just trading on available goods.
ØStudy prospects for India to partner with Inter-American Development
Bank (IABD) possibly through Exim Bank.
ØSet up LAC Trade Centers in select LAC countries/cities. A rotational
exhibition, wherein everything else is dynamic except the secretariat
which remains at the respective center to build knowledge resource - an
ideal option.
ØIdentify local partners who can sell and distribute products through
existing "Bonded Distribution Center/s, free ports, and would help to
establish local operating subsidiaries and/or joint ventures, in strict
confidence.
ØFacilitate and incubate new and direct shipping routes and direct flights,
with the support of GoI, public sector interventions, PPP and financial
backing.
The expectations were set for Indian Missions in LAC, in terms of
standardisation of information dissemination process, involving:
ØStandardization of websites and content format for Indian audience with
up to date event calendar; relevant fairs / exhibition.
ØEmphasis on Supply Chain Management and business logistical inputs
and travel information including most convenient routes/flights
ØReal-time trade Information on the existing import sources of Focus
products & Services.
ØDigital Directory on Focus Sector/Service/ Segment of LAC with relevant
trade information.
ØProvisions for Digital showcasing of interested Indian SMEs on the
Website (A virtual market place)
ØCatalyzing execution of LAC-Trade Center Initiative for GoI; Setting up of
rotational exhibition representing different industries and services.
19
MOU signed between India and Colombia for business development cooperation
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
On April 30, 2010, Dr. Rahul Khullar,
Secretary, Department of Commerce,
Ministry of Commerce and Industry,
Government of India and H.E. Dr. Juan
Alfredo Pinto Saavedra, Ambassador of
Co lombia in Ind ia s igned the
Memorandum of Understanding on
trade facilitation and investment. The
agreement allows for a Permanent Join Committee to assess
each year the results of balance of trade and investment flows,
and to take steps to remove obstacles and facilitate the
exchange and presence of Indian companies in Colombia.
Source: Embassy of Colombia in India
18
ØVenezuela has restricted forex release against order / granted Import
License. Import duty of 6% on tractors puts pressure on the prices.
Venezuela is required to release forex authorization to promote trade
between two countries.
ØNegotiation of preferential duty structure (PTA) for Indian products with
the “Focus” LAC countries, especially Argentina & Brazil, and simplified
custom clearance procedures.
ØLAC countries would benefit from free trade / preferential agreements
with each other. These “trade bloc/ groupings” do not recognise
regulatory accreditation made by their member country in the respective
“trade bloc”.
ØOpaque regulations and long delays in dealing with administrative issues
is a hurdle. Both sides have fairly strong governmental intervention in
business, with a high level of controls and clearances.
ØIn the absence of institutional partnership with IABD (Inter-American
Development Bank) - a major regional organisation contributing loans to
infrastructure projects in the region -- Indian companies are not allowed
to take part in bids.
ØLack of information on how to do business in LAC and India adds to
business risks and deters businesses from exploring opportunities.
There is also an emerging need for India to build its engagement with the
different regional trade groupings in LAC, which are:
Mercosur, Andean Community, NAFTA, Central American Integration System
(SICA) G3 Free Trade Agreement (DR-CAFTA), Caribbean Community
(CARICOM) –Central American Common Market (CACM) – Guatemala,
Honduras, El Salvador, Nicaragua and Costa Rica, Enterprise for the American
Initiative (EAI) Latin American Integration Association (LAIA)
The deliberations during the conclave has further highlighted the need for:
ØParticipating governments to expand engagement through new
cooperation arrangements and building upon those already agreed.
ØOperational PTAs with Mercosur and Chile to be expanded into larger
agreements covering all areas of interest such as trade in goods, trade in
services, movement of people, investments, mutual recognition of
standards, harmonization of customs procedures, etc.
ØComprehensive Economic Cooperation Agreements, with regional blocs
as well as bilaterally, should be set in motion.
ØFunds available under Focus LAC could be enhanced to cover trade
offices/representation from industry associations with strong presence
in the region. Professional offices dedicated to trade promotion could
reduce the information gap and provide assistance in negotiating
markets and regulations.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
ØThere is a good case for investment-led trading. Companies could set up
their own manufacturing centers to access domestic and regional
markets, adding value to local and imported intermediate goods for
ultimate delivery to either India or to other markets. This would expand
opportunities beyond just trading on available goods.
ØStudy prospects for India to partner with Inter-American Development
Bank (IABD) possibly through Exim Bank.
ØSet up LAC Trade Centers in select LAC countries/cities. A rotational
exhibition, wherein everything else is dynamic except the secretariat
which remains at the respective center to build knowledge resource - an
ideal option.
ØIdentify local partners who can sell and distribute products through
existing "Bonded Distribution Center/s, free ports, and would help to
establish local operating subsidiaries and/or joint ventures, in strict
confidence.
ØFacilitate and incubate new and direct shipping routes and direct flights,
with the support of GoI, public sector interventions, PPP and financial
backing.
The expectations were set for Indian Missions in LAC, in terms of
standardisation of information dissemination process, involving:
ØStandardization of websites and content format for Indian audience with
up to date event calendar; relevant fairs / exhibition.
ØEmphasis on Supply Chain Management and business logistical inputs
and travel information including most convenient routes/flights
ØReal-time trade Information on the existing import sources of Focus
products & Services.
ØDigital Directory on Focus Sector/Service/ Segment of LAC with relevant
trade information.
ØProvisions for Digital showcasing of interested Indian SMEs on the
Website (A virtual market place)
ØCatalyzing execution of LAC-Trade Center Initiative for GoI; Setting up of
rotational exhibition representing different industries and services.
19
MOU signed between India and Colombia for business development cooperation
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
On April 30, 2010, Dr. Rahul Khullar,
Secretary, Department of Commerce,
Ministry of Commerce and Industry,
Government of India and H.E. Dr. Juan
Alfredo Pinto Saavedra, Ambassador of
Co lombia in Ind ia s igned th e
Memorandum of Understanding on
trade facilitation and investment. The
agreement allows for a Permanent Join Committee to assess
each year the results of balance of trade and investment flows,
and to take steps to remove obstacles and facilitate the
exchange and presence of Indian companies in Colombia.
Source: Embassy of Colombia in India
20
Proceedings
As has been cited earlier in this report, South is the new North. The South
countries hold the growth drivers of the global economy by virtue of their
possessing significant food and energy resources. However, the South
countries need to come to terms with this reality and build robust South-South
Cooperation.
Agriculture lends itself as a key cooperation area, especially between India and
geographically expansive LAC countries like Argentina and Brazil. The panel
suggested that India should be reaching out to LAC for outsourced agriculture
solutions, given that the country could soon become a net food importer in the
face of a growing population that will reach 1.6 billion by 2050. LAC countries like
Argentina would be the ideal destinations for outsourcing India’s food needs.
India is already a net importer of edible oils and pulses. The country is likely to be
facing 0.5 million tones shortage of edible oils in the next two decades and is
expected to become a net food importer by 2030 refer figure 8.
As such, agricultural supply in India is maintaining a linear growth, whereas the
demand for food and agricultural products is growing at an exponential rate.
India’s efforts to enhance the agriculture production will be circumscribed by the
small land holdings. The average farm size in the country is a mere 1.0-1.5 acre,
and the farmers have to contend with several mal-incentives like land ceiling,
government-enforced minimum support price, limited access to easy credit, etc.
A National Sample Survey Organisation (NSSO) survey conducted in India found
that 45% of farmers in India would prefer not to be engaged in this field if given a
choice. Water resources in India are also running thin, with the agrarian belts like
Punjab experiencing rapidly falling groundwater levels and soils turning saline.
The country is facing an acute water crisis, which is in contrast to the Latin
American countries that collectively possesses 26% of the world’s freshwater
resources.
Session Chair Mr Dave Ramaswamy, Partner, Allied Venture, Argentina
Panel H.E. Mr Genaro Pappalardo, Ambassador of Paraguay in
India
H.E. Mr Javier Paulinich, Ambassador of Peru in India
Mr Agustin Ontaneda, General Manager, Take Business
Importacion Exportacion, Ecuador
SECTORAL SYNERGIES IN
AGRICULTURE & FOOD PROCESSING
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
21
With expected diversion of water from the source point of the rivers
Brahmaputra, Kosi and Ghandak in Tibet, many parts of the agrarian states in
India could face acute water shortage in the coming years. Hence, agriculture
outsourcing is an option to be considered.
In outsourcing food production to LAC, the key advantages cited are: the low
population base and limited domestic demand, diverse agro-climatic zones,
fertile soils, access to modern technologies and favourable policies that enable
many LAC countries to be key agri-produce exporters.
Indian companies could invest in Argentina’s agricultural sector, keeping in view
the relatively high RoI of 20-25% (annual based on 5 yr average), low cost of land
($200-1500/acre, scalability and low population stress.
Drawing the parallels between the
agriculture sector in Argentina and the IT
sector in India, it was said that both are
export-driven, world class, guided by
robust eco-systems (supported by
uni versit ies, scient ists and service
providers), and low capital costs.
I t It was cited that while India is also looking
t o promote agriculture outsourcing in Africa,
the LAC region would prove to be a better
Mr. Agustin Ontaneda, General Manager, Take Business Importacion Exportacion; H.E. Mr. Genaro Pappalardo, Ambassador of Paraguay in India; Mr. Dave Ramaswamy, Partner, Allied Venture, Argentina;H.E. Mr. Javier Paulinich, Ambassador of Peru in India during a Session on India & LAC: Sectoral Synergies in Agriculture & Food Processing
Source: World watch InstituteBy Dave Ramaswamy, Partner, Allied Venture, Argentina
Figure 8 India, a net food importer
1
1
3
0
6
8
1
6
0
6
9
9
12
15
19
21
26
32
45
0 5 10 15 20 25 30 35 40 45 50
Bangladesh
Ethiopia & Eritrea
Indonesia
Nigeria
Mexico
Egypt
Pakistan
Iran
India
China
Million tons
2030
1990
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
20
Proceedings
As has been cited earlier in this report, South is the new North. The South
countries hold the growth drivers of the global economy by virtue of their
possessing significant food and energy resources. However, the South
countries need to come to terms with this reality and build robust South-South
Cooperation.
Agriculture lends itself as a key cooperation area, especially between India and
geographically expansive LAC countries like Argentina and Brazil. The panel
suggested that India should be reaching out to LAC for outsourced agriculture
solutions, given that the country could soon become a net food importer in the
face of a growing population that will reach 1.6 billion by 2050. LAC countries like
Argentina would be the ideal destinations for outsourcing India’s food needs.
India is already a net importer of edible oils and pulses. The country is likely to be
facing 0.5 million tones shortage of edible oils in the next two decades and is
expected to become a net food importer by 2030 refer figure 8.
As such, agricultural supply in India is maintaining a linear growth, whereas the
demand for food and agricultural products is growing at an exponential rate.
India’s efforts to enhance the agriculture production will be circumscribed by the
small land holdings. The average farm size in the country is a mere 1.0-1.5 acre,
and the farmers have to contend with several mal-incentives like land ceiling,
government-enforced minimum support price, limited access to easy credit, etc.
A National Sample Survey Organisation (NSSO) survey conducted in India found
that 45% of farmers in India would prefer not to be engaged in this field if given a
choice. Water resources in India are also running thin, with the agrarian belts like
Punjab experiencing rapidly falling groundwater levels and soils turning saline.
The country is facing an acute water crisis, which is in contrast to the Latin
American countries that collectively possesses 26% of the world’s freshwater
resources.
Session Chair Mr Dave Ramaswamy, Partner, Allied Venture, Argentina
Panel H.E. Mr Genaro Pappalardo, Ambassador of Paraguay in
India
H.E. Mr Javier Paulinich, Ambassador of Peru in India
Mr Agustin Ontaneda, General Manager, Take Business
Importacion Exportacion, Ecuador
SECTORAL SYNERGIES IN
AGRICULTURE & FOOD PROCESSING
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
21
With expected diversion of water from the source point of the rivers
Brahmaputra, Kosi and Ghandak in Tibet, many parts of the agrarian states in
India could face acute water shortage in the coming years. Hence, agriculture
outsourcing is an option to be considered.
In outsourcing food production to LAC, the key advantages cited are: the low
population base and limited domestic demand, diverse agro-climatic zones,
fertile soils, access to modern technologies and favourable policies that enable
many LAC countries to be key agri-produce exporters.
Indian companies could invest in Argentina’s agricultural sector, keeping in view
the relatively high RoI of 20-25% (annual based on 5 yr average), low cost of land
($200-1500/acre, scalability and low population stress.
Drawing the parallels between the
agriculture sector in Argentina and the IT
sector in India, it was said that both are
export-driven, world class, guided by
robust eco-systems (supported by
uni versit ies, scient ists and service
providers), and low capital costs.
I t It was cited that while India is also looking
t o promote agriculture outsourcing in Africa,
the LAC region would prove to be a better
Mr. Agustin Ontaneda, General Manager, Take Business Importacion Exportacion; H.E. Mr. Genaro Pappalardo, Ambassador of Paraguay in India; Mr. Dave Ramaswamy, Partner, Allied Venture, Argentina;H.E. Mr. Javier Paulinich, Ambassador of Peru in India during a Session on India & LAC: Sectoral Synergies in Agriculture & Food Processing
Source: World watch InstituteBy Dave Ramaswamy, Partner, Allied Venture, Argentina
Figure 8 India, a net food importer
1
1
3
0
6
8
1
6
0
6
9
9
12
15
19
21
26
32
45
0 5 10 15 20 25 30 35 40 45 50
Bangladesh
Ethiopia & Eritrea
Indonesia
Nigeria
Mexico
Egypt
Pakistan
Iran
India
China
Million tons
2030
1990
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
23
ØBiodiversity - to meet demand for
new farm products.
As of now, the main Indian farm imports
from Peru include beans, spinosa
caesalpinea (tara), grapes, lima beans, and
asparagus. And, the main farm Indian
exports into Peru include: cotton, onion dry,
and soja.
It was cited that exotic nutritional products
made in Peru, such as, Maca, Aguaymanto,
Camu Camu, Kiwicha, Sacha Inchi, and
Algarrobo will find ready markets in India.
The panel informed that Indian businesses
are invited to part icipate in the
Expoalimentaria Fair 2010 being organised
in Lima during September 22-24 this year.
Ecuador could be also become a strong
agriculture base for Indian investors.
Highlighting this, the panel observed that
bilateral trade volume at $70 million could
increase further from the current levels.
The India- Ecuador Chamber of Commerce,
Trade & Tourism has played a pioneering
role in providing advisory services,
consultancy, facilitation services, etc., and
in enhancing the bilateral business
exchanges.
It was suggested that India and LAC
countries should bring about better
coordination of safety control bodies
similar to the IBSA scheme and increase
cooperation to confront food security
crisis. LAC could also be a source of
traditional and exotic products of high
nutritional and protein value. India should
look to organise more commercial
missions to LAC and participate in
specialised fairs in the region.
Exim Bank of India, Projects Supported in LAC Region
Success Stories - Supply of Crash Fire Tenders to Suriname
Ten fire tenders have been supplied to Suriname under GoI Line of Credit worth US$ 4.3 million. These crash fire tenders have been designed and modified by BEML to suit local conditions in Suriname. The fire tenders, built on TATRA BEML Chasis have powerful engines developing 300 KW power(12,667 cc) and are capable of negotiating difficult terrain and rough surfaces at high speeds.
Success Stories – Guyana Traffic Signalling System
Success Stories – Guyana National Cricket Stadium
The new and modern traffic signal system will improve traffic management and safety. It is also expected to prevent accidents, injury, deaths and property loss. The traffic lights project was financed under a Line of Credit extended to Govt. of Guyana and the works being carried out by CMS Traffic Systems Ltd.
A cricket stadium was constructed in Georgetown, Guyana, by M/S Shapoorji Pallonji Ltd., Mumbai. The design and construction of this stadium, at which several matches of the ICC World Cup 2007 was played, has been financed by Exim Bank under a Line of Credit extended to the Government of Guyana.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
22
bet, considering the inherent advantages
that the latter offers. Cultural compatibility
would lend further substance to the
partnerships.
Like Argentina, Paraguay holds rich water
and energy resources, but only has a
population of 6 million. This country is
another likely destination for Indian
investments in the farm sector.
Paraguay is a larger producer of oilseeds,
foodgrains like wheat and is the fifth largest
exporter of soyabean. Indian farm
equipment manufacturing companies have
made an impression in the Paraguay
market.
As such, India-Paraguay bilateral trade
doubled in 2009 to $140 million, and a larger
number of Indian companies are looking to
mark their presence in this southern
American country.
Peru has also made a pitch for Indian
investments in its farm sector, given that it
has 84 of the 114 agro zones that support
agriculture. Peru produces a wide variety of
agricultural products, which will be of
essence to the Indian markets.
Among the comparative advantages cited
were: (i) privileged geographic location &
off-season production, (ii) relatively stable
climate, (iii) intrinsic product quality, (iv)
extended harvesting seasons, (v) robust
labour market, and (vi) favourable
ecosystems & large biodiversity.
The investment opportunities in Peruvian
farm sector stem from:
ØTariff preferences for Peruvian
products in the US and EU.
ØAccess to Asian markets.
ØGrowth in demand for organic
products.
For the first time at the Conclave, Paraguay was
represented by the participation of two senior business
leaders from the country. According to H.E. Mr Genaro
Pappalardo, Ambassador of Paraguay in India, who was
instrumental on organising the participation of
businessmen from Paraguay, "Paraguay is keen to build
business partnerships with India. After the recent visit of
a delegation of business leaders in the agro-chemicals
sector, we had two senior representatives from
Paraguayan companies participating in the Conclave for
the first time to explore business opportunities. Mr
Ernesto Ayala Barreto, CEO of Inzucal SA, represents the
lime production and transportation and agro-chemicals
sectors, while Mr Juan Carlos Guanes, CEO of Trafosur
S.A. represents the heavy electrical equipment sector.
Both had very useful meetings and we hope that these
discussions would soon result in some form of business
tie-ups for these companies."
Paraguayan participation for thefirst time at the Conclave
H.E. Mr Genaro Pappalardo
Ambassador of Paraguay in India
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Figure 9 Indian Investment & Joint Ventures in LAC
Sectors
Companies
ØSteel ØSoftware
ØPharmaceuticals ØPetroleum
ØChemicals ØMining
ØEngineering products ØBiotechnology
ØJindal Steel & Power Ltd., Essar Steel Ltd.;
ØRanbaxy, Core Healthcare. Dr. Reddy’s, Stride Acrolabs, CIPLA, Torrent, Aurobindo Pharma, IPCA Labs;
ØBajaj Ltd.;
ØPatni Computer Systems, Tech Mahindra, TCS, NIIT, APTECH, Tata Infotech
ØONGC Videsh, Reliance
ØMahindra & Mahindra
ØShree Renuka Sugars, Praj Industries
23
ØBiodiversity - to meet demand for
new farm products.
As of now, the main Indian farm imports
from Peru include beans, spinosa
caesalpinea (tara), grapes, lima beans, and
asparagus. And, the main farm Indian
exports into Peru include: cotton, onion dry,
and soja.
It was cited that exotic nutritional products
made in Peru, such as, Maca, Aguaymanto,
Camu Camu, Kiwicha, Sacha Inchi, and
Algarrobo will find ready markets in India.
The panel informed that Indian businesses
are invited to part icipate in the
Expoalimentaria Fair 2010 being organised
in Lima during September 22-24 this year.
Ecuador could be also become a strong
agriculture base for Indian investors.
Highlighting this, the panel observed that
bilateral trade volume at $70 million could
increase further from the current levels.
The India- Ecuador Chamber of Commerce,
Trade & Tourism has played a pioneering
role in providing advisory services,
consultancy, facilitation services, etc., and
in enhancing the bilateral business
exchanges.
It was suggested that India and LAC
countries should bring about better
coordination of safety control bodies
similar to the IBSA scheme and increase
cooperation to confront food security
crisis. LAC could also be a source of
traditional and exotic products of high
nutritional and protein value. India should
look to organise more commercial
missions to LAC and participate in
specialised fairs in the region.
Exim Bank of India, Projects Supported in LAC Region
Success Stories - Supply of Crash Fire Tenders to Suriname
Ten fire tenders have been supplied to Suriname under GoI Line of Credit worth US$ 4.3 million. These crash fire tenders have been designed and modified by BEML to suit local conditions in Suriname. The fire tenders, built on TATRA BEML Chasis have powerful engines developing 300 KW power(12,667 cc) and are capable of negotiating difficult terrain and rough surfaces at high speeds.
Success Stories – Guyana Traffic Signalling System
Success Stories – Guyana National Cricket Stadium
The new and modern traffic signal system will improve traffic management and safety. It is also expected to prevent accidents, injury, deaths and property loss. The traffic lights project was financed under a Line of Credit extended to Govt. of Guyana and the works being carried out by CMS Traffic Systems Ltd.
A cricket stadium was constructed in Georgetown, Guyana, by M/S Shapoorji Pallonji Ltd., Mumbai. The design and construction of this stadium, at which several matches of the ICC World Cup 2007 was played, has been financed by Exim Bank under a Line of Credit extended to the Government of Guyana.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
22
bet, considering the inherent advantages
that the latter offers. Cultural compatibility
would lend further substance to the
partnerships.
Like Argentina, Paraguay holds rich water
and energy resources, but only has a
population of 6 million. This country is
another likely destination for Indian
investments in the farm sector.
Paraguay is a larger producer of oilseeds,
foodgrains like wheat and is the fifth largest
exporter of soyabean. Indian farm
equipment manufacturing companies have
made an impression in the Paraguay
market.
As such, India-Paraguay bilateral trade
doubled in 2009 to $140 million, and a larger
number of Indian companies are looking to
mark their presence in this southern
American country.
Peru has also made a pitch for Indian
investments in its farm sector, given that it
has 84 of the 114 agro zones that support
agriculture. Peru produces a wide variety of
agricultural products, which will be of
essence to the Indian markets.
Among the comparative advantages cited
were: (i) privileged geographic location &
off-season production, (ii) relatively stable
climate, (iii) intrinsic product quality, (iv)
extended harvesting seasons, (v) robust
labour market, and (vi) favourable
ecosystems & large biodiversity.
The investment opportunities in Peruvian
farm sector stem from:
ØTariff preferences for Peruvian
products in the US and EU.
ØAccess to Asian markets.
ØGrowth in demand for organic
products.
For the first time at the Conclave, Paraguay was
represented by the participation of two senior business
leaders from the country. According to H.E. Mr Genaro
Pappalardo, Ambassador of Paraguay in India, who was
instrumental on organising the participation of
businessmen from Paraguay, "Paraguay is keen to build
business partnerships with India. After the recent visit of
a delegation of business leaders in the agro-chemicals
sector, we had two senior representatives from
Paraguayan companies participating in the Conclave for
the first time to explore business opportunities. Mr
Ernesto Ayala Barreto, CEO of Inzucal SA, represents the
lime production and transportation and agro-chemicals
sectors, while Mr Juan Carlos Guanes, CEO of Trafosur
S.A. represents the heavy electrical equipment sector.
Both had very useful meetings and we hope that these
discussions would soon result in some form of business
tie-ups for these companies."
Paraguayan participation for thefirst time at the Conclave
H.E. Mr Genaro Pappalardo
Ambassador of Paraguay in India
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Figure 9 Indian Investment & Joint Ventures in LAC
Sectors
Companies
ØSteel ØSoftware
ØPharmaceuticals ØPetroleum
ØChemicals ØMining
ØEngineering products ØBiotechnology
ØJindal Steel & Power Ltd., Essar Steel Ltd.;
ØRanbaxy, Core Healthcare. Dr. Reddy’s, Stride Acrolabs, CIPLA, Torrent, Aurobindo Pharma, IPCA Labs;
ØBajaj Ltd.;
ØPatni Computer Systems, Tech Mahindra, TCS, NIIT, APTECH, Tata Infotech
ØONGC Videsh, Reliance
ØMahindra & Mahindra
ØShree Renuka Sugars, Praj Industries
24
Proceedings
India-LAC partnership in the infrastructure and engineering sector is poised for
growth since India in particular showed no signs of negative growth during the
recent global meltdown. There is a huge potential for joint ventures and long-
term business cooperation between India and LAC that could lead to strong
relations between the two regions. Areas like infrastructure, capacity building,
skill development and technology sharing could be considered for long-term
partnerships.
The panel observed that Indian companies should explore investment
opportunities in core and infrastructure projects in LAC countries, especially in
sectors like railways, mass rapid transport
systems (MRTS), coal mining, alternative
energy and oil exploration.
Chile was cited as a key investment
destination for Indian infrastructure, heavy
engineering and project management
companies. The Chilean economy is rated
as one of the healthiest Latin America
economies by the International Monetary
Fund (IMF). However, the consequences of
the serious earthquake had taken a heavy
toll on the economy.
Broadly, Chile possesses one of the most
open economies in the region with low
Session Chair Ambassador VB Soni , Chairman, Overseas
Infrastructure Alliance Pvt Ltd, India
Panel Mr Alenjandro Arrau de la Sotta, Verne LTDA, Chile
Mr Raul E Santaella, Vice-President, Business
Development, Santaella & Asociados, SA, Dominican
Republic
Mr AK Gupta, Voce- President,, Angelique International
Limited
SECTORAL SYNERGIES IN
INFRASTRUCTURE, ENGINEERING
& PROJECT MANAGEMENT
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
By Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile• The mining exports have increased significantly from the year 2004.• The mining exports represented 59% of the amount exported between 2006 and 2009.• The copper continues being the principal export, and in the last years he has constituted about a 85% of the
mining exports.
Figure 10 Chilean Mining in the World
60.000
50.000
40.000
30.000
20.000
10.000
0
70%
60%
50%
40%
30%
20%
10%
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
29
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
Copper ParticipationRest of miningindustry
25
customs rates and strong orientation to exports. Notably, for more than 12 years
the Chilean GDP grew at 7% p.a., while the inflation rate was a little more than
4% p.a.
Chile is a member of APEC and of Mercosur and has signed commercial
agreements with the EU, Mexico and Canada, and Preferential Trade Agreement
(PTA) with India. In the Global Competitiveness Index, Chile is cited as the most
competitive country of Latin America. Inside the general ranking, Chile locates in ththe 27 position among 125 economies.
Mining is the most dominant sector in Chile and
holds much promise for Indian investors. The
advantages of investing in Chile are:
ØA sound domestic legal framework
ensuring stability and security.
ØNational treatment and attractive
opportunities for foreign investment.
ØHighly skilled mining specialists.
ØAdvanced energy infrastructure and
transportation network.
ØClusters of goods and services suppliers
located in key mining areas.
Mr. Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile; Ambassador V B Soni, Chairman, Overseas Infrastructure Alliance, (I) Pvt Ltd, India; Mr. Raul E. Santaella, Vice President - Business Development, Santaella & Asociados, S.A.,Dominican Republic; Mr. A K Gupta, Vice President, Angelique International Ltd, India at Session on India & LAC: Sectoral Synergies in Infrastructure, Engineering and Project Management
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Figure 11 Chile in the World
Mining Industry
Services
Fishing
Forest Industry
Extraction of raw
materials
Manufacture
Tourism
Principal activities in
Chile
24
Proceedings
India-LAC partnership in the infrastructure and engineering sector is poised for
growth since India in particular showed no signs of negative growth during the
recent global meltdown. There is a huge potential for joint ventures and long-
term business cooperation between India and LAC that could lead to strong
relations between the two regions. Areas like infrastructure, capacity building,
skill development and technology sharing could be considered for long-term
partnerships.
The panel observed that Indian companies should explore investment
opportunities in core and infrastructure projects in LAC countries, especially in
sectors like railways, mass rapid transport
systems (MRTS), coal mining, alternative
energy and oil exploration.
Chile was cited as a key investment
destination for Indian infrastructure, heavy
engineering and project management
companies. The Chilean economy is rated
as one of the healthiest Latin America
economies by the International Monetary
Fund (IMF). However, the consequences of
the serious earthquake had taken a heavy
toll on the economy.
Broadly, Chile possesses one of the most
open economies in the region with low
Session Chair Ambassador VB Soni , Chairman, Overseas
Infrastructure Alliance Pvt Ltd, India
Panel Mr Alenjandro Arrau de la Sotta, Verne LTDA, Chile
Mr Raul E Santaella, Vice-President, Business
Development, Santaella & Asociados, SA, Dominican
Republic
Mr AK Gupta, Voce- President,, Angelique International
Limited
SECTORAL SYNERGIES IN
INFRASTRUCTURE, ENGINEERING
& PROJECT MANAGEMENT
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
By Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile• The mining exports have increased significantly from the year 2004.• The mining exports represented 59% of the amount exported between 2006 and 2009.• The copper continues being the principal export, and in the last years he has constituted about a 85% of the
mining exports.
Figure 10 Chilean Mining in the World
60.000
50.000
40.000
30.000
20.000
10.000
0
70%
60%
50%
40%
30%
20%
10%
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
29
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
Copper ParticipationRest of miningindustry
25
customs rates and strong orientation to exports. Notably, for more than 12 years
the Chilean GDP grew at 7% p.a., while the inflation rate was a little more than
4% p.a.
Chile is a member of APEC and of Mercosur and has signed commercial
agreements with the EU, Mexico and Canada, and Preferential Trade Agreement
(PTA) with India. In the Global Competitiveness Index, Chile is cited as the most
competitive country of Latin America. Inside the general ranking, Chile locates in ththe 27 position among 125 economies.
Mining is the most dominant sector in Chile and
holds much promise for Indian investors. The
advantages of investing in Chile are:
ØA sound domestic legal framework
ensuring stability and security.
ØNational treatment and attractive
opportunities for foreign investment.
ØHighly skilled mining specialists.
ØAdvanced energy infrastructure and
transportation network.
ØClusters of goods and services suppliers
located in key mining areas.
Mr. Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile; Ambassador V B Soni, Chairman, Overseas Infrastructure Alliance, (I) Pvt Ltd, India; Mr. Raul E. Santaella, Vice President - Business Development, Santaella & Asociados, S.A.,Dominican Republic; Mr. A K Gupta, Vice President, Angelique International Ltd, India at Session on India & LAC: Sectoral Synergies in Infrastructure, Engineering and Project Management
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Figure 11 Chile in the World
Mining Industry
Services
Fishing
Forest Industry
Extraction of raw
materials
Manufacture
Tourism
Principal activities in
Chile
26
ØChile is home to some of the world’s largest, better known copper mines.
Approximately 80% of Chilean production comes from porphyry copper
deposits rich in molybdenum, gold, and silver byproducts.
Moving on to Dominican Republic, the panel noted that advantages of investing
in this country are: democratic polity, inclusive and egalitarian society, GDP
growth in spite of global economic turmoil, marked need for energy
infrastructure, experience in EPC contracts and BOT concessions, leverage
influx of aid to Haiti, strengthening relationship between India and Dominican
Republic, EXIM Bank financing from traditional sources, and lack of diplomatic
relations with People’s Republic of China.
There is a large energy requirement in Dominican Republic leading to big
potential for Indian companies in this area. The Achilles heel of the Dominican
economy has been its weak and deficit ridden energy sector. To meet the current
supply deficit of around 500-600 MW and to continue meeting demand from
then on, the country will need to install an additional 2,400 MW of base load
generation. Of these 1,200 MW are already in the Greenfield/bidding process.
Along with that additional generation capacity, more than 300 KM of
transmission lines at 345 KV will be needed to distribute that energy and have it
reach the end users. The opportunities here would be to offer an EPC package
with government to government financing or a BOT to be paid off by the tolls that
are collected from the transported energy.
Dominican Republic was the first country to join the international community in
providing aid to fellow Haitians. There is scope for international companies to
bring aid and/or financing, or take advantage of the financing to be provided by
multilateral organizations by setting up shop in DR as a base of operations for the
whole region.
The fact that the DR has diplomatic relations with Taiwan means China cannot
offer financing to the country. China has made lots of headway in many countries
in the region but for one reason or another, this has not happened in the DR.
Herein lies another opportunity for India to cash in, by entering into long-term
agreements with DR companies covering long-gestation projects.
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
27
Tango Dance performance by Mr. Jonathan Spitel and Ms. Betsabé Flores from Argentina, World Champions of Tango
Participants and guests were treated to a
superlative Tango dance performance by
Jonathan Spitel and Betsabé Flores from
Buenos Aires, the current world tango
champions. The Tango is a social dance and a
musical genre that originated in Argentina
and Uruguay, in the area of the Rio de la
Plata. Tango as a dance has influences from
Spanish and African culture and originated in
lower-class districts of Buenos Aires, the
music derived from the fusion of various
forms of music from Europe. In 2009 the
tango was declared as part of the world's
"intangible cultural heritage" by UNESCO.
Sahajanand Medical Technologies Pvt Ltd
hosted dinner for all delegates.
Scintillating Tango performance byWorld Champion Duo
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
26
ØChile is home to some of the world’s largest, better known copper mines.
Approximately 80% of Chilean production comes from porphyry copper
deposits rich in molybdenum, gold, and silver byproducts.
Moving on to Dominican Republic, the panel noted that advantages of investing
in this country are: democratic polity, inclusive and egalitarian society, GDP
growth in spite of global economic turmoil, marked need for energy
infrastructure, experience in EPC contracts and BOT concessions, leverage
influx of aid to Haiti, strengthening relationship between India and Dominican
Republic, EXIM Bank financing from traditional sources, and lack of diplomatic
relations with People’s Republic of China.
There is a large energy requirement in Dominican Republic leading to big
potential for Indian companies in this area. The Achilles heel of the Dominican
economy has been its weak and deficit ridden energy sector. To meet the current
supply deficit of around 500-600 MW and to continue meeting demand from
then on, the country will need to install an additional 2,400 MW of base load
generation. Of these 1,200 MW are already in the Greenfield/bidding process.
Along with that additional generation capacity, more than 300 KM of
transmission lines at 345 KV will be needed to distribute that energy and have it
reach the end users. The opportunities here would be to offer an EPC package
with government to government financing or a BOT to be paid off by the tolls that
are collected from the transported energy.
Dominican Republic was the first country to join the international community in
providing aid to fellow Haitians. There is scope for international companies to
bring aid and/or financing, or take advantage of the financing to be provided by
multilateral organizations by setting up shop in DR as a base of operations for the
whole region.
The fact that the DR has diplomatic relations with Taiwan means China cannot
offer financing to the country. China has made lots of headway in many countries
in the region but for one reason or another, this has not happened in the DR.
Herein lies another opportunity for India to cash in, by entering into long-term
agreements with DR companies covering long-gestation projects.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
27
Tango Dance performance by Mr. Jonathan Spitel and Ms. Betsabé Flores from Argentina, World Champions of Tango
Participants and guests were treated to a
superlative Tango dance performance by
Jonathan Spitel and Betsabé Flores from
Buenos Aires, the current world tango
champions. The Tango is a social dance and a
musical genre that originated in Argentina
and Uruguay, in the area of the Rio de la
Plata. Tango as a dance has influences from
Spanish and African culture and originated in
lower-class districts of Buenos Aires, the
music derived from the fusion of various
forms of music from Europe. In 2009 the
tango was declared as part of the world's
"intangible cultural heritage" by UNESCO.
Sahajanand Medical Technologies Pvt Ltd
hosted dinner for all delegates.
Scintillating Tango performance byWorld Champion Duo
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
28
ThemeImproved connectivity between India and Latin America is the essential first step
towards developing a deeper trade and economic relationship. Developing logistical
chains and creating inter-connected transportation hubs will address more than just the
trade needs on both sides. There is need for policy intervention with strong private sector
involvement in this critical area.
Proceedings
Transport connectivity and logistics
between India and the LAC region will
largely determine the course of bilateral
trade and investment flows. The current
situation demands the active intervention
of governments and industry on both sides
to address the vexed issues. Shipping
routes between India and LAC calls merits
close attention.
Shipping routes reflect the world trade
flows. That is, ocean transportation is
central to trade movement, since 90% of
world trade moves by sea and 80% of the
world’s population lives within a 200 km
radius of all oceans and seas.
Increase in shipping lines will reduce the
transaction costs of goods moving
between India and the LAC countries.
The panel noted that ‘Go East’ will be the
right approach to reach the Pacific coast of
Session Chair Mr Praful Talera, Executive Director, Dynamic Logistics
Panel H.E. Mr Carlos Abad, Ambassador of Ecuador in India
H.E. Ms Angela Patricia Figueroa Rodriguez, Executive
Director, CAMTEX, El Salvador
Mr Cesar Ferrer, Ambassador of Uruguay in India
TRANSPORTATION AND LOGISTICS:
BRINGING INDIA AND LAC CLOSE
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Figure 12 Logistic and Transportation
India- South America Pacific Coast
Figure 13 Logistic and Transportation: Challenge
Time: 45/50 days
Panama CanalSuez CanalSomalie Cost
Main routes aredefined bylarger players
Increase pricesof goods
29
LAC. As such, South Africa serves as an
efficient and economical staging area for
movement of goods between India and the
Atlantic coast of LAC region, but the route
from the eastern seaboard of India via
south east Asia to the Pacific coast of Latin
America will be a highly advantageous
route. [See Figure 14]
Several LAC countries serve as entry points
to the region’s markets. Take the case of
Ecuador. Focus on logistics and transport
connectivity between India and the Pacific
coast of LAC region will positively impact
the bilateral trade flows with Chile, Peru,
Ecuador and Colombia. Currently,
movement of merchandise trade between
these two regions is hampered by long
delays that extend to even 4 months.
El Salvador in Meso-America stands out as
a gateway to the region. The Central
American region is a recipient of 20% of
India’s exports to Latin America. El Salvador
is also an avenue for third country exports
to the US.
H.E. Cesar Ferrer, Ambassador of Uruguay in India; Mr. Praful Talera, Member of CII LAC Committee and Executive Director, Dynamic Logistics, India; H.E. Mr. Carlos Abad, Ambassador of Ecuador in India; Ms. Angela Patricia Figueroa Rodriguez, Executive Director, CAMTEX, El Salvador
PACIFIC
INDIAN OCEAN
ATLANTIC OCEAN
SOUTH AMERICA
ASIA
EUROPENORTH AMERICA
AFRICA
AUSTRALIA
ANTARTICA
OCEAN
Figure 14 India- LAC shipping routes
Approach to Atlantic coast
Approach to Pacific coast
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
28
ThemeImproved connectivity between India and Latin America is the essential first step
towards developing a deeper trade and economic relationship. Developing logistical
chains and creating inter-connected transportation hubs will address more than just the
trade needs on both sides. There is need for policy intervention with strong private sector
involvement in this critical area.
Proceedings
Transport connectivity and logistics
between India and the LAC region will
largely determine the course of bilateral
trade and investment flows. The current
situation demands the active intervention
of governments and industry on both sides
to address the vexed issues. Shipping
routes between India and LAC calls merits
close attention.
Shipping routes reflect the world trade
flows. That is, ocean transportation is
central to trade movement, since 90% of
world trade moves by sea and 80% of the
world’s population lives within a 200 km
radius of all oceans and seas.
Increase in shipping lines will reduce the
transaction costs of goods moving
between India and the LAC countries.
The panel noted that ‘Go East’ will be the
right approach to reach the Pacific coast of
Session Chair Mr Praful Talera, Executive Director, Dynamic Logistics
Panel H.E. Mr Carlos Abad, Ambassador of Ecuador in India
H.E. Ms Angela Patricia Figueroa Rodriguez, Executive
Director, CAMTEX, El Salvador
Mr Cesar Ferrer, Ambassador of Uruguay in India
TRANSPORTATION AND LOGISTICS:
BRINGING INDIA AND LAC CLOSE
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Figure 12 Logistic and Transportation
India- South America Pacific Coast
Figure 13 Logistic and Transportation: Challenge
Time: 45/50 days
Panama CanalSuez CanalSomalie Cost
Main routes aredefined bylarger players
Increase pricesof goods
29
LAC. As such, South Africa serves as an
efficient and economical staging area for
movement of goods between India and the
Atlantic coast of LAC region, but the route
from the eastern seaboard of India via
south east Asia to the Pacific coast of Latin
America will be a highly advantageous
route. [See Figure 14]
Several LAC countries serve as entry points
to the region’s markets. Take the case of
Ecuador. Focus on logistics and transport
connectivity between India and the Pacific
coast of LAC region will positively impact
the bilateral trade flows with Chile, Peru,
Ecuador and Colombia. Currently,
movement of merchandise trade between
these two regions is hampered by long
delays that extend to even 4 months.
El Salvador in Meso-America stands out as
a gateway to the region. The Central
American region is a recipient of 20% of
India’s exports to Latin America. El Salvador
is also an avenue for third country exports
to the US.
H.E. Cesar Ferrer, Ambassador of Uruguay in India; Mr. Praful Talera, Member of CII LAC Committee and Executive Director, Dynamic Logistics, India; H.E. Mr. Carlos Abad, Ambassador of Ecuador in India; Ms. Angela Patricia Figueroa Rodriguez, Executive Director, CAMTEX, El Salvador
PACIFIC
INDIAN OCEAN
ATLANTIC OCEAN
SOUTH AMERICA
ASIA
EUROPENORTH AMERICA
AFRICA
AUSTRALIA
ANTARTICA
OCEAN
Figure 14 India- LAC shipping routes
Approach to Atlantic coast
Approach to Pacific coast
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
30
El Salvador has thus emerged as the
logistics hub in the Mesoamerican region.
The new port in El Salvador ‘Port of La
Union’ will enable Indian exporters to reach
new markets on the Pacific coast of LAC
region. A market of 70 million people could
be accessed from this central American
country.
El Salvador offers FTZs, logistics and
service parks that support manufacturing
operations and valued added distribution
facilities. It is also the second most open
economy in the region after Chile.
The Mesoamerican Pacific Corridor will
ease the movement of goods between
Mexico and Panama, which will be a big
boost for transit trade in the country.
There are two major operations ports in El Salvador: Cutuco and La Union. The
Port of Cutuco, built on Salvadoran territory on the Gulf of Fonseca will be the
largest container port serving the region between Panama and Northern Mexico.
It will eventually be able to service Post-Panamax container carriers up to 6,000
TEU capacity. The port holds prospects for land-bridge connecting overland to
Caribbean ports in less than 8 hours.
The port of La Union is a deep sea port with capacity to receive post Panamax
boats. It is located at a short distance from the Panama Canal (1.5 days).
El Salvador is also connected by air to the whole continent with daily flights to 40
cities in 22 countries and major cities in the US.
The key advantages in investing in El Salvador are:
ØNearshore market to the USA
ØLocated in the middle of the route of Pacific Asia and the European
Union
ØMore than 40 million people in the Mesoamerican region (South Mexico
to Panama)
ØFTAs with Mexico, Panama, USA, Central America, Colombia, Dominican
Republic and Taiwan and an Association Agreement is being negotiated
with the European Union.
El Salvador would look to India for expertise in railway constructions and
systems. The Port of La Union is not in competition with the Panama Canal but
complements it. Also, the area around the Port of La Union is seeing major port
infrastructure development projects that hold several investment opportunities
for Indian players.
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Source : World Competitiveness Report 2008-2009By Angela Patricia Figueroa Rodriguez, Executive Director, Camtex, El Salvador
Figure 15 Infrastructures in Latin America
Conf
eren
ce P
roce
edin
gs
Chile
El S
alv
ador
Panam
á
Guate
mala
Uru
guary
Hondura
s
Méxic
o
Colo
mbia
Arg
entina
Bra
sil
Costa
Ric
a
Ecuador
Venezu
ela
Perú
Nic
ara
gua
Para
guary
6
5
4
3
2
1
0
World average: 3.8
One of the best Infrastructure in Latin America
31
Uruguay was another country that
showcased its transit trade and logistics
facilities at the session. The country has
been described as a natural geographic and
economic “hub” at the centre of a market
inhabited by more than 238 million
consumers, with the highest per capita
income in the continent, and a GDP of $1.63
billion.
Uruguay has a diverse and extensive
communications network which adds to
the competitiveness of the financial
s e r v i c e s a n d b u s i n e s s s u p p o r t
infrastructure, and facilitates access to
core of Mercosur and other countries and
regions of the world.
The free port and airport in Montevideo is considered as a “logistic hub” for
distributing products and services to neighbouring larger markets in the region.
Importantly, the Secretariat of Mercosur is located in Montevideo.
Montevideo is the first and only free port on the South American Atlantic coast.
During their stay in the port, goods are exempt from all taxes and charges
applicable at the time of import. Also, the port is a customs exclusion zone,
wherein it is possible to contract international shipping services such as
container terminals and warehousing through private operators.
While Uruguay accounts for only 2% of the LAC GDP, it sees 64% of extra-
regional transshipments in the region. The panel said that Montevideo has the
‘Rotterdam effect’ which is about a small country catering to a large global
country.
Referring to the state of Indian logistics, the panel observed that the industry is
in dire need of efficient processes and systems, given that 40% of fruits and
vegetables produced in the country are wasted owing to limited cold chain
facilities.
The Indian logistics industry is highly fragmented, though consolidation is
expected to take place in the coming years, which will make the services
efficient and cost-effective. As of now, investment in warehouses, transport
centers, ICDs, etc., is sporadic and the “Integrated Cold Chain” is nearly non-
existent. This current state of Indian logistics industry is a
compelling opportunity for foreign investors. As such,
the country is making good progress with the major
transportation projects like the Golden Quadrilateral,
Delhi-Mumbai Freight Corridor, industrial corridors, etc. A
major airport is being planned in the heart of India, in
Nagpur.
Figure 16 The Port of Cutuco, El Salvador: Building South-South Trade
El Salvador & Central America
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
H.E. Ms Angela Patricia Figueroa Rodriguez,Executive Director, CAMTEX, El Salvador
El Salvador has emerged as the
logistics hub in the Mesoamerican
region
ØBuilt on Salvadoran territory on the Gulf of Fonseca, the new Port of Cutuco will be the largest container port serving the region between Panama and Northern Mexico
ØApprox. $200 million dredging, construction and equipment costs, financed by JICA and the GOESØScheduled to begin operations soon to serve Panamax-class vesselsØWill eventually be able to service Post-Panamax container carriers w. up to 6,000 TEU capacityØProspects for land-bridge connecting overland to Caribbean ports in less than 8 hours
30
El Salvador has thus emerged as the
logistics hub in the Mesoamerican region.
The new port in El Salvador ‘Port of La
Union’ will enable Indian exporters to reach
new markets on the Pacific coast of LAC
region. A market of 70 million people could
be accessed from this central American
country.
El Salvador offers FTZs, logistics and
service parks that support manufacturing
operations and valued added distribution
facilities. It is also the second most open
economy in the region after Chile.
The Mesoamerican Pacific Corridor will
ease the movement of goods between
Mexico and Panama, which will be a big
boost for transit trade in the country.
There are two major operations ports in El Salvador: Cutuco and La Union. The
Port of Cutuco, built on Salvadoran territory on the Gulf of Fonseca will be the
largest container port serving the region between Panama and Northern Mexico.
It will eventually be able to service Post-Panamax container carriers up to 6,000
TEU capacity. The port holds prospects for land-bridge connecting overland to
Caribbean ports in less than 8 hours.
The port of La Union is a deep sea port with capacity to receive post Panamax
boats. It is located at a short distance from the Panama Canal (1.5 days).
El Salvador is also connected by air to the whole continent with daily flights to 40
cities in 22 countries and major cities in the US.
The key advantages in investing in El Salvador are:
ØNearshore market to the USA
ØLocated in the middle of the route of Pacific Asia and the European
Union
ØMore than 40 million people in the Mesoamerican region (South Mexico
to Panama)
ØFTAs with Mexico, Panama, USA, Central America, Colombia, Dominican
Republic and Taiwan and an Association Agreement is being negotiated
with the European Union.
El Salvador would look to India for expertise in railway constructions and
systems. The Port of La Union is not in competition with the Panama Canal but
complements it. Also, the area around the Port of La Union is seeing major port
infrastructure development projects that hold several investment opportunities
for Indian players.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Source : World Competitiveness Report 2008-2009By Angela Patricia Figueroa Rodriguez, Executive Director, Camtex, El Salvador
Figure 15 Infrastructures in Latin America
Conf
eren
ce P
roce
edin
gs
Chile
El S
alv
ador
Panam
á
Guate
mala
Uru
guary
Hondura
s
Méxic
o
Colo
mbia
Arg
entina
Bra
sil
Costa
Ric
a
Ecuador
Venezu
ela
Perú
Nic
ara
gua
Para
guary
6
5
4
3
2
1
0
World average: 3.8
One of the best Infrastructure in Latin America
31
Uruguay was another country that
showcased its transit trade and logistics
facilities at the session. The country has
been described as a natural geographic and
economic “hub” at the centre of a market
inhabited by more than 238 million
consumers, with the highest per capita
income in the continent, and a GDP of $1.63
billion.
Uruguay has a diverse and extensive
communications network which adds to
the competitiveness of the financial
s e r v i c e s a n d b u s i n e s s s u p p o r t
infrastructure, and facilitates access to
core of Mercosur and other countries and
regions of the world.
The free port and airport in Montevideo is considered as a “logistic hub” for
distributing products and services to neighbouring larger markets in the region.
Importantly, the Secretariat of Mercosur is located in Montevideo.
Montevideo is the first and only free port on the South American Atlantic coast.
During their stay in the port, goods are exempt from all taxes and charges
applicable at the time of import. Also, the port is a customs exclusion zone,
wherein it is possible to contract international shipping services such as
container terminals and warehousing through private operators.
While Uruguay accounts for only 2% of the LAC GDP, it sees 64% of extra-
regional transshipments in the region. The panel said that Montevideo has the
‘Rotterdam effect’ which is about a small country catering to a large global
country.
Referring to the state of Indian logistics, the panel observed that the industry is
in dire need of efficient processes and systems, given that 40% of fruits and
vegetables produced in the country are wasted owing to limited cold chain
facilities.
The Indian logistics industry is highly fragmented, though consolidation is
expected to take place in the coming years, which will make the services
efficient and cost-effective. As of now, investment in warehouses, transport
centers, ICDs, etc., is sporadic and the “Integrated Cold Chain” is nearly non-
existent. This current state of Indian logistics industry is a
compelling opportunity for foreign investors. As such,
the country is making good progress with the major
transportation projects like the Golden Quadrilateral,
Delhi-Mumbai Freight Corridor, industrial corridors, etc. A
major airport is being planned in the heart of India, in
Nagpur.
Figure 16 The Port of Cutuco, El Salvador: Building South-South Trade
El Salvador & Central America
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
H.E. Ms Angela Patricia Figueroa Rodriguez,Executive Director, CAMTEX, El Salvador
El Salvador has emerged as the
logistics hub in the Mesoamerican
region
ØBuilt on Salvadoran territory on the Gulf of Fonseca, the new Port of Cutuco will be the largest container port serving the region between Panama and Northern Mexico
ØApprox. $200 million dredging, construction and equipment costs, financed by JICA and the GOESØScheduled to begin operations soon to serve Panamax-class vesselsØWill eventually be able to service Post-Panamax container carriers w. up to 6,000 TEU capacityØProspects for land-bridge connecting overland to Caribbean ports in less than 8 hours
33
contribute more to the GDP. There is huge potential for cooperation and partnerships in the IT/ITeS sector in LAC region.
The long-term trend shows that India will hold on to its position as the leading provider of talent at lowest cost. Besides, demographic trend shows that the working population is shrinking in key developed countries like Japan, Italy and the US. This will help regions like LAC and India to take charge of the industry globally. Besides, social and environmental trends show that there is an increase in Internet and mobile connectivity for transforming people’s lives and in creating need for resource efficient solutions.
The global sourcing industry in India is likely to reach $175 billion, while the domestic outsourcing industry is expected to reach $50 billion by 2020. The key factors aiding this growth are:
ØLarge pool of highly-skilled, English-speaking IT workforce.
ØCost advantage – infrastructure & manpower costs
ØSoftware development
ØStrong tertiary education
ØEnabling government support and policies
ØExpertise in new technologies
ØReasonable technical innovations
ØHints of reverse brain drain.
LAC countries are considering India as a likely destination for IT/ITeS support because the global crisis and the consequent local resource and credit crunch have induced LAC importers to look towards less expensive sources such as India. The crisis thus opened a new window of opportunity for Indian companies to create long
Mr. Ninad Karpe, CEO and Managing Director, Aptech Ltd, India; Mr. Fabio Fischer de Aguiar, Board Vice President, TCI BPO S/A, Brazil; Mr. Ameet Nivsarkar, Vice President - Global Trade, Development, NASSCOM, India; Mr. Francisco Cabrera, Minister of Economic Development, Government of Buenos Aires, Argentina at Session on India & LAC: Sectoral Synergies in IT and ITeS
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
32
ProceedingsInformation Technology (IT) has indeed played a key role in putting India on the global map. Percentage GDP share of the Indian IT sector rose from 1.20% in the year 1996–97 to an estimated 5.80% in 2008–09. Even during the recent global economic slowdown, the IT-BPO exports industry displayed resilience to grow by 5.5% in 2010.
India continues to take the centre-stage in the IT/ITeS (Information Enabled Services) sector with 51% share of the total sourcing market. The industry accounts for 25% of India’s exports and 10.5% of services revenues.
With e-Governance projects gaining traction, the domestic IT market is expected to grow at a rapid pace. Government IT spending was estimated at Rs 150 billion in 2009. However, the industry continues to be an export led sector (see Figure 17), with foreign providers accounting for over 30% of the total market.
The BPO industry continues to be the fastest growing segment at 22% and IT services is expected to grow by 12%, as per various estimates.
Presently the Indian IT/ITeS industry directly employs around 2.3 million professionals and 70% more workforces will be added to this within 18-30 years.
US still dominates the IT-BPO global market with 61% global share, followed by the UK with 18% and the EU, excluding UK, with 12%. But a higher growth rate is seen in the non-traditional markets rather than the tradition pockets of IT-BPO market.
IT-BPO has already taken deep roots in the banking and financial sectors, and is foraying into other sectors like healthcare and utilities services.
The panel observed that government and private sector should jointly invest in infrastructure areas and bridge the educational gap. At present, 90% of the Indian IT-BPO business is happening in six major cities. That situation needs to change as the business has to spread to the other 43, tier 2 & 3 cities, so that the segment can
Session Chair Mr Ameet Nivsarkar, Vice-President, Global Trade
Development, NASSCOM
Panel Mr Fabio Fischer de Aguiar, Board Vice-President, TCI
BPO S/A, Brazil
Mr Francisco Cabrera, Minister of Economic
Development, Government of Buenos Aires, Argentina
Mr Ninad Karpe, MD & CEO, Aptech
SECTORAL SYNERGIES IN IT & ITeS
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Source: Nasscom
Figure 17 Exports (as percentage) of Indian IT-BPO market
Domestic
Exports
31.740.9
47.5 50.1
16.2
22.0
21.923.0
FY2007 FY2008 FY2009 FY2010E
USD billion
47.9
62.9
79.473.1
33
contribute more to the GDP. There is huge potential for cooperation and partnerships in the IT/ITeS sector in LAC region.
The long-term trend shows that India will hold on to its position as the leading provider of talent at lowest cost. Besides, demographic trend shows that the working population is shrinking in key developed countries like Japan, Italy and the US. This will help regions like LAC and India to take charge of the industry globally. Besides, social and environmental trends show that there is an increase in Internet and mobile connectivity for transforming people’s lives and in creating need for resource efficient solutions.
The global sourcing industry in India is likely to reach $175 billion, while the domestic outsourcing industry is expected to reach $50 billion by 2020. The key factors aiding this growth are:
ØLarge pool of highly-skilled, English-speaking IT workforce.
ØCost advantage – infrastructure & manpower costs
ØSoftware development
ØStrong tertiary education
ØEnabling government support and policies
ØExpertise in new technologies
ØReasonable technical innovations
ØHints of reverse brain drain.
LAC countries are considering India as a likely destination for IT/ITeS support because the global crisis and the consequent local resource and credit crunch have induced LAC importers to look towards less expensive sources such as India. The crisis thus opened a new window of opportunity for Indian companies to create long
Mr. Ninad Karpe, CEO and Managing Director, Aptech Ltd, India; Mr. Fabio Fischer de Aguiar, Board Vice President, TCI BPO S/A, Brazil; Mr. Ameet Nivsarkar, Vice President - Global Trade, Development, NASSCOM, India; Mr. Francisco Cabrera, Minister of Economic Development, Government of Buenos Aires, Argentina at Session on India & LAC: Sectoral Synergies in IT and ITeS
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
32
ProceedingsInformation Technology (IT) has indeed played a key role in putting India on the global map. Percentage GDP share of the Indian IT sector rose from 1.20% in the year 1996–97 to an estimated 5.80% in 2008–09. Even during the recent global economic slowdown, the IT-BPO exports industry displayed resilience to grow by 5.5% in 2010.
India continues to take the centre-stage in the IT/ITeS (Information Enabled Services) sector with 51% share of the total sourcing market. The industry accounts for 25% of India’s exports and 10.5% of services revenues.
With e-Governance projects gaining traction, the domestic IT market is expected to grow at a rapid pace. Government IT spending was estimated at Rs 150 billion in 2009. However, the industry continues to be an export led sector (see Figure 17), with foreign providers accounting for over 30% of the total market.
The BPO industry continues to be the fastest growing segment at 22% and IT services is expected to grow by 12%, as per various estimates.
Presently the Indian IT/ITeS industry directly employs around 2.3 million professionals and 70% more workforces will be added to this within 18-30 years.
US still dominates the IT-BPO global market with 61% global share, followed by the UK with 18% and the EU, excluding UK, with 12%. But a higher growth rate is seen in the non-traditional markets rather than the tradition pockets of IT-BPO market.
IT-BPO has already taken deep roots in the banking and financial sectors, and is foraying into other sectors like healthcare and utilities services.
The panel observed that government and private sector should jointly invest in infrastructure areas and bridge the educational gap. At present, 90% of the Indian IT-BPO business is happening in six major cities. That situation needs to change as the business has to spread to the other 43, tier 2 & 3 cities, so that the segment can
Session Chair Mr Ameet Nivsarkar, Vice-President, Global Trade
Development, NASSCOM
Panel Mr Fabio Fischer de Aguiar, Board Vice-President, TCI
BPO S/A, Brazil
Mr Francisco Cabrera, Minister of Economic
Development, Government of Buenos Aires, Argentina
Mr Ninad Karpe, MD & CEO, Aptech
SECTORAL SYNERGIES IN IT & ITeS
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
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roce
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gs
Source: Nasscom
Figure 17 Exports (as percentage) of Indian IT-BPO market
Domestic
Exports
31.740.9
47.5 50.1
16.2
22.0
21.923.0
FY2007 FY2008 FY2009 FY2010E
USD billion
47.9
62.9
79.473.1
35
Ø simplify setting up of Development Centers (DCs)
Ø
Ø reduction of withholding taxes
Ø
The panel recommended three key steps to boost the India-LAC IT/ITeS partnership:
ØInvestment in technical education & skills
ØStrengthening of markets
ØInformation sharing & intelligence.
In terms of countrys-specific engagement in the IT-BPO sector, Brazil could be a key partner for India. Business relations between India and Brazil are on the upswing as during 2002- 2008 bilateral trade registered a growth of 25% (CAGR) and bilateral investments grew at 12% (CAGR).
Like India, Brazil is also improving its position in the IT-BPO industry and has overtaken China in many aspects. However, among the emerging economies, India is still the leader in the BPO industry. Brazil offers huge investment opportunity to Indian companies as the county is the gateway to LAC region. Besides, Brazil has shown consistency in the GDP growth for the past few years. Figure 19 shows the rising level of India-Brazil bilateral trade and investment ties.
In terms of IT-BPO competitiveness, Figure 20 shows the relative strengths of India and Brazil.
Buenos Aires provides compel l ing opportunities for Indian investments in the IT-BPO sector. The city offers excellent bilingual human capital with advanced skills, and educational coverage comparable with many OECD countries. In addition, the city boasts of advanced in f rast ructure , th ree international airports, and excellent public utility network.
Infrastructure issues:
Improved connectivity.
Taxation issues:
Totalisation treaty between nations
Source: CISCO, Presentation :India & LACsectoral synergies in IT & ITeSBy Mr Ninad Karpe, MD & CEO, Aptech
Latam Skill Shortage in Networking Field
Demand for Latin American professionals
with Internetworking skills will outpace
supply by nearly 27 percent by 2010:
ØBrazil: shortage of 44,000
ØMexico: shortage of 28,000
Source: Unctad, Secex, Indian Department of Commerce, Jai Group Analysis, Jai Group
Figure 19 India-Brazil bilateral trade and investment flows (2002 vs 2008)
Brazil and India are coming together ...
BUSINESS IN THE INDIA-BRAZIL CORRIDOR
USD MILLION (FOB BASIS IN THE CASE OF TRADE)
Bilateral Investments Bilateral Trade
183
430
2002 2007
CAGR*=19%
2002 2008
4685
1227
CAGR*=25%
573
654
1102
3563
Brazil to India
India to Brazil
Major Indo-Brazilian Joint Ventures
* Compound annual growth rate
All joint ventures have
happened over the last
5 years
• Steel:
• Buses:
Gerdau and Kalyani
Tata and Marcopolo
Oil:
Software:
Petrobras and OMGC
Tata and TBA
Rsl-apt 27/04/2010 12:10
Source: Mackinsey Global Institute, Jai Group
Figure 20 ITO-BPO Competitiveness
A recent study suggests India leads the BPO servicesbut Brazil is also competitive
BPO BUSINESS RANKING
SCLE OF 1.0 TO 5.0 WHERE 1 IS THE MOST ATTRACTIVE AND 5 IS THE LEAST ATTRACTIVE
Rsl-apt 27/04/2010 12:10
Simple Average Shared Services Exports Size of Market for IT and BPI Employee in IT services
India
Brazil
China
Poland
Russia
Hungary
Malaysia
Chile
Mexico
Czech
2.0
3.2
3.2
4.0
4.0
4.2
4.3
4.5
4.5
4.7
2.0
3.5
3.0
4.0
3.5
6.0
6.0
4.5
4.0
6.0
1.0
3.0
4.0
4.0
4.0
3.0
4.0
4.0
6.0
4.0
3.0
3.0
2.5
4.0
4.5
4.5
4.0
6.0
4.5
6.0
Conf
eren
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roce
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th4 CII India-Latin America and Caribbean (LAC) Conclave
34
lasting partnerships. At the same time, the Latin American market has undergone a paradigm shift coming out of its boom and bust cycles and volatility. It is now set on a sustainable course of stability and growth.
Over ten leading Indian IT firms are already operating in the LAC or are planning to start operations in the coming year. These firms have employed over 10,000 employees in the LAC region.
Indian investments in the LAC IT-BPO sector is governed by:
ØThe region’s geographical proximity with North America, India’s major market.
ØAbundance of trainable human resources
ØCost structure that is comparable to India
ØMulti lingual capabilities
ØSpanish
ØPortuguese
ØDecent infrastructure
ØGDC for serving European markets
ØGood markets for some competitive home grown software products (Infy – Finnacle,i-Flex).
Stepping up bilateral engagements in this sector will call for the following:
Ø
(i) Invest in increasing local operations; (ii) create local ‘brand’ that customers can associate with; (iii) emphasis on having as many locals fill in very many positions.
Ø (i) seamless processing of business visa and Work permits;(ii) remove rigid labour laws that lead to increase on cost of employee; (iii) resourcing – finding right people in new territory; (iv) managing training & development costs.
Demands for Latin American professionals with Internetworking skills will outpace supply by nearly 27% by 2010. Brazil is seeing a shortage of 44,000 IT professionals and Mexico, 28,000 professionals.
Customisation of end products & services as per needs of LAC customers:
Streamlining of HR issues:
H.E. Mr Hans Dannenberg Castellanos,Ambassador of the Dominican Republic in India
India and the LAC countries were
heavily dependent on the US and
European countries for the supply of
medical equipment. Joint initiatives in
this area will help both regions
Conf
eren
ce P
roce
edin
gsth4 CII India-Latin America and Caribbean (LAC) Conclave
Figure 18 India and LAC - Partnership
Some concerns that need to be addressed
Indian presence in LAC
• More then 10 leading firms (IT) already have a presence in LAC or are planning to start operations in the coming year.
• Indian IT companies are employing over 10000 employees in the LAC region.• Leveraging local market as well as 12/12 business model
How can Indian IT work with LAC ?
• Its proximity with North America, India’s major market. • Very good near shore option • Abundance of trainable human resources • Cost structure that is comparable to India• Multi lingual capabilities
– Spanish – Portuguese
• Decent infrastructure • GDC for serving European markets• Good markets for some competitive home grown software products (Infy –
Finnacle, i-Flex)
Areas of Partnership for Indian Firms with LAC Companies
• Customize our end products & services as per needs of LAC customers • Invest in increasing local operations • Create local ‘brand’ that customers can associate with • Emphasis on having as many locals fill in very many positions
Source : NASSCOM
HR issues
• Business visa & Work permits – have cumbersome & time consuming process. In some cases it takes 2-3 months of processing time
• Rigid labour laws that lead to increase on cost of employee • Resourcing – finding right people in new territory • Training & Development costs
Infrastructure issues
• Simplifying Development Center (DC) set up.
Connectivity
• Coverage across continent • Expensive • Time consuming • Frequent power and water supply issues
Taxation issues
• Withholding taxes• Totalisation treaty between nations
Cultural issues
35
Ø simplify setting up of Development Centers (DCs)
Ø
Ø reduction of withholding taxes
Ø
The panel recommended three key steps to boost the India-LAC IT/ITeS partnership:
ØInvestment in technical education & skills
ØStrengthening of markets
ØInformation sharing & intelligence.
In terms of countrys-specific engagement in the IT-BPO sector, Brazil could be a key partner for India. Business relations between India and Brazil are on the upswing as during 2002- 2008 bilateral trade registered a growth of 25% (CAGR) and bilateral investments grew at 12% (CAGR).
Like India, Brazil is also improving its position in the IT-BPO industry and has overtaken China in many aspects. However, among the emerging economies, India is still the leader in the BPO industry. Brazil offers huge investment opportunity to Indian companies as the county is the gateway to LAC region. Besides, Brazil has shown consistency in the GDP growth for the past few years. Figure 19 shows the rising level of India-Brazil bilateral trade and investment ties.
In terms of IT-BPO competitiveness, Figure 20 shows the relative strengths of India and Brazil.
Buenos Aires provides compel l ing opportunities for Indian investments in the IT-BPO sector. The city offers excellent bilingual human capital with advanced skills, and educational coverage comparable with many OECD countries. In addition, the city boasts of advanced in f rast ructure , th ree international airports, and excellent public utility network.
Infrastructure issues:
Improved connectivity.
Taxation issues:
Totalisation treaty between nations
Source: CISCO, Presentation :India & LACsectoral synergies in IT & ITeSBy Mr Ninad Karpe, MD & CEO, Aptech
Latam Skill Shortage in Networking Field
Demand for Latin American professionals
with Internetworking skills will outpace
supply by nearly 27 percent by 2010:
ØBrazil: shortage of 44,000
ØMexico: shortage of 28,000
Source: Unctad, Secex, Indian Department of Commerce, Jai Group Analysis, Jai Group
Figure 19 India-Brazil bilateral trade and investment flows (2002 vs 2008)
Brazil and India are coming together ...
BUSINESS IN THE INDIA-BRAZIL CORRIDOR
USD MILLION (FOB BASIS IN THE CASE OF TRADE)
Bilateral Investments Bilateral Trade
183
430
2002 2007
CAGR*=19%
2002 2008
4685
1227
CAGR*=25%
573
654
1102
3563
Brazil to India
India to Brazil
Major Indo-Brazilian Joint Ventures
* Compound annual growth rate
All joint ventures have
happened over the last
5 years
• Steel:
• Buses:
Gerdau and Kalyani
Tata and Marcopolo
Oil:
Software:
Petrobras and OMGC
Tata and TBA
Rsl-apt 27/04/2010 12:10
Source: Mackinsey Global Institute, Jai Group
Figure 20 ITO-BPO Competitiveness
A recent study suggests India leads the BPO servicesbut Brazil is also competitive
BPO BUSINESS RANKING
SCLE OF 1.0 TO 5.0 WHERE 1 IS THE MOST ATTRACTIVE AND 5 IS THE LEAST ATTRACTIVE
Rsl-apt 27/04/2010 12:10
Simple Average Shared Services Exports Size of Market for IT and BPI Employee in IT services
India
Brazil
China
Poland
Russia
Hungary
Malaysia
Chile
Mexico
Czech
2.0
3.2
3.2
4.0
4.0
4.2
4.3
4.5
4.5
4.7
2.0
3.5
3.0
4.0
3.5
6.0
6.0
4.5
4.0
6.0
1.0
3.0
4.0
4.0
4.0
3.0
4.0
4.0
6.0
4.0
3.0
3.0
2.5
4.0
4.5
4.5
4.0
6.0
4.5
6.0
Conf
eren
ce P
roce
edin
gs
th4 CII India-Latin America and Caribbean (LAC) Conclave
34
lasting partnerships. At the same time, the Latin American market has undergone a paradigm shift coming out of its boom and bust cycles and volatility. It is now set on a sustainable course of stability and growth.
Over ten leading Indian IT firms are already operating in the LAC or are planning to start operations in the coming year. These firms have employed over 10,000 employees in the LAC region.
Indian investments in the LAC IT-BPO sector is governed by:
ØThe region’s geographical proximity with North America, India’s major market.
ØAbundance of trainable human resources
ØCost structure that is comparable to India
ØMulti lingual capabilities
ØSpanish
ØPortuguese
ØDecent infrastructure
ØGDC for serving European markets
ØGood markets for some competitive home grown software products (Infy – Finnacle,i-Flex).
Stepping up bilateral engagements in this sector will call for the following:
Ø
(i) Invest in increasing local operations; (ii) create local ‘brand’ that customers can associate with; (iii) emphasis on having as many locals fill in very many positions.
Ø (i) seamless processing of business visa and Work permits;(ii) remove rigid labour laws that lead to increase on cost of employee; (iii) resourcing – finding right people in new territory; (iv) managing training & development costs.
Demands for Latin American professionals with Internetworking skills will outpace supply by nearly 27% by 2010. Brazil is seeing a shortage of 44,000 IT professionals and Mexico, 28,000 professionals.
Customisation of end products & services as per needs of LAC customers:
Streamlining of HR issues:
H.E. Mr Hans Dannenberg Castellanos,Ambassador of the Dominican Republic in India
India and the LAC countries were
heavily dependent on the US and
European countries for the supply of
medical equipment. Joint initiatives in
this area will help both regions
Conf
eren
ce P
roce
edin
gs
th4 CII India-Latin America and Caribbean (LAC) Conclave
Figure 18 India and LAC - Partnership
Some concerns that need to be addressed
Indian presence in LAC
• More then 10 leading firms (IT) already have a presence in LAC or are planning to start operations in the coming year.
• Indian IT companies are employing over 10000 employees in the LAC region.• Leveraging local market as well as 12/12 business model
How can Indian IT work with LAC ?
• Its proximity with North America, India’s major market. • Very good near shore option • Abundance of trainable human resources • Cost structure that is comparable to India• Multi lingual capabilities
– Spanish – Portuguese
• Decent infrastructure • GDC for serving European markets• Good markets for some competitive home grown software products (Infy –
Finnacle, i-Flex)
Areas of Partnership for Indian Firms with LAC Companies
• Customize our end products & services as per needs of LAC customers • Invest in increasing local operations • Create local ‘brand’ that customers can associate with • Emphasis on having as many locals fill in very many positions
Source : NASSCOM
HR issues
• Business visa & Work permits – have cumbersome & time consuming process. In some cases it takes 2-3 months of processing time
• Rigid labour laws that lead to increase on cost of employee • Resourcing – finding right people in new territory • Training & Development costs
Infrastructure issues
• Simplifying Development Center (DC) set up.
Connectivity
• Coverage across continent • Expensive • Time consuming • Frequent power and water supply issues
Taxation issues
• Withholding taxes• Totalisation treaty between nations
Cultural issues
36
Proceedings
A growing middle class has a direct bearing on the overall demand for medicines.
India and the LAC countries have seen a significant expansion of the middle class
leading to a rapid increase in demand for generic drugs. But there are still
challenges to be overcome, such as, poorly funded healthcare institutions, talent
loss, archaic regulatory systems, and limited innovations.
The panel noted that China is a fine example of how the government supports
the private pharma companies to build their competitiveness in the domestic
and global markets. This is particularly true of Chinese medical devices
manufacturers.
The Indian pharma market is projected to grow at 12-14% in the next three years
owing to:
ØHigh disease Prevalence: (i) fastest growing diabetic & hypertensive
population; (ii) high incidence of oncology and other chronic ailments
ØIncreased healthcare access
ØImproving access and growth rates in rural India
ØDoubling of geriatric population in next 15 years
ØIncreasing capacity to spend
ØHuge middle class with vigorous buying capacity
ØOpening up of reimbursement avenues.
It was cited that both India and the LAC countries are heavily dependent on the
US and European countries for the supply of medical equipment. Joint initiatives
in this area will help both regions. India has made strident progress in the area of
medical equipment and devices in recent years. For instance, India produces
coronary stents at a fifth of what it costs in the US. This is particularly important
Session Chair Mr J P Dutta, Chief Operating Officer, Sahajanand
Medical Technologies Pvt Ltd
Panel Mr Miguel Angel Ramirez Ramos, Ambassador of Cuba
in India
Mr Joaquin Benitez, CEO, World Pharma, Mexico
Mr Walter Jose Lafratta, Director, WJL Consultorio de
Niegocios International Brazil
SECTORAL SYNERGIES IN PHARMA,
HEALTHCARE & MEDICAL EQUIPMENT
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
37
since an increasing percentage of the Indian population is getting exposed to
coronary diseases.
The cost of development of modern pharma and medical devices in developed
countries are beyond the reach of majority of the population of India and LAC.
India was earlier 100% dependent for critical cardiac care (angioplasty) related
technologies and supply and the cost of the treatment per patient was in the
range of $8,000-10,000. Today, coronary stent developed in India and being
exported to 25 countries and the cost per stent has come down to $2,000. This
independence saved and generated foreign currency to the tune of $325 million
in the span of 10 years with just one product range.
India also has the potential of emerging as a hub of clinical trials, whereas LAC
could be drawn into life sciences research fold where India has a good track
record.
It was cited that LAC could import the bulk of its APIs, which serve as raw
materials for drugs and pharmaceuticals, from India, and recommended the
establishment of large-scale inter-continental multi-centres for clinical trials.
Indian herbal remedies could also find ready markets in the LAC region, whereas
Indian medical devices would also find takers in the LAC markets.
Mr. Walter Jose Lafratta, Director, WJL Consultoria de Negocios, International, Brazil; Mr. J P Dutta, Chief Operating Officer, Sahajanand Medical Technologies Pvt Ltd, India; H.E. Mr. Miguel Angel Ramirez Ramos, Ambassador of Cuba in India; Mr. Joaquin Benitez, Chief Executive Officer, World Pharma, Mexico; at Session on India & LAC: Sectoral Synergies in Pharma, Healthcare and Medical Equipment
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
36
Proceedings
A growing middle class has a direct bearing on the overall demand for medicines.
India and the LAC countries have seen a significant expansion of the middle class
leading to a rapid increase in demand for generic drugs. But there are still
challenges to be overcome, such as, poorly funded healthcare institutions, talent
loss, archaic regulatory systems, and limited innovations.
The panel noted that China is a fine example of how the government supports
the private pharma companies to build their competitiveness in the domestic
and global markets. This is particularly true of Chinese medical devices
manufacturers.
The Indian pharma market is projected to grow at 12-14% in the next three years
owing to:
ØHigh disease Prevalence: (i) fastest growing diabetic & hypertensive
population; (ii) high incidence of oncology and other chronic ailments
ØIncreased healthcare access
ØImproving access and growth rates in rural India
ØDoubling of geriatric population in next 15 years
ØIncreasing capacity to spend
ØHuge middle class with vigorous buying capacity
ØOpening up of reimbursement avenues.
It was cited that both India and the LAC countries are heavily dependent on the
US and European countries for the supply of medical equipment. Joint initiatives
in this area will help both regions. India has made strident progress in the area of
medical equipment and devices in recent years. For instance, India produces
coronary stents at a fifth of what it costs in the US. This is particularly important
Session Chair Mr J P Dutta, Chief Operating Officer, Sahajanand
Medical Technologies Pvt Ltd
Panel Mr Miguel Angel Ramirez Ramos, Ambassador of Cuba
in India
Mr Joaquin Benitez, CEO, World Pharma, Mexico
Mr Walter Jose Lafratta, Director, WJL Consultorio de
Niegocios International Brazil
SECTORAL SYNERGIES IN PHARMA,
HEALTHCARE & MEDICAL EQUIPMENT
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
37
since an increasing percentage of the Indian population is getting exposed to
coronary diseases.
The cost of development of modern pharma and medical devices in developed
countries are beyond the reach of majority of the population of India and LAC.
India was earlier 100% dependent for critical cardiac care (angioplasty) related
technologies and supply and the cost of the treatment per patient was in the
range of $8,000-10,000. Today, coronary stent developed in India and being
exported to 25 countries and the cost per stent has come down to $2,000. This
independence saved and generated foreign currency to the tune of $325 million
in the span of 10 years with just one product range.
India also has the potential of emerging as a hub of clinical trials, whereas LAC
could be drawn into life sciences research fold where India has a good track
record.
It was cited that LAC could import the bulk of its APIs, which serve as raw
materials for drugs and pharmaceuticals, from India, and recommended the
establishment of large-scale inter-continental multi-centres for clinical trials.
Indian herbal remedies could also find ready markets in the LAC region, whereas
Indian medical devices would also find takers in the LAC markets.
Mr. Walter Jose Lafratta, Director, WJL Consultoria de Negocios, International, Brazil; Mr. J P Dutta, Chief Operating Officer, Sahajanand Medical Technologies Pvt Ltd, India; H.E. Mr. Miguel Angel Ramirez Ramos, Ambassador of Cuba in India; Mr. Joaquin Benitez, Chief Executive Officer, World Pharma, Mexico; at Session on India & LAC: Sectoral Synergies in Pharma, Healthcare and Medical Equipment
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
38
Cuba’s healthcare achievements came up for discussion, wherein it was stated
that the central American country has health standards that are comparable with
the advanced countries.
Cuba launched an immunisation programme in 1992 that extended to 2006. This
included 13 vaccinations which led to the eliminations of diseases like meningitis
among children. The West Havana Pole in Cuba which is linked to 52 specialised
institutes has led the way in pharma and biotech research.
West Havana Pole has developed 33 vaccines against infectious diseases, 33
oncological products, and 18 cardiovascular products. The development of
synthetic vaccines out of carbohydrates was described as a “sweet victory”.
Cuba has also developed a vaccine to fight head and neck cancer, which has
found its way even into the US market.
Cuba could play a key role in providing affordable source of advanced science to
transform generic producing entities into innovative biotech companies. The
interaction of Cuban biotech research centres with Biocon, Serum Institute,
Panacea, CIPLA, Keepharma, USV, among others is a clear indication of this
trend.
Cuban research centers and biotech companies have a lot to offer Indian
companies in the field of generic engineered protein erythropoietin, including
biotechnology products; hepatitis B and meningitis B vaccines; a skin growth
factor; interferon; melagenina, ateromixol (cholesterolemic product),
thrombosis and heart attack medicines; and AIDS treatments, among others.
Cuba has a huge pipeline ready to share with Indian companies, particularly in
high advanced area, like monoclonal antibodies, recombinant vaccines,
therapeutic cancer vaccines and others.
Cuban pharma export sales totaled $340 million in 2008, and the figure is
estimated to reach $500 million by 2012. On the other hand, Cuba, with its strong
health system, its health indicators and immunisation programme, as well as big
imports for national health procurement, is an important market for Indian
generics and active pharmaceutical ingredients.
Cuban imports are not only meant for the Cuban health system, but also for the
health programs that our country carries out in many Third World nations, like
Haiti, therefore its volume is significantly bigger.
The growing role of ALBA (Alliance of Bolivarian States of the Americas), and the
leading role that the Cuban regulatory agency CECMED, plays in the new ALBA
regulatory body is a further advantage for registrations of new medications in the
region. Those products that have successfully registered in Cuba will have an
easier entry into the markets of 13 LAC countries, including Venezuela, Ecuador,
Nicaragua and others.
As of now, Indian pharma products reach Cuba via third countries. There is scope
for establishing direct bilateral trade in drugs & pharmaceuticals.
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
39
The panel noted that India-LAC pharma
trade has grown from $268 million in 2006-
07 to $331 million in 2008-09. In 13 years,
from 1970, India has grown to become a
knowledge base for the global pharma
industry.
Mexico is another key LAC destination for
Indian medical devices and pharma
companies. In Mexico, pharma is a $11-
billion industry, of which $4.4 billion worth
of medicines goes for social security (in
this, $1.7 billion is accounted for by APIs, of
which 40% comes from India), and $6.6
billion comes from MNCs.
Mexico has the practice of self-medication
which fuels demand for medicines, but the
government has now banned sale of
antibiotics over the counter. Mexico is the
15th largest medicine manufacturer but
imports 90% of APIs. Dr Reddy’s Labs has
leveraged this opportunity.
The Mexican Social Security Institute
(IMSS) is the single largest buyer of
finished dosage from pharmaceutical
companies, through regular public tenders
for finished dosage form pharmaceuticals,
held over the year. Over 95% of medicines
procured in Mexico ought to be ‘Made in
Mexico’. Hence it would help Indian pharma
firms to tie-up with local firms in Mexico to
tap this market. Large retail firms like Wal-
Mart are also in the loop for distribution of
medicines, as are medical representatives
who interact with doctors. Mexico has a
sound regulatory environment and plant
visits from USFDA are periodically
followed.
As regards Brazil, the country spends $35
billion on public health programmes
covering a relatively small population of 190
million people. Cost of capital in Brazil is
very high, so Indian investments in the
sector could find ready takers.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Exim Bank of India, Projects Supported in LAC Region
JV Supported in LAC Region
WOS Supported in LAC Region
Success Stories – Supply of Trucks to Honduras Armed Forces
A state-of-the-art fuel ethanol plant in Colombia, designed, supplied and commissioned by Praj Industries Ltd., Pune, which has an operating subsidiary in Colombia having sizeable market share in ethanol based projects in the region.
Exim Bank supported the JV formed by the Strides Arcolabs Ltd. and the Brazilian drugs producer Cellofarm Ltd., for production of generic drugs. The aim of the plant is to produce drugs towards the treatment of diabetes, cardiology problems and AIDS.
A subsidiary of Vijai Electricals Ltd, was established with the support of Exim Bank, in the North eastern part of Brazil. The main objective of this plant is not only to promote energy efficient transformers that improvises the quality of the power system Brazilian grid but will also aim to produce a carbon free environment.
These vehicles will augment the transport resources of HAF to carry out key poverty eradication programmes and for other humanitarian purposes. Contract financed by Exim Bank under a Line of Credit extended to Govt. of Honduras.
38
Cuba’s healthcare achievements came up for discussion, wherein it was stated
that the central American country has health standards that are comparable with
the advanced countries.
Cuba launched an immunisation programme in 1992 that extended to 2006. This
included 13 vaccinations which led to the eliminations of diseases like meningitis
among children. The West Havana Pole in Cuba which is linked to 52 specialised
institutes has led the way in pharma and biotech research.
West Havana Pole has developed 33 vaccines against infectious diseases, 33
oncological products, and 18 cardiovascular products. The development of
synthetic vaccines out of carbohydrates was described as a “sweet victory”.
Cuba has also developed a vaccine to fight head and neck cancer, which has
found its way even into the US market.
Cuba could play a key role in providing affordable source of advanced science to
transform generic producing entities into innovative biotech companies. The
interaction of Cuban biotech research centres with Biocon, Serum Institute,
Panacea, CIPLA, Keepharma, USV, among others is a clear indication of this
trend.
Cuban research centers and biotech companies have a lot to offer Indian
companies in the field of generic engineered protein erythropoietin, including
biotechnology products; hepatitis B and meningitis B vaccines; a skin growth
factor; interferon; melagenina, ateromixol (cholesterolemic product),
thrombosis and heart attack medicines; and AIDS treatments, among others.
Cuba has a huge pipeline ready to share with Indian companies, particularly in
high advanced area, like monoclonal antibodies, recombinant vaccines,
therapeutic cancer vaccines and others.
Cuban pharma export sales totaled $340 million in 2008, and the figure is
estimated to reach $500 million by 2012. On the other hand, Cuba, with its strong
health system, its health indicators and immunisation programme, as well as big
imports for national health procurement, is an important market for Indian
generics and active pharmaceutical ingredients.
Cuban imports are not only meant for the Cuban health system, but also for the
health programs that our country carries out in many Third World nations, like
Haiti, therefore its volume is significantly bigger.
The growing role of ALBA (Alliance of Bolivarian States of the Americas), and the
leading role that the Cuban regulatory agency CECMED, plays in the new ALBA
regulatory body is a further advantage for registrations of new medications in the
region. Those products that have successfully registered in Cuba will have an
easier entry into the markets of 13 LAC countries, including Venezuela, Ecuador,
Nicaragua and others.
As of now, Indian pharma products reach Cuba via third countries. There is scope
for establishing direct bilateral trade in drugs & pharmaceuticals.
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
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roce
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39
The panel noted that India-LAC pharma
trade has grown from $268 million in 2006-
07 to $331 million in 2008-09. In 13 years,
from 1970, India has grown to become a
knowledge base for the global pharma
industry.
Mexico is another key LAC destination for
Indian medical devices and pharma
companies. In Mexico, pharma is a $11-
billion industry, of which $4.4 billion worth
of medicines goes for social security (in
this, $1.7 billion is accounted for by APIs, of
which 40% comes from India), and $6.6
billion comes from MNCs.
Mexico has the practice of self-medication
which fuels demand for medicines, but the
government has now banned sale of
antibiotics over the counter. Mexico is the
15th largest medicine manufacturer but
imports 90% of APIs. Dr Reddy’s Labs has
leveraged this opportunity.
The Mexican Social Security Institute
(IMSS) is the single largest buyer of
finished dosage from pharmaceutical
companies, through regular public tenders
for finished dosage form pharmaceuticals,
held over the year. Over 95% of medicines
procured in Mexico ought to be ‘Made in
Mexico’. Hence it would help Indian pharma
firms to tie-up with local firms in Mexico to
tap this market. Large retail firms like Wal-
Mart are also in the loop for distribution of
medicines, as are medical representatives
who interact with doctors. Mexico has a
sound regulatory environment and plant
visits from USFDA are periodically
followed.
As regards Brazil, the country spends $35
billion on public health programmes
covering a relatively small population of 190
million people. Cost of capital in Brazil is
very high, so Indian investments in the
sector could find ready takers.
th4 CII India-Latin America and Caribbean (LAC) Conclave
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Exim Bank of India, Projects Supported in LAC Region
JV Supported in LAC Region
WOS Supported in LAC Region
Success Stories – Supply of Trucks to Honduras Armed Forces
A state-of-the-art fuel ethanol plant in Colombia, designed, supplied and commissioned by Praj Industries Ltd., Pune, which has an operating subsidiary in Colombia having sizeable market share in ethanol based projects in the region.
Exim Bank supported the JV formed by the Strides Arcolabs Ltd. and the Brazilian drugs producer Cellofarm Ltd., for production of generic drugs. The aim of the plant is to produce drugs towards the treatment of diabetes, cardiology problems and AIDS.
A subsidiary of Vijai Electricals Ltd, was established with the support of Exim Bank, in the North eastern part of Brazil. The main objective of this plant is not only to promote energy efficient transformers that improvises the quality of the power system Brazilian grid but will also aim to produce a carbon free environment.
These vehicles will augment the transport resources of HAF to carry out key poverty eradication programmes and for other humanitarian purposes. Contract financed by Exim Bank under a Line of Credit extended to Govt. of Honduras.
41
Exim Bank’s partners in the LAC region are:
ØCABEI, Honduras
ØCaribbean Association of Industry & Commerce, Trinidad & Tobago
ØAndean Development Corporation (CAF)
ØBanco National de Comercio Exterior, Mexico
ØBanco de Inversion Y Comercio Exterior, Argentina
ØBanco Mercantil, Venezuela.
Among the key project financing entities in LAC, the CRUSA Foundation for
Cooperation, Costa Rica, merits special mention. CRUSA was born as a model of
cooperation through public-private partnerships in 1996. At present, CRUSA is
involved in 223 projects in education, 91 projects in science and technology, 70
projects in the environment and 94 projects in strategic capacity.
CRUSA is focusing upon climate change, education, use of readily available
communication technologies in education and entrepreneurship, renewable
energies and efficient use of energy and biotechnology.
Of key importance is CAF, a multilateral financial institution that mobilises
resources from international markets to Latin America to provide multiple
banking services to both public and private clients of its shareholder countries.
Its main focus is sustainable economic development and regional integration.
Mr. Michael Penfold, Associate Director, Vice Presidency, for Development & Public Policy, Corporacion Andina de Fomento (CAF), Venezuela; Mr. Camilo Acosta, Senior Programme Officer for Science and Technology, CRUSA Foundation for Cooperation, Costa Rica; Mr. Prabhakar Dalal, Executive Director, EXIM Bank, India; Mr. Adam Stepan, Managing Director, NLP Consultants Inc., Brazil conducting a Session on Catalyzing Project Partnerships through Financial Mechanisms
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
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40
ThemeFinancing export and import of goods and services and execution of projects plays a
catalytic role in enhancing two-way trade and investments and building long-term
relationships between the regions. Institutions like EXIM Bank and Ministry of
Commerce & Industry are playing a pivotal role in promoting and financing Indian
companies in their endeavour to build business partnerships with the LAC region.
Proceedings
Exim Bank is a partner in India’s globalisation by proving technology, capital, raw
materials and capital goods. Besides, it also provides help in product
development, production, marketing, pre-shipment support and post-shipment.
Exim Bank supported the JV formed by the Strides Arcolabs Ltd and the Brazilian
drugs producer Cellofarm Ltd for production of generic drugs. The aim of the
plant is to produce drugs towards the treatment of diabetes, cardiology
problems and AIDS.
To illustrate another case, a subsidiary of Vijai Electricals
Ltd was established with the support of Exim Bank, in
the North-eastern part of Brazil. The main objective of
this plant is not only to promote energy efficient
transformers that improvises the quality of the power
system Brazilian grid but also aim to produce a carbon
free environment.
Session Chair Mr Prabhakar Dalal, Executive Director, EXIM Bank of
India
Panel Mr Camilo Acosta, Senior Programme Officer for
Science and Technology, CRUSA Foundation for
Cooperation, Costa Rica
Mr Michael Penfold, Associate Director, Vice Presidency
for Development & Public Policy, Corporacion Andina de
Fomento (CAF), Venezuela
Mr Adam Stepan, Managing Director, NLP Consultant
Inc, Brazil
CATALYSING PROJECT PARTNERSHIPS
THROUGH FINANCIAL MECHNISMS
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Mr Prabhakar Dalal,Executive Director, EXIM Bank of India
India’s total merchandise trade has
increased by more than four-fold
from $114 billion in 2003 to $489
billion in 2009, while total exports
has increased more than three-fold
from $53 billion in 2003 to $185
billion in 2009
41
Exim Bank’s partners in the LAC region are:
ØCABEI, Honduras
ØCaribbean Association of Industry & Commerce, Trinidad & Tobago
ØAndean Development Corporation (CAF)
ØBanco National de Comercio Exterior, Mexico
ØBanco de Inversion Y Comercio Exterior, Argentina
ØBanco Mercantil, Venezuela.
Among the key project financing entities in LAC, the CRUSA Foundation for
Cooperation, Costa Rica, merits special mention. CRUSA was born as a model of
cooperation through public-private partnerships in 1996. At present, CRUSA is
involved in 223 projects in education, 91 projects in science and technology, 70
projects in the environment and 94 projects in strategic capacity.
CRUSA is focusing upon climate change, education, use of readily available
communication technologies in education and entrepreneurship, renewable
energies and efficient use of energy and biotechnology.
Of key importance is CAF, a multilateral financial institution that mobilises
resources from international markets to Latin America to provide multiple
banking services to both public and private clients of its shareholder countries.
Its main focus is sustainable economic development and regional integration.
Mr. Michael Penfold, Associate Director, Vice Presidency, for Development & Public Policy, Corporacion Andina de Fomento (CAF), Venezuela; Mr. Camilo Acosta, Senior Programme Officer for Science and Technology, CRUSA Foundation for Cooperation, Costa Rica; Mr. Prabhakar Dalal, Executive Director, EXIM Bank, India; Mr. Adam Stepan, Managing Director, NLP Consultants Inc., Brazil conducting a Session on Catalyzing Project Partnerships through Financial Mechanisms
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
40
ThemeFinancing export and import of goods and services and execution of projects plays a
catalytic role in enhancing two-way trade and investments and building long-term
relationships between the regions. Institutions like EXIM Bank and Ministry of
Commerce & Industry are playing a pivotal role in promoting and financing Indian
companies in their endeavour to build business partnerships with the LAC region.
Proceedings
Exim Bank is a partner in India’s globalisation by proving technology, capital, raw
materials and capital goods. Besides, it also provides help in product
development, production, marketing, pre-shipment support and post-shipment.
Exim Bank supported the JV formed by the Strides Arcolabs Ltd and the Brazilian
drugs producer Cellofarm Ltd for production of generic drugs. The aim of the
plant is to produce drugs towards the treatment of diabetes, cardiology
problems and AIDS.
To illustrate another case, a subsidiary of Vijai Electricals
Ltd was established with the support of Exim Bank, in
the North-eastern part of Brazil. The main objective of
this plant is not only to promote energy efficient
transformers that improvises the quality of the power
system Brazilian grid but also aim to produce a carbon
free environment.
Session Chair Mr Prabhakar Dalal, Executive Director, EXIM Bank of
India
Panel Mr Camilo Acosta, Senior Programme Officer for
Science and Technology, CRUSA Foundation for
Cooperation, Costa Rica
Mr Michael Penfold, Associate Director, Vice Presidency
for Development & Public Policy, Corporacion Andina de
Fomento (CAF), Venezuela
Mr Adam Stepan, Managing Director, NLP Consultant
Inc, Brazil
CATALYSING PROJECT PARTNERSHIPS
THROUGH FINANCIAL MECHNISMS
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Mr Prabhakar Dalal,Executive Director, EXIM Bank of India
India’s total merchandise trade has
increased by more than four-fold
from $114 billion in 2003 to $489
billion in 2009, while total exports
has increased more than three-fold
from $53 billion in 2003 to $185
billion in 2009
43
H.E. Mr. Mauricio Macri Addressingthe audience at the valedictory
Proceedings
Argentina is creating a mini-Bangalore in the southern part of the capital city of
Buenos Aires, where Indian IT major TCS was the first company to set up
operations. Mr Mauricio Macri acknowledged the significant advances that the
Indian IT / ITeS industry has made globally and invited more Indian firms to invest
in Argentina.
Mr Macri also pointed to Argentina’s comparative strengths in
agriculture and urged Indian firms to invest in the south
American country. He added that physical infrastructure
development holds the key to Argentina’s growth process. With
fresh investments in this domain, Argentina would be able to
triple its industrial and agricultural output and exports.
Session Chair Mr Shubhendu Amitabh, Co-Chairman, CII LAC
Committee and Senior President, The Aditya Birla Group
Special Address Mr Mauricio Macri, Head of Government of Buenos
Aires, Argentina
Recommendations Mr Praful Talera, Member, CII LAC Committee and
Executive Director, Dynamic Logistics
VALEDICTORY SESSION
Mr. Praful Talera; H.E. Mr. Mauricio Macri, Head of Government of Buenos Aires, Argentina; Mr. Shubhendu Amitabh at Valedictory
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
CAF’s main clients are governments,
financial institutions, public enterprises and
private enterprises, and the institution
provides short, medium and long term
loans. Besides project financing, it also
provide technical support. CAF is the main
multilateral source of infrastructure
financing for LATAM.
In Brazil, owing to the recent global financial
crisis, 75% of the firms are family-owned
(including 10 of the 50 largest Brazilian
companies), and they are having difficulty
financing their working capital and other
operations with debt or equity capital.
In addition, due to its own ambitious capital
expenditure programme, the Brazilian government competes with private
companies to obtain debt financing.
There are only 80-100 private equity funds active in Brazil, and collectively only
4% of Brazil’s GDP is invested in private equity funds, significantly less than
China (10%), India (13%), South Korea (37%) or South Africa (57%) and not
enough to bridge the financing gap.
Due to the scarcity of capital and the flight from equity investments by many
investors, privately-held companies are generally undervalued in Brazil,
providing private equity investors with an excellent opportunity to acquire these
targets at attractive prices.
The panel recommended:
ØCooperation between EXIM Bank of India and BNDES to facilitate access
to trade finance for local firms in India, Brazil and LATAM region.
ØFacilitating access to information via local banking institutions.
ØCreation of an event that would connect and begin the exchange of ideas
between players in Indian and Brazilian PE markets and investment
banking communities.
Source : DGCIS/MoCI; Total imports from FY07 onwards includes oil imports • Total trade with LAC region rose more than three-folds;• During FY09, exports to LAC stood at US$ 6.2 bn, and Imports at US$ 10 bn;• Argentina, Trinidad & TobagoBy Prabhakar Dalal, Executive Director, EXIM Bank, India
Figure 21 India-LAC: Significant Buoyancy in Bilateral Trade Relations
2.2 3.0
4.3
5.76.2
2.1 2.7
6.16.6
10.0
4.3
5.7
10.4
12.3
16.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2004-05 2005-06 2006-07 2007-08 2008-09
Export Import Total Trade
th4 CII India-Latin America and Caribbean (LAC) Conclave
42
Conf
eren
ce P
roce
edin
gs
At a macro-level, Exim Bank identified the following areas of cooperation in key LAC countries:
Ø Automobiles, Energy/Biofuels, Mining, IT & Pharmaceuticals
ØICT, Pharmaceuticals, Renewable Energy & Engineering
Ø ICT, Pharmaceuticals, Chemicals, Autoparts, Biotechnology & Minerals
Ø Chemicals, Pharmaceuticals, Automobiles, Machinery & ICT
Ø ICT, Automobiles, Energy, Pharmaceuticals & Machinery
Ø ICT, Pharmaceuticals, Chemicals, Minerals & Engineering
ØICT, Pharmaceuticals, Minerals, Hydrocarbons & Engineering
Ø Pharmaceuticals, food processing, Iron &Steel, & Petrochemicals.
Brazil:
Chile:
Mexico:
Colombia:
Venezuela:
Argentina:
Peru:
Trinidad & Tobago:
43
H.E. Mr. Mauricio Macri Addressingthe audience at the valedictory
Proceedings
Argentina is creating a mini-Bangalore in the southern part of the capital city of
Buenos Aires, where Indian IT major TCS was the first company to set up
operations. Mr Mauricio Macri acknowledged the significant advances that the
Indian IT / ITeS industry has made globally and invited more Indian firms to invest
in Argentina.
Mr Macri also pointed to Argentina’s comparative strengths in
agriculture and urged Indian firms to invest in the south
American country. He added that physical infrastructure
development holds the key to Argentina’s growth process. With
fresh investments in this domain, Argentina would be able to
triple its industrial and agricultural output and exports.
Session Chair Mr Shubhendu Amitabh, Co-Chairman, CII LAC
Committee and Senior President, The Aditya Birla Group
Special Address Mr Mauricio Macri, Head of Government of Buenos
Aires, Argentina
Recommendations Mr Praful Talera, Member, CII LAC Committee and
Executive Director, Dynamic Logistics
VALEDICTORY SESSION
Mr. Praful Talera; H.E. Mr. Mauricio Macri, Head of Government of Buenos Aires, Argentina; Mr. Shubhendu Amitabh at Valedictory
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
CAF’s main clients are governments,
financial institutions, public enterprises and
private enterprises, and the institution
provides short, medium and long term
loans. Besides project financing, it also
provide technical support. CAF is the main
multilateral source of infrastructure
financing for LATAM.
In Brazil, owing to the recent global financial
crisis, 75% of the firms are family-owned
(including 10 of the 50 largest Brazilian
companies), and they are having difficulty
financing their working capital and other
operations with debt or equity capital.
In addition, due to its own ambitious capital
expenditure programme, the Brazilian government competes with private
companies to obtain debt financing.
There are only 80-100 private equity funds active in Brazil, and collectively only
4% of Brazil’s GDP is invested in private equity funds, significantly less than
China (10%), India (13%), South Korea (37%) or South Africa (57%) and not
enough to bridge the financing gap.
Due to the scarcity of capital and the flight from equity investments by many
investors, privately-held companies are generally undervalued in Brazil,
providing private equity investors with an excellent opportunity to acquire these
targets at attractive prices.
The panel recommended:
ØCooperation between EXIM Bank of India and BNDES to facilitate access
to trade finance for local firms in India, Brazil and LATAM region.
ØFacilitating access to information via local banking institutions.
ØCreation of an event that would connect and begin the exchange of ideas
between players in Indian and Brazilian PE markets and investment
banking communities.
Source : DGCIS/MoCI; Total imports from FY07 onwards includes oil imports • Total trade with LAC region rose more than three-folds;• During FY09, exports to LAC stood at US$ 6.2 bn, and Imports at US$ 10 bn;• Argentina, Trinidad & TobagoBy Prabhakar Dalal, Executive Director, EXIM Bank, India
Figure 21 India-LAC: Significant Buoyancy in Bilateral Trade Relations
2.2 3.0
4.3
5.76.2
2.1 2.7
6.16.6
10.0
4.3
5.7
10.4
12.3
16.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2004-05 2005-06 2006-07 2007-08 2008-09
Export Import Total Trade
th4 CII India-Latin America and Caribbean (LAC) Conclave
42
Conf
eren
ce P
roce
edin
gs
At a macro-level, Exim Bank identified the following areas of cooperation in key LAC countries:
Ø Automobiles, Energy/Biofuels, Mining, IT & Pharmaceuticals
ØICT, Pharmaceuticals, Renewable Energy & Engineering
Ø ICT, Pharmaceuticals, Chemicals, Autoparts, Biotechnology & Minerals
Ø Chemicals, Pharmaceuticals, Automobiles, Machinery & ICT
Ø ICT, Automobiles, Energy, Pharmaceuticals & Machinery
Ø ICT, Pharmaceuticals, Chemicals, Minerals & Engineering
ØICT, Pharmaceuticals, Minerals, Hydrocarbons & Engineering
Ø Pharmaceuticals, food processing, Iron &Steel, & Petrochemicals.
Brazil:
Chile:
Mexico:
Colombia:
Venezuela:
Argentina:
Peru:
Trinidad & Tobago:
44
Monica Socolovsky, Argentine Fashion
Designer and Entrepreneur, who made her
97th visit to India, attended the Conclave and
was recognized at the Conclave for her
distinguished role in the promotion of India-
LAC business and cultural ties. Monica’s
faith and spiritual pursuits brought her to
India for the first time in 1979. On her return,
she started SATHYA Fashion, the design
company, named after Sai Baba, and now an
established Argentine brand working in art,
design and production of women's apparel.
Monica combines the machine-made fabrics
with the exquisite hand-made designs and
embroideries of India. Monica’s faith in Sai
Baba and her business with India have made
her passionate about India. Monica is keen to
promote collaboration and exchanges
between the Indian and Argentine fashion
institutes and designers.
Ms. Monica Socolovsky, was felicitated byMr. Shubhendu Amitabh, CO Chairman CII LAC Committee, and Senior President The Aditya Birla Group, for distinguished role in the promotion of India-LAC business and cultural ties, at 4th CII India Latin America and Caribbean Conclave
Mr Macri invited Indian infrastructure
companies to consider participating in
Argentina’s infrastructure projects. He also
focused attention on the opportunity for bilateral
cooperation in tourism, which will increase with
better infrastructural support. “Come to
Argentina and look for the opportunities,” he
said.
The session chairman announced that the 5th
CII India-Latin America and Caribbean (LAC)
Conclave will be organised during February 24-
25, 2011. The venue and location of the Conclave
will be decided soon.
Mr Amitabh said that over 200 participants,
representing the Indian and LAC ministries and
government departments, business groups,
financial institutions and social organizations,
had engaged in interactive discussions at the
Conclave and projects worth over US$10 billion
were discussed. Proposals for M&As with total
estimated sales of $283 million were discussed,
covering sectors such as IT/ITeS, Healthcare,
Biotech, Agri-Business, Forestry, Auto and
Steel.
Mr Praful Talera, presented the Conclave
recommendations.
Argentina is creating a mini-
Bangalore in the southern
part of the capital city of
Buenos Aires. TCS was the
first company to set up
operations in this area and
we would like more Indian
firms to invest in Argentina.
Come to Argentina and look for the
opportunities
– Mauricio Macri
Head of Government of Buenos Aires, Argentina
th4 CII India-Latin America and Caribbean (LAC) ConclaveCo
nfer
ence
Pro
ceed
ings
Argentine Fashion Designer andEntrepreneur felicitated
at the Conclave valedictory
Conf
eren
ce P
roce
edin
gs
BUSINESS MEETINGS
44
Monica Socolovsky, Argentine Fashion
Designer and Entrepreneur, who made her
97th visit to India, attended the Conclave and
was recognized at the Conclave for her
distinguished role in the promotion of India-
LAC business and cultural ties. Monica’s
faith and spiritual pursuits brought her to
India for the first time in 1979. On her return,
she started SATHYA Fashion, the design
company, named after Sai Baba, and now an
established Argentine brand working in art,
design and production of women's apparel.
Monica combines the machine-made fabrics
with the exquisite hand-made designs and
embroideries of India. Monica’s faith in Sai
Baba and her business with India have made
her passionate about India. Monica is keen to
promote collaboration and exchanges
between the Indian and Argentine fashion
institutes and designers.
Ms. Monica Socolovsky, was felicitated byMr. Shubhendu Amitabh, CO Chairman CII LAC Committee, and Senior President The Aditya Birla Group, for distinguished role in the promotion of India-LAC business and cultural ties, at 4th CII India Latin America and Caribbean Conclave
Mr Macri invited Indian infrastructure
companies to consider participating in
Argentina’s infrastructure projects. He also
focused attention on the opportunity for bilateral
cooperation in tourism, which will increase with
better infrastructural support. “Come to
Argentina and look for the opportunities,” he
said.
The session chairman announced that the 5th
CII India-Latin America and Caribbean (LAC)
Conclave will be organised during February 24-
25, 2011. The venue and location of the Conclave
will be decided soon.
Mr Amitabh said that over 200 participants,
representing the Indian and LAC ministries and
government departments, business groups,
financial institutions and social organizations,
had engaged in interactive discussions at the
Conclave and projects worth over US$10 billion
were discussed. Proposals for M&As with total
estimated sales of $283 million were discussed,
covering sectors such as IT/ITeS, Healthcare,
Biotech, Agri-Business, Forestry, Auto and
Steel.
Mr Praful Talera, presented the Conclave
recommendations.
Argentina is creating a mini-
Bangalore in the southern
part of the capital city of
Buenos Aires. TCS was the
first company to set up
operations in this area and
we would like more Indian
firms to invest in Argentina.
Come to Argentina and look for the
opportunities
– Mauricio Macri
Head of Government of Buenos Aires, Argentina
th4 CII India-Latin America and Caribbean (LAC) Conclave
Conf
eren
ce P
roce
edin
gs
Argentine Fashion Designer andEntrepreneur felicitated
at the Conclave valedictory
Conf
eren
ce P
roce
edin
gsCo
nfer
ence
Pro
ceed
ings
Conf
eren
ce P
roce
edin
gs
BUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGS
Our Partners
Government of India
th4 CII India-Latin America and Caribbean (LAC) Conclave
February 24-25, 2011 : Hotel ITC Maurya, New Delhi
Register your interest with
Deepika ErasmusHead-Latin America & Caribbean
Confederation of Indian IndustryThe Mantosh Sondhi Centre, 23, Institutional Area
Lodi Road, New Delhi - 110 003Tel: 011-24629994-7 Ext # 469, 24653366 (D)
Fax: 011-24601298/24626149Email: deepika.erasmus@cii.in
www.cii.in
Announcing
5th
CII India-Latin America andCaribbean (LAC) Conclave:
C a t a l y s i n g Pa r t n e r s h i p s
Our Partners
Government of India
th4 CII India-Latin America and Caribbean (LAC) Conclave
February 24-25, 2011 : Hotel ITC Maurya, New Delhi
Register your interest with
Deepika ErasmusHead-Latin America & Caribbean
Confederation of Indian IndustryThe Mantosh Sondhi Centre, 23, Institutional Area
Lodi Road, New Delhi - 110 003Tel: 011-24629994-7 Ext # 469, 24653366 (D)
Fax: 011-24601298/24626149Email: deepika.erasmus@cii.in
www.cii.in
Announcing
5th
CII India-Latin America andCaribbean (LAC) Conclave:
C a t a l y s i n g Pa r t n e r s h i p s
Since 1895
Our OrganisationThe Confederation of Indian Industry (CII) works to create and sustain an
environment conducive to the growth of industry in India, partnering
industry and government alike through advisory and consultative
processes.
CII is a non-government, not-for-profit, industry led and industry
managed organisation, playing a proactive role in India 's development
process. Founded over 115 years ago, it is Indi's premier business
association, with a direct membership of over 8100 organisations from
the private as well as public sectors, including SMEs and MNCs, and an
indirect membership of over 90,000 companies from around 400
national and regional sectoral associations.
CII catalyses change by working closely with government on policy
issues, enhancing efficiency, competitiveness and expanding business
opportunities for industry through a range of specialised services and
global linkages. It also provides a platform for sectoral consensus
building and networking. Major emphasis is laid on projecting a positive
image of business, assisting industry to identify and execute corporate
citizenship programmes. Partnerships with over 120 NGOs across the
country carry forward our initiatives in integrated and inclusive
development, which include health, education, livelihood, diversity
management, skill development and water, to name a few.
CII has taken up the agenda of “Business for Livelihood” for the year
2010-11. Businesses are part of civil society and creating livelihoods is the
best act of corporate social responsibility. Looking ahead, the focus for
2010-11 would be on the four key Enablers for Sustainable Enterprises:
Education, Employability, Innovation and Entrepreneurship. While
Education and Employability help create a qualified and skilled
workforce, Innovation and Entrepreneurship would drive growth and
employment generation.
With 64 offices in India including 7 Centres of Excellence, 9 overseas in
Australia, Austria, China, France, Germany, Japan, Singapore, UK, and
USA, and institutional partnerships with 223 counterpart organisations in
90 countries, CII serves as a reference point for Indian industry and the
international business community.
Confederation of Indian Industry
The Mantosh Sondhi Centre
23, Institutional Area, Lodi Road, New Delhi – 110 003 (India)
Tel: 91 11 24629994-7 • Fax: 91 11 24626149
email: ciico@cii.in • Website: www.cii.in
Reach us via our Membership Helpline: 00-91-11-435 46244 / 00-91-99104 46244
CII Helpline Toll free No: 1800-103-1244
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