Trade Relations between India and Central America
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The Central American Group: Hello. Welcome to another episode in our continuing series of discussions with individuals that are experts in various aspects of doing business in Central America. Today we’re fortunate to have Ariel Andrade with us. Ariel is a former ambassador from El Salvador to India. He going to speak a little bit about trade relations between India and Central Ameri. Welcome to our podcast. And how are you today?
Ariel Andrade: I’m fine, Thank you. I’m happy to be here with you today to talk about trade relations between India and Central America. I am not very experienced in doing podcasts, so I hope that all goes well.
The Central American Group: Since you’re someone who has vast experience in Indian – Central American relations, perhaps you can tell us why, in recent times, India has become relevant on the world stage.
Ariel Andrade: Okay. I’m passionate about India and the reason why India has become especially important in the world now is for several reasons. I would like to focus on the issue of doing business with the country.
First of all, I would mention that size and location are important. India is the seven largest country in the world and has almost three million square kilometers of area. Of that land, 25% is occupied by biological reserves. In addition to those reserves, India has 300 square kilometers of exclusive economic zones with access to the Indian Ocean, which happens to be one of the most important oceans in terms of trade.
In addition to physically being one of the largest countries in the world in area, India is now the second most populated country in the world. The nation has about 1.4 billion inhabitants and is growing each year by an additional 16.6 million people. This contrasts with the population of Central America of roughly 50 million. Every three years, a population of the size of the entirety of Central America will be added to the country. By 2021 or 2022, the population of India will be greater than that of China. This will have significant implications for trade relations between India and Central America.
Another important thing to consider is the rise of the middle class in India. Its numbers increased from less than 30 million in 2010 to around 300 million at present. This means that India is a growing market and very important in terms of global consumption. It is projected that, by 2030, the Indian middle class will reach 650 million. Taking this into account, I think also that is important to keep India’s size in mind.
Additionally, India is the fifth-largest economy in the world, behind countries such as the US, China, and Germany. It is important to note that India’s GDP has been growing steadily and fast in recent times. For example, last year the economy grew at a rate of almost 7 percent. These days India is competing with China to be the fastest-growing economy in the world. It is expected that India will, by 2030 be the third-largest economy in the world as measured by the size of its gross domestic product. This development will definitely have consequences for trade relations between India and Central America.
As you can see Indian business leaders are becoming important leaders of global businesses. For instance, Google’s CEO is from India, as is the CEO of Microsoft. You can find many executives of Indian origin in important positions in large companies. I think that this contributes to the relevance of India in the world economy.
The Central American Group: That was a pretty comprehensive overview of the economy and the significance of India in the world. What are trade relations between India and Central America like today?
Ariel Andrade: I must say that trade relations between India and Central America have been growing. They have not been that important in the past, but in the last year, things began to change. In 2019, the total exchange of goods between India and Central America reached almost US $1.9 billion. It is important to recognize that India is becoming a very relevant partner of the region in terms of exports, mostly as a supplier. India exported US $1.24 billion last year, while Central American countries only exported a total of US $642 million worth of goods to India.
Although India is in the process of developing deeper relations with the U. S., China, and Europe, trade relations between India and Central America are growing steadily.
In terms of diplomatic relations, it is important to see that five of the eight countries that I mean included in the Central American Integration System (CICA) have embassies in India. Interaction between Indian chambers of commerce and the region is also increasing. Many of them are conducting commercial missions to the region.
Also, I must point out that a lot of Indian business promoters are now living in the region. I know that this may not seem important, but it is because in terms of culture there is some significance. Big companies from India are now in the region, especially in Costa Rica
The Central American Group: What are the untapped opportunities that you see for people that want to do business between Central America and India?
Ariel Andrade: India is committed to benefiting from free trade agreements with several countries all over the world. So, in that spirit we Central American countries have created a large network for export possibilities from the region. Enhanced trade relations between India and Central America will enable greater imports for local consumption. Indian companies with a presence in Central America can export their products to countries with whom Central American countries have free trade relationships. This includes countries such as the United States.
For the rest of the content of this discussion, please listen to the audio recording.
Those wishing to contact Ariel Andrade can contact him through his direct email: firstname.lastname@example.org.
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