India Seeks Larger LatAm Presence

Indians aim to boost involvement in LatAm, as their companies seek high-growth markets as well as new sources of raw materials and agricultural products. Facing demographic trends that suggest a transformation similar to China’s, Indian firms bring different offerings to the table than the region’s more established trading partner, officials tell a LatinFinance panel. Two decades since India embarked on a more open economic policy, India is faced with rising food and energy prices, and like China it is likely to seek investments abroad in these sectors. “It is in food where Latin America will offer the most synergistic relationship [with India],” says TCA Ranganathan, chairman of the Exim Bank of India. For instance, he notes, India has rapidly become a net importer of high value crops such as sugar cane due to water and land shortages. Indian investment flows to LatAm reached about $25bn last year, representing an increase from next to nothing 10 years ago, but it still falls short of the $140bn from China. That India’s global expansion comes through private entrepreneurs, as opposed to China’s government-driven model, may be beneficial to LatAm, Ranganathan explains. “You won’t see a $140bn figure [from India-LatAm],” Ashutosh Maheshwari, CEO of Motilal Oswal Investment Banking. “It’s not the government driving it. These are corporates that are accountable to those from whom they raise money.” This means that Indians are better disciplined and use capital wisely, but are unable to have a 20 to 30-year investment horizon like the Chinese do, he explains. Expertise in services, engineering and other specialty areas is where India is poised to add value, rather than through sheer dollar size. Indian crop-protection company United Phosphorus has already made six investments in the region and appears satisfied with the quality of labor in the region. “The management in Latin America is very mature, very competent and very reliable,” says Vikram Shroff, the company’s ex