When Goldman-Sachs coined the term BRICs, they could have little idea of what effect this economic block would have on trade in Latin America. Representing Brazil, Russia, India, and China, the BRIC group of rapidly developing economies are seen as the lynchpin for Latin America's financial autonomy. China has received the lion's share of attention from most observers of Latin American trade, with $140 billion dollars spent on trade between Latin America and China in less than a decade. This position of dominance is reflected by the wealth of media attention lavished on Chinese companies entering the market below the equator.
A surprising twist on this Sino-centric focus is the swift entry into Latin America by China's neighbour India. Long considered an IT powerhouse internally, India has begun reaching out to South America for several distinct reasons. With a buoyant market left unscathed by the financial crisis of 2008-09, the region is producing and exporting the goods and products required to fuel the growth of the world's largest economies. India's interest in natural resources is complemented by Latin America's huge mineral wealth and burgeoning market for the consumer products India creates. Nevertheless, to label the area as a mere producer of mineral and agricultural products fundamentally avoids the changing nature of trade with Latin America.
India recognized the huge potential of bringing its own products into such a vibrant market as Latin America, with the rise of an affluent middle class in South America reflected in the increased spending on a wide variety of goods. This natural market for India's electronics, technology, and consumer goods exporters was too fertile an opportunity to pass up. The first tendrils of interest are reflected in the $20 billion dollars of trade between the countries from 2000 to 2009. Indian companies have also invested heavily in Latin America, with $12 billion dollars of investment in areas such as information technology, pharmaceutical companies, and mining. With many of the barriers to trade dissolving away, the fruitful relationship with India is growing.
The flowering of business opportunities is a direct reason for India's interest in entering Latin America. With complimentary markets offering the opportunity for these multi-trillion dollar economies to grow influence and wealth cooperatively, the future relationship between India and Latin American countries looks assured. With cultural and trade links being cultivated assiduously between these two powerhouse regions, the potential for vast growth is luring in investors and service providers catering to this expanding business class. The idea of a second Chinese-style investor in the region is cause for much interest in the region, with India and Latin America still in the relative infancy of their relationship.
Trade platforms are springing up to cater for this expanding, mutually-beneficial relationship.Mercatrade.com, an online B2B platform focused on bringing together suppliers and buyers interested in Latin America, focuses on traditional powerhouses such as the U.S. but also BRIC countries looking to import and export through Latin America. Platforms such as this are paving the way for closer relationships between suppliers and buyers, with access to the contacts they need available instantly.
The main question for most investors in Latin America via India is -- can the growth be sustained? With the surge in living standards throughout Latin America and the global expansion of India in a higher gear than ever, the one sure bet is that these two regions will draw closer together. Reducing trade tariffs, increasing visibility of international investment, and the signing of mutually beneficial treaties will accelerate this growth over the next decade. As BRIC begins to fulfil even more of its huge potential, Latin America is in the prime position to grow alongside these next-generation world trade leaders.