Investments will make India-Argentina relations more stable and deeper

HE Mr Hugo Gobbi, Ambassador of Argentina to India, emphasises why the India-Argentina relationship goes well beyond trade towards a vital South-South partnership. While there is a need to tap complementarities in trade, he feels that scaling up investments will elevate the relations to an altogether different level of partnership.

From Argentina’s point of view, the relationship with India has a strategic significance that goes beyond trade. Indeed, trade is important and we need to increase it. So it is critical to build bridges, have more links and give more impetus to our bilateral relations.

But our relations have a broader perspective. First of all, we are both emerging and developing countries from the global South, so there is a dimension of South-South cooperation. We have the same type of challenges. At the same time, we have the same type of institutions and values; so there is a commonality here of being from the south, being also democratic and as well as federal republics.

We see this expanded dimension in the way India and Argentina vote in the United Nations; in the way we coordinate positions in G20 and in the way we back each other across many fora. Actually, from a political perspective, we see eye to eye most of the time on what’s happening in the international field.

Of course, we have two big difficulties. India and Argentina are geographically far away and that influences your perspective and the nature of problems. Our region is totally different from your region, and has markedly different issues to tackle.

Untapped complementarities

There are probably very few countries in the world that have seen the kind of complementarities that Argentina and India enjoy. Argentina is the eighth largest country in the world. It is rich in minerals and natural resources, with an incredible agricultural production. If we examine closely, the potential that comes due to our complementarities with India is still quite underdeveloped. Our bilateral trade is about US$ 3.3 billion but Argentinian exports are very much concentrated in edible oils, soya oil mainly. So there’s much room for expansion and diversification.

One example that comes to mind, is mining. For India, Lithium will be an important mineral, and the same goes for oil and gas. Conversely, Argentina has the second largest shale gas reserves in the world. It also has the fourth largest shale oil reserves in the world in Vaca Muerta. Also Argentina is part of the lithium triangle.

The nuclear sector is another significant area of cooperation. Argentina exports to many places nuclear research reactors (Algeria, Holland,Australia, etc). This is an area in which India is also very developed, and the potentiality of cooperation in these fields could be immense.

So there is a lot of potential in sectors that people do not think of, or are simply not aware. The largest investment of Argentina in India is from a company called Globant. It employs 2,400 engineers and is a unicorn. India is very strong in IT, and so is Argentina. The latter has six unicorns and one of the most vibrant IT sectors, at least in the developing world.

India can play a very important role as a bridge for many markets where it’s not that easy for Argentinian companies to have access. On the other hand, Argentina can be a conduit for India for the especially Spanish speaking world. As you know, Spanish is the second most spoken native language in the world and countries like Argentina, Chile and Mexico can help India explore these markets.

The third critical area is agriculture. Argentina and India have a South-South Cooperation approach. We don’t try to tell others what they should do. Instead, we ask how we can be of any help.

Argentina has successfully scaled up agriculture production and we produce food for 450 million people. Indeed, this is also attributable to the weather and quality land resources. But it’s also because of the technological capacity that Argentina has. I think we can share and cooperate together and increase our mutual capacity.

We see a lot of opportunities for Indian companies to invest as well. India has an industrial base that it wants to develop, and it wants to be very powerful in the automobile sector. India also wants to move into EVs, and for that you will need the batteries. Besides Lithium, I think there is a lot of potential of investment in copper & gold, the latter because India has incredible producers of jewellery. Similarly, we can explore avenues for Indian investments in agriculture and IT.

There are other areas that do not have easy complementarities, but we need to push for cooperation. For instance we are helping a company to invest in India that specialise in sterilization of hospital and clinics. It’s going to outsource part of its production here in India with a regional view to serve the South Asian market.

Areas for improvement

There are three critical areas in which I feel we need to work – to bolster the relationship with India. The first is to lower our logistics costs, since we are geographically very far apart. That’s a big challenge because our logistics costs are very expensive. I consider we have to think about it in a structural way and reduce these cost and improve our connectivity.

Also, Argentina is pushing forward our trade negotiations with India together with our partners in MERCOSUR (Argentina, Brazil, Paraguay and Uruguay). Our Preferential Trade Agreement with India is limited as we only have 450 tariff lines. Expansion of these product lines can help unlock the great potential we have of increasing our bilateral trade.

The third priority is to have more investments on both sides. If you only have trade, the relation is vulnerable. Prices go up or down and then our trade suffers the volatility. But if you have investments on one side or the other, then the relation becomes – more stable over the long term. It becomes a totally different level of partnership.

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HE Mr Hugo Gobbi is the present Ambassador of Argentina to India. Views expressed are personal. usual disclaimers apply.