The Lure of
Latin America
A Secure Investment
Destination for India Inc.

More and more Indian companies are looking to do business in Latin America as they seek exposure to growing markets and a more secure investment destination, according to the Wall Street Journal.

Indian companies have invested around $9 billion in Latin America during the last several years, the New York-based, leading US financial daily said citing R. Viswanathan, India's ambassador to Argentina, Uruguay and Paraguay, and "that number is just going to keep on growing".

As markets stabilized in the last few months of 2009, a series of Indian companies affirmed their plans to increase their exposure to Latin America, the Journal said.

Tata Consultancy Services Ltd., which already has sizable operations throughout the region, said in September that it was eyeing several acquisition targets.

And Tech Mahindra Ltd. Chief Executive Sanjay Kalra said at the World Economic Forum in Davos, Switzerland, his firm is "very interested" in mergers and acquisitions in Latin America.

Information-technology companies see plenty of opportunity in the region using service centres to tap local customers and also to serve clients in a slowly rebounding US economy, the Journal said.

Interest, however, has been picking up more aggressively on the commodities front, it said citing Ravi Bhagavan, partner at Galileo Global Advisors, a New York consultancy that has helped Indian companies to expand operations abroad.

The emphasis has been on becoming a serious player in Brazil, but "our feeling is that Indian companies should be looking well beyond Brazil and look at places like Colombia and Chile", which many companies have tended to overlook, Bhagavan was quoted as saying.

The largest-ever investment by an Indian company in Latin America came in 2007 when Jindal Steel & Power Ltd. spent $2.1 billion to develop an iron-ore mine in Bolivia. The next step in this trend is the agri-business side, the Journal said citing market watchers.

Encouraging growth prospects are luring many of these South Asian corporations into Latin America. Pharmaceutical companies such as Dr. Reddy's Laboratories Ltd. and Ranbaxy Laboratories Ltd. both see rapid growth for their generic-drug portfolios in the region.

 

Indo-Brazilian Trade to Touch $10bn

Speaking to reporters in the eastern city of Kolkata recently, Brazil's ambassador to India Marco Brandao said bilateral trade between India and Brazil would touch $10 billion in the next three to four years.

"We hope to take the bilateral trade to $10 billion mark in the coming three to four years from more than $5 billion at present," Ambassador Brandao said at the press meet organized by the Indian Chamber of Commerce.

Commodities like sugar, biofuel and fertilizers are the most traded between the two countries.

Brandao said most of the investment from India is in the pharmaceutical sector. He, however, invited Indian companies to invest in the hospitality sector ahead of the World Cup in 2014 and Olympics in 2016 in Brazil.

Talking about the sugar sector, he said Indian sugar companies are expanding in Brazil. "Indian sugar producer Shree Renuka entered Brazil last year," Brandao said.

Shree Renuka acquired Brazil's Vale Do Ivai SA Acarelcool at a cost of Rs.1,112 crore in November. This gave the Indian sugar maker ownership of eight sugar mills in Brazil with an aggregate crushing capacity of 35,000 tonne a day.

India-Mexico FTA Talks in May

Earlier, speaking in the same city, Ambassador of Mexico to India Jaime Nualart said his country will hold open talks for a full free trade agreement (FTA) in May.

"Negotiations for FTAs take time and we are at a preliminary stage. A high-level committee on economic and trade relations will meet with its Indian counterparts in May. FTA is one of the major issues to be discussed at the meeting in Mexico," he said on the sidelines of an interactive session organizd by the Indian Chamber of Commerce.

This will be the second meeting on FTA with India. In 2007, Mexico signed two agreements with India a bilateral investment promotion and protection pact and a memorandum of understanding to set up a high-level group (HLG) of top public officials and experts to look around for areas of synergy.

"We will also conduct a feasibility study to find out the pros and cons of the FTA with India," he said. According to Ambassador Nualart, Mexico is keen on foreign direct investment from India in the mining sector. "We seek Indian FDI in the mining sector in our country," he said.

A technical team from the Mexican industry ministry will be visiting India in March-April to make a presentation to prospective investors.

Bilateral trade between India and Mexico crossed $2.95 billion in 2008 and is expected to touch $5 billion by 2010.

NIIT to Give BPO Training to
Colombians

Meanwhile, in a development that may bring more and more Latin Americans to India, the National Institute of Information Technology (NIIT), an IT training major in the country, is poised to help Colombians write professional mails, talk over telephone and conduct business in English.

"We will help them develop English soft skills. The aim is to improve their English proficiency to conduct business better," NIIT spokesman Prateek Chatterjee said in New Delhi recently.

Chatterjee said NIIT will help in bettering English soft skills like voice and accent training, professional e-mail writing, telephone etiquettes and other such fields.

The company has already signed an agreement with the government-run Servicio Nacional de Aprendizaje (SENA) in Bogota on this issue.

SENA is the leading government technical education institute in the South American country providing free education and professional training to millions of people.

Under this cooperation, NIIT will provide content for Business Process Outsourcing (BPO) courses and training, procurement of content for English Language training courses and training, and 'Train the Trainer' for BPO courses.

The company said this "international cooperation general agreement" marks a long-term commitment on part of NIIT and SENA to jointly develop human capacity in Colombia.

This will be followed by closer association in the near future, wherein NIIT will provide SENA training on various IT applications, soft skill training, access to e-learning, and launch its India Education Programme.