report - confederation of indian...

4th

CII India-Latin America andCaribbean (LAC) Conclave:

Enhancing Business Partnerships

29-30 April 2010 : New Delhi

Government of India

Report

Since 1895

4th


Enhancing Business Partnerships

29-30 April 2010 : New Delhi

Contents

th4 CII India-Latin America and Caribbean (LAC) Conclave

Executive Summary 1

Conclave Recommendations 5

Conference Proceedings 7

Illustration

Figure 1 : Country-wise share of Indian exports in LAC 9

Figure 2 : Business prospects in Colombia 11

Figure 3 : Colombian Business Environment 11

Figure 4 : Perspectives on Colombian Economic Growth 12

Figure 5 : Region-wise share of India’s exports 13

Figure 6 : Sixteen (16) Operative Exam Bank of India, Line of Credit 15amounting to $173.65 million in LAC region

Figure 7 : Projects supported in LAC region by EXIM Bank of India 15

Figure 8 : India, a net food importer 21

Figure 9 : Indian Investment & Joint Ventures in LAC 22

Figure 10 : Chilean Mining in the World 24

Figure 11 : Chile in the World 25

Figure 12 : Logistic and Transportation 28

Figure 13 : Logistic and Transportation: Challenge 28

Figure 14 : India- LAC shipping routes 29

Figure 15 : Infrastructures in Latin America 30

Figure 16 : The Port of Cutuco, El Salvador: Building South-South Trade 31

Figure 17 : Exports (as percentage) of Indian IT-BPO market 32

Figure 18 : India and LAC - Partnership 34

Figure 19 : India-Brazil bilateral trade and investment flows 35(2002 vs 2008)

Figure 20 : ITO-BPO Competitiveness 35

Figure 21 : India-LAC: Significant Buoyancy in Bilateral Trade Relations 42

1

Executive Summary

The tyranny of geographical distance that limited India-LAC bilateral trade and

investment flows over the years is being reigned in as businesses on both sides

show greater intent to enter into collaborative arrangements for diverse reasons

like infrastructure development, market access, transfer of technology,

outsourcing, capacity building and skills development. This is writ large in the

bilateral trade and investment patterns. As a case in point, India-LAC bilateral

trade flows have increased four-fold in the last five years, from $4.2 billion in

2004-05 to $16.1 billion in 2008-09. But, this is apparently the tip of the iceberg.

The 4th India-Latin America and Caribbean Conclave, organised by CII in

partnership with the Ministry of Commerce and Industry, Ministry of External

Affairs, and EXIM bank of India in New Delhi during 29-30 April 2010, turned the

spotlight on the key issues that underlie the bilateral business engagements.

Over 200 participants representing the Indian and LAC ministries and

government departments, business groups, financial institutions and social

organisations engaged in the interactive discussions covering sectors such as

Agriculture and Food Processing, Infrastructure, Engineering, Project

Management, Logistics and Transportation, IT & ITeS, Pharma, Healthcare and

Medical Equipment.

Regional economic groupings in the LAC region have played a positive role in

promoting the overall economic well-being of the region. From the Indian

viewpoint, any deep engagement with a sub-regional group will provide a larger

market access for key product and services. Mechanisms for financing business

partnerships were also discussed in depth.

The B2B sessions witnessed over 350 business meetings and were an integral

part of the programme where 90 plus projects worth over US$10 billion were

discussed. Proposals for M&As with a total estimated value of $283 million were

discussed. These discussions covered sectors, apart from those listed above,

such as, Sugar, Ethanol, Textiles, Cosmetics and Beauty Products, Herbal

Products, Consumer Durables and Kitchenware, Auto Components Chemicals,

Construction, Rail Road System, Steel Bridges, Waste Water Treatment, Hospital

Infrastructure, Industrial Consultancy, Free Zones, Mining and Mining

Exec

utiv

e Su

mm

ary


Exec

utiv

e Su

mm

ary

2


Equipment, Oil and Gas, Steel, Coking coal, Biotechnology, Tourism & Services,

Energy, Electric Equipment, Wood and Furniture, etc.

14 LAC countries were represented - Argentina, Brazil, Chile, Colombia, Costa

Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Mexico, Paraguay, Peru,

Uruguay, Venezuela.

Discussions covering a swathe of business sectors touched upon the policy

environment in both regions and the latent potentials for collaborative

businesses. At the end of the Conclave, a set of recommendations were put

forth for follow-up action.

Mr Jyotiraditya Scindia, Minister of State for Commerce & Industry, Government

of India, set the tone for the Conclave during his inaugural address, when he said

that Indian technology and Latin American natural and social capital make a great

fit. The minister also talked about the compelling opportunities for India to

enhance its external trade through geographical and product diversification, with

particular focus on the LAC markets. He cited energy cooperation and agriculture

outsourcing as other key areas for bilateral cooperation. Mr Scindia also spoke

about the role of tourism in bringing our cultures together. Bilateral and

multilateral discussions with respect to double taxation agreements and free

trade agreements were part of the focus during the inaugural.

The session on ‘Leveraging Regional Engagement to Strengthen Business

Partnership’ underlined the fact that regional economic groupings in the LAC

region have played a positive role in promoting the overall economic well-being

of the region. India has maintained close ties with the major groupings such as

Mercosur. The panel observed that from the Indian viewpoint, any deep

engagement with a sub-regional group will provide a larger market access for

key product and services. Countries like Uruguay in South America and El

Salvador in Central America were cited as hubs for transit trade and entry into the

LAC markets.

The session on ‘Sectoral Synergies in Agriculture & Food Processing’ reiterated

the view that LAC countries like Argentina, could offer outsourced agriculture

solutions to India, which is no longer a food surplus country. It was said that with

50% of India’s population being under 25 years, the size of the future Indian

market for a whole class of agricultural products would be very large. India is

already a net importer of edible oils and pulses. The situation can be addressed

through agriculture outsourcing and sharing of knowledge and practices in

agricultural value change, the panel said.

Likewise, the session on ‘Sectoral Synergies in Infrastructure, Engineering and

Project Management’ focused attention on technology and knowledge sharing

in areas that are critical to the growth of Indian and LAC economies. Regarding

project funding, it was said that LAC should not only find funding opportunities

locally and from international funding organisations but also explore the LoCs

offered by Exim Bank of India. At the same time, Indian companies were invited

to explore project opportunities in LAC region in Railways, MRTS, coal, mining,

alternative energy and oil exploration.

The session on ‘Transportation and Logistics: Bringing India and LAC Close’

addressed the issue of lack of adequate sealinks between the two regions. It

was said that policy intervention from both Indian and LAC governments were

required to build better logistics and transport links between the two regions.

The panel also discussed alternative sea routes between India and the Atlantic

and Pacific coasts of the LAC region.

The session on ‘Sectoral Synergies in IT and ITeS’ underlined India’s leadership

position in the IT-BPO space and how it could contribute in good measure to

LAC’s IT / ITeS sectors. LAC countries could replicate India’s successes in this

sector. It was said that India continues to take the centre-stage in the IT/ITeS

sector with 51% share of the total sourcing market. The industry accounts for

25% of India’s exports and 10.5% of services revenues. Also, the global sourcing

industry in India is likely to reach $175 billion, while the domestic outsourcing

industry is expected to reach $50 billion by 2020. In terms of bilateral

cooperation, it was said that Indian companies could customise the end

products and services as per needs of LAC customers. The panel called for

renewed focus on technical education and skills development and observed that

Indian and LAC IT / ITeS sectors need to create, maintain and share information

databases.

The session on ‘Sectoral Synergies in Pharma, Healthcare & Medical

Equipment’, among various areas of cooperation, drew attention to India

emerging as a hub for clinical trials. The panel said that LAC could be drawn into

the life sciences research fold where India has a good track record. It also

recommended the establishment of large-scale inter-continental multi-centres

for clinical trials. It was stated that LAC could import from India the bulk of its

APIs, which serve as raw materials for drugs and pharmaceuticals.

The session on ‘Catalyzing Project Partnerships through Financial Mechanisms’

underlined the buoyancy in India-LAC bilateral trade flows. Indian investments

and joint ventures in the LAC region are mainly in the steel, pharmaceuticals,

chemicals, engineering, IT software, petroleum, mining and biotechnology

sectors. At present, 16 Exim Bank of India Line of Credits (LoCs) amounting to

$173.65 million are operative in the LAC region. The panel called for cooperation

between EXIM Bank of India and BNDES to facilitate access to trade finance for

local firms in India, Brazil and the rest of the LAC region. to facilitate access to

information via local banking institutions, and the creation of an event that would

connect and begin the exchange of ideas between players in Indian and Brazilian

Private Equity markets and investment banking communities.

3


Exec

utiv

e Su

mm

ary

Exec

utiv

e Su

mm

ary

4

H.E, Mr Mauricio Macri, Head of Government of Buenos Aires, Argentina, during

his address at the Valedictory Session, invited Indian companies to invest in a

‘mini- Bangalore’ in Buenos Aires. He underlined the growing opportunities for

agriculture outsourcing and drew the attention of the audience to the likely

benefits for both regions.

The Conclave concluded with Mr Praful Talera, Member, CII LAC Committee and

Executive Director, Dynamic Logistics, presenting the Conclave

recommendations. Mr Shubhendu Amitabh, Co-Chairman, CII LAC Committee

and Senior President, The Aditya Birla Group, announced that the 5th CII India-

LAC Conclave would be held on February 24-25, 2011 at New Delhi.


5

Conclave Recommendations

External Trade

Agriculture

Transport & Logistics

Tourism

ØGeographical and product diversification: India should diversify the

items of exports to LAC countries and increase the volume of exports to

all target markets in the region. Currently, Brazil alone accounts for 44%

of Indian exports to LAC. At a broader level, the expectation is that India-

LAC bilateral trade should match India’s bilateral trade with other key

regions such as North America, EU, Africa and Asia.

ØOutsourcing food needs: Even as India faces increasing land and water

shortages that affects domestic food production, LAC countries like

Argentina, Brazil, Peru and others have invited India to consider

outsourcing its food needs by investing in the LAC farm sector. At the

same time, the Indian market is expected to open up to certain exotic

and high nutritional farm products that are unique to countries like Peru.

Indian investments in LAC farm sector could take the shape of JVs, and

benefit from the fact that LAC has a low population base, strong

technology wherewithal, and plenty of land and water resources.

ØPromote ‘Go East’ shipping route: This will establish close links

between India and the Pacific coast of LAC region. Shipping routes

between India and LAC are currently long-winding resulting in high cost

of transaction.

ØLeverage transit trade facilities in El Salvador & Uruguay: Both

countries offer world-class transit trade facilities that Indian exporters

could avail of to access the wider LAC markets.

ØTo strengthen economic and cultural linkages: The volume of annual

Indian outbound tourists has crossed the 50-million mark. Indians are

traveling in greater numbers overseas, both for business and leisure.


Conc

lave

Rec

omm

enda

tion

s

However, the number of Indian tourists traveling to the LAC regions is

relatively small owing to lack of direct transport connectivity and general

lack of awareness of the tourist destinations in the region. This is equally

true of LAC tourist arrivals in India. Focused tourism promotion will also

lead to greater cultural understanding.

Ø

Ø

Ø

Ø

Ø

Ø

Ø

Ø

Ø

Ø

Ø

Financing Mechanisms

IT / ITeS

Pharma, Biotech, Medical Equipment & Healthcare

Institutional tie-ups: EXIM Bank of India and Brazilian Development

Bank (BNDES) should enter into greater cooperation to facilitate access

to trade finance for local firms in India, Brazil and Latin American region.

Information dissemination: Promote an event that would connect and

begin the exchange of ideas between players in Indian and Brazilian PE

markets and investment banking communities.

Customisation: Indian IT / ITeS firms should look to customisation of

end products & services as per needs of LAC customers. This could be

achieved by (i) investing in local operations; (ii) creating local ‘brands’ that

customers can associate with; (iii) emphasis on recruiting local talent.

Streamlining of HR issues: This would call for (i) seamless processing

of business visa and work permits;(ii) reduction in rigid labour laws that

lead to increase on cost of employee; (iii) resourcing – finding right

people in new territory; (iv) managing training & development costs.

Investment in technical education & skills.

Information sharing & market intelligence.

Export of APIs: Indian active pharma ingredients (API) manufacturers

can tap into the LAC pharma markets to supply raw materials.

LAC Government procurements: Indian medical devices and pharma

companies could set up local manufacturing operations to leverage the

large procurement programmes in countries like Mexico and Cuba.

Clinical trials: Pharma companies could collaborate for inter-continental,

mutli-centre clinical trials.

Traditional practices: Promote Indian herbal remedies in LAC countries.

Medical tourism: Leverage the complementarities in medical tourism.

6


7

Conference Proceedings

Session Chair Mr Shubhendu Amitabh, Co-Chairman, CII LAC

Committee and Senior President, The Aditya Birla Group

Inaugural Address Mr Jyotiraditya Scindia, Minister of State for

Commerce and Industry, Government of India

Special Address Ms Liliana Perez, Secretary General, Ministry of Foreign

Affairs, Republic of Colombia

INDIA AND LAC: A NEW GROWTH STORY

Proceedings

The global economic order in the New Millennium is largely fashioned by the

dynamism of the emerging economies. Sample this. While the advanced

economies are expected to register 0.014% GPD growth (at constant price) in

2010, the emerging economies are poised for 3.99% GDP growth (at constant

price) in the same period. Likewise, investment as percent of GDP in the

advanced economies is expected to grow at relatively slow rate of 18.01% in

2010 compared with 32.5% in the emerging economies in the same period.

Similarly, the import market for goods and services in the developing countries

show a percentage change of 0.9% compared to 0.4% in the developed

countries.

The situation demands that India should enhance its trade and investment

engagements with the developing world, which it has over the last two decades

by building its bilateral economic ties with Asian, African and Latin American and

Caribbean (LAC) countries.

India’s engagement with the LAC region has lately gained significant traction,

triggered mainly by the Government of India ‘Focus LAC’ programme, supported

by multilateral and bilateral agreements with LAC countries.

Trade diversification will form the core of India’s strategy to strengthen its

economic engagements with the LAC region, which is otherwise geographically


Indian technology and Latin America’s natural and social capital make a great fit. There are compelling opportunities for India to enhance its external trade through geographical and product diversification, with particular focus on the LAC markets. Tourism can play a great role in bringing our cultures together.

– Jyotiraditya ScindiaMinister of State for Commerce and Industry, India

distant from India. Alongside, due initiatives are called for to diversify the India-

LAC trade basket.

The impact of this diversification will be seen in the India-LAC trade volumes in

the years to come. As of now, India-LAC bilateral trade at $16 billion compares

poorly with India’s bilateral trade flows with the US ($39.71 billion), EU ($70

billion) and Africa ($38.9 billion).

As such, India-LAC bilateral trade flows have increase four-fold in the last five

years, from US$ 4.2 billion in 2004-05 to US$ 16.1 billion in 2008-09, but the

potentials indicate that there is much more at hand to be achieved with the active

participation of the Indian and LAC governments and industry.

As stated above, geographical diversification

will determine the extent to which India-LAC

bilateral trade will progress in the coming

years. As per 2007-08 trade data, Brazil

accounted for 44% of India’s exports to the

LAC region ($5.66%), with Colombia coming

in next with 13.4% share at 0.76 billion and

Mexico with 11.30% share at 0.59 billion.

Figure 1 illustrates the lop-sided distribution

of Indian exports to LAC region.

Mr. Shubhendu Amitabh, Co-Chairman, CII LAC Committee, and Senior President, The Aditya Birla Group, India; H E Mr. Jyotiraditya Scindia, Minister of State for Commerce and Industry, Government of India and Ms. Liliana Perez Uribe, Secretary General, Ministry of Foreign, Affairs, Republic of Colombia; at Inaugural Session – India and LAC: A New Growth Story

8

th4 CII India-Latin America and Caribbean (LAC) ConclaveCo

nfer

ence

Pro

ceed

ings

Indian exports to other key LAC countries

like Argentina, Venezuela, Peru, Chile,

Uruguay, Trinidad & Tobago, El Salvador,

Guatemala, Paraguay, Ecuador and others

are relatively negligible at this stage.

Hence, the panel underl ined the

importance of geographical diversification

in India’s exports to LAC.

Product diversification was cited as another

thrust area for India, in its efforts to increase

its exports to the LAC region. As of date,

mineral fuels, mineral oils and products of their distillation; bituminous

substances; and mineral waxes are the top export items, followed by vehicles

other than railway or tramway; rolling stock and parts and accessories thereof,

and organic chemicals in that order.

In fact, the export product diversification should be aligned to the differentiated

needs of the LAC countries. Currently, Indian exports to the region do not

represent the strengths and capabilities of the Indian economy.

The LAC countries are just as keen to increase their exports to India. The large

Indian market size notwithstanding, the LAC countries also look upon India as a

gateway to the larger Asian markets.

At a macro-level the challenge for both regions is to create exportable surplus

and produce goods and render services at the least comparative cost so as to get

a strong foothold in the international market in the face of intense competition.

The Indian and LAC governments would also be called upon to lower the tariff

and non-tariff barriers (NTBs) to ease the bilateral trade flows, even as due efforts

are needed to improve the transport and logistics connectivity between the two

regions to allow for seamless movement of merchandise goods. Robust

logistics support will reduce the cost of

transactions and make Indian and LAC goods

more competitive in each other’s markets.

At the same time, the openness of the factor

market – labour and capital -- deserves closer

attention, wherein investing companies

should have greater freedom in choosing

between domestic and foreign assets. In

fact, the MNCs are moving their operations

with greater ease today around the world in

search of lower costs. Workers too should be

able to move seamlessly between regions.

9

The Colombian government is

holding advanced talks with

India with respect to signing a

Double Taxation Agreement

which will provide further

impetus for India-Colombia

economic relations. There is a

need fo r a f ree t r ade

agreement as well. Tourism would be a key

potential area for both countries to forge

partnerships.

– Liliana Perez

Secretary General, Ministry of Foreign Affairs, Colombia


Conf

eren

ce P

roce

edin

gs

5.66

2.52

0.760.59

0.3 0.29 0.25 0.14 0.14 0.1 0.07

To

tal

BR

AZ

IL

CO

LO

MB

IA

ME

XIC

OA

RG

EN

TIN

A

PE

RU

CH

ILE

VE

NE

ZU

EL

A

TR

INID

AD

HO

ND

UR

AS

GU

AT

EM

AL

A

Source : www.commerce.nic.in

Figure 1 Country-wise share of Indian exports in LAC

Indian technology and Latin America’s natural and social capital make a great fit. There are compelling opportunities for India to enhance its external trade through geographical and product diversification, with particular focus on the LAC markets. Tourism can play a great role in bringing our cultures together.

– Jyotiraditya ScindiaMinister of State for Commerce and Industry, India

distant from India. Alongside, due initiatives are called for to diversify the India-

LAC trade basket.

The impact of this diversification will be seen in the India-LAC trade volumes in

the years to come. As of now, India-LAC bilateral trade at $16 billion compares

poorly with India’s bilateral trade flows with the US ($39.71 billion), EU ($70

billion) and Africa ($38.9 billion).

As such, India-LAC bilateral trade flows have increase four-fold in the last five

years, from US$ 4.2 billion in 2004-05 to US$ 16.1 billion in 2008-09, but the

potentials indicate that there is much more at hand to be achieved with the active

participation of the Indian and LAC governments and industry.

As stated above, geographical diversification

will determine the extent to which India-LAC

bilateral trade will progress in the coming

years. As per 2007-08 trade data, Brazil

accounted for 44% of India’s exports to the

LAC region ($5.66%), with Colombia coming

in next with 13.4% share at 0.76 billion and

Mexico with 11.30% share at 0.59 billion.

Figure 1 illustrates the lop-sided distribution

of Indian exports to LAC region.

Mr. Shubhendu Amitabh, Co-Chairman, CII LAC Committee, and Senior President, The Aditya Birla Group, India; H E Mr. Jyotiraditya Scindia, Minister of State for Commerce and Industry, Government of India and Ms. Liliana Perez Uribe, Secretary General, Ministry of Foreign, Affairs, Republic of Colombia; at Inaugural Session – India and LAC: A New Growth Story

8


Conf

eren

ce P

roce

edin

gs

Indian exports to other key LAC countries

like Argentina, Venezuela, Peru, Chile,

Uruguay, Trinidad & Tobago, El Salvador,

Guatemala, Paraguay, Ecuador and others

are relatively negligible at this stage.

Hence, the panel underl ined the

importance of geographical diversification

in India’s exports to LAC.

Product diversification was cited as another

thrust area for India, in its efforts to increase

its exports to the LAC region. As of date,

mineral fuels, mineral oils and products of their distillation; bituminous

substances; and mineral waxes are the top export items, followed by vehicles

other than railway or tramway; rolling stock and parts and accessories thereof,

and organic chemicals in that order.

In fact, the export product diversification should be aligned to the differentiated

needs of the LAC countries. Currently, Indian exports to the region do not

represent the strengths and capabilities of the Indian economy.

The LAC countries are just as keen to increase their exports to India. The large

Indian market size notwithstanding, the LAC countries also look upon India as a

gateway to the larger Asian markets.

At a macro-level the challenge for both regions is to create exportable surplus

and produce goods and render services at the least comparative cost so as to get

a strong foothold in the international market in the face of intense competition.

The Indian and LAC governments would also be called upon to lower the tariff

and non-tariff barriers (NTBs) to ease the bilateral trade flows, even as due efforts

are needed to improve the transport and logistics connectivity between the two

regions to allow for seamless movement of merchandise goods. Robust

logistics support will reduce the cost of

transactions and make Indian and LAC goods

more competitive in each other’s markets.

At the same time, the openness of the factor

market – labour and capital -- deserves closer

attention, wherein investing companies

should have greater freedom in choosing

between domestic and foreign assets. In

fact, the MNCs are moving their operations

with greater ease today around the world in

search of lower costs. Workers too should be

able to move seamlessly between regions.

9

The Colombian government is

holding advanced talks with

India with respect to signing a

Double Taxation Agreement

which will provide further

impetus for India-Colombia

economic relations. There is a

need fo r a f ree t r ade

agreement as well. Tourism would be a key


partnerships.

– Liliana Perez

Secretary General, Ministry of Foreign Affairs, Colombia


Conf

eren

ce P

roce

edin

gs

5.66

2.52

0.760.59

0.3 0.29 0.25 0.14 0.14 0.1 0.07

To

tal

BR

AZ

IL

CO

LO

MB

IA

ME

XIC

OA

RG

EN

TIN

A

PE

RU

CH

ILE

VE

NE

ZU

EL

A

TR

INID

AD

HO

ND

UR

AS

GU

AT

EM

AL

A

Source : www.commerce.nic.in

Figure 1 Country-wise share of Indian exports in LAC

Again, openness of the capital market has

been another crucial area so far as

international trade in financial assets is

concerned. Government and industry in the

two regions would have to take cognizance

of the emerging patterns in cross-border

capital and labour movement and align the

bilateral engagements suitably.

In terms of investments, India has positioned

itself as an attractive destination for FDI in a

variety of business sectors. Also, Indian

companies are enhancing their global

footprints in the LAC region in areas like IT

software and services, pharmaceuticals and

engineering products. Also, Indian firms have

demonstrated their capabilities to raise

finance overseas for big-ticket investment

abroad. This will aid the Indian investors’

forays into the LAC region.

Within India, the Government has directed

particular attention on physical infrastructure development which has opened up

numerous opportunities for PPP projects. These will serve as investment

opportunities for large LAC infrastructure players to partner with Indian firms and

do business in India.

Sectorally, the IT/ITES sector has witnessed close cooperation between the two

regions. Several leading Indian IT companies have established software

development centres, BPOs and KPOs in the LAC region -- employing many

young Latin Americans -- as part of their efforts to provide 12 hours service from

Latin America and 12 hours from India. Many LAC countries too have

demonstrated high IT capabilities over the years. Hence, the time is ripe for the

Indian and LAC governments and industry to step up the level of IT/ITES

engagements and thereby develop a synergistic partnership to jointly address

the global markets.

Energy development is a key sub-set of India-LAC economic cooperation. In this,

biofuels promotion holds a special place. Brazil has successfully developed and

promoted bio-fuels for widespread domestic use, which India would seek to

emulate.

On the agriculture front, the Mercosur countries are poised to become global

agriculture outsourcing hubs, opening up fresh opportunities for Indian farm

companies to enter into JVs with local players in the region, or even consider

mergers and acquisitions (M&As) there.

The dynamism in the bilateral

engagements is predicated to

the changing global economic

order. Earlier, when people

talked about an emerging

global economic order, the

underlying thought was that

the power equations would

gradually flatten as the developing world aligned

itself with the architecture built by the North

countries. But, recent events have completely

belied this script. The leading lights of the

developing world including India has staked claim

for global leadership roles, both in the political and

economic spheres. The CII India-LAC Conclaves

have played a catalytic role in cementing many

significant project partnerships and joint ventures

between businesses in the two regions

– Shubhendu Amitabh

Co-Chairman, CII LAC Committee and

Senior President, The Aditya Birla Group

10


nfer

ence

Pro

ceed

ings

Also, India is a big potential market for LAC agro-processed foods. Brazil in

particular is focused on tapping this opportunity although the logistic challenges

are there to be tackled.

Tourism is another area that holds much promise for bilateral cooperation. The

volume of annual Indian outbound tourists has crossed the 50-million mark.

Indians are traveling in greater numbers overseas, both for business and leisure.

However, the number of Indian tourists traveling to the LAC regions is relatively

small owing to lack of direct transport connectivity and general lack of awareness

of the tourist destinations in the region.

The LAC countries could gain a larger share of Indian outbound tourism business

with focused efforts. In this, eco-tourism would be an interesting opportunity to

be tapped. The panel cited that tourism will not only bring economic value but

also promote better cultural understanding between the two regions.

At a macro-level it was said that Indian technology and Latin American natural

and social capital would make a great fit. There is great cultural compatibility

between the two regions which makes joint ventures and M&As sustainable

business propositions.

The session also threw light on the investment opportunities in Colombia. It was

cited that Colombia, apart from its strategic geographic location, offers:

ØA stable democracy

ØA strong, stable economy

(according to the Doing Business

Report of the World Bank,

Colombia is the best business

environment in Latin America. FDI

has

ØBiodiversity (Colombia is among

the top biodiverse countries in the

World and is one of the top 10

countries in terms of primary

forests).

In the last seven years, the country has

increase its market access from 233 million

consumers in 2002 to 1.4 billion consumers

in 2010. To strengthen its external trade, the

Colombian government is negotiating 19

International Investment Agreements (IIA)

with 39 countries and 21 Double Taxation

Agreements (DTA) with 22 countries.

11


Conf

eren

ce P

roce

edin

gs

Source : Doing Business Report 2010 – World Bank

Figure 2 Business prospects in Colombia

Doing Business Ranking Variation, 2007-2010*(Change in positions)

42Colombia

Peru

Panama

Mexico

Brazil

Paraguay

Venezuela

Ecuador

Costa Rica

Argentina

Chile

Uruguay

-60 -40 -20 0 20 40 60

9

4

-8

-8

-12

-13

-15

-16

-17

-21

-50

Country(2010)

Colombia

Chile

Mexico

Peru

Panama

Uruguay

Argentina

Costa Rica

Paraguay

Brazil

Ecuador

WorldRanking

37

49

51

56

77

114

118

121

124

129

138


Figure 3 Colombian Business Environment

Country(2010)

Colombia

Peru

Chile

Mexico

Brazil

Argentina

Panama

Venezuela

WorldRanking

5

20

41

41

73

109

109

178

Strength of Investor Protection, 2010

Colombia

Peru

Mexico

Chile

Brazil

Panama

Argentina

Venezuela

0 2 4 6 8 10

8,3

6,7

6,0

6,0

5,3

4,7

4,7

2,3

Again, openness of the capital market has

been another crucial area so far as

international trade in financial assets is

concerned. Government and industry in the

two regions would have to take cognizance

of the emerging patterns in cross-border

capital and labour movement and align the

bilateral engagements suitably.

In terms of investments, India has positioned

itself as an attractive destination for FDI in a

variety of business sectors. Also, Indian

companies are enhancing their global

footprints in the LAC region in areas like IT

software and services, pharmaceuticals and

engineering products. Also, Indian firms have

demonstrated their capabilities to raise

finance overseas for big-ticket investment

abroad. This will aid the Indian investors’

forays into the LAC region.

Within India, the Government has directed

particular attention on physical infrastructure development which has opened up

numerous opportunities for PPP projects. These will serve as investment

opportunities for large LAC infrastructure players to partner with Indian firms and

do business in India.

Sectorally, the IT/ITES sector has witnessed close cooperation between the two

regions. Several leading Indian IT companies have established software

development centres, BPOs and KPOs in the LAC region -- employing many

young Latin Americans -- as part of their efforts to provide 12 hours service from

Latin America and 12 hours from India. Many LAC countries too have

demonstrated high IT capabilities over the years. Hence, the time is ripe for the

Indian and LAC governments and industry to step up the level of IT/ITES

engagements and thereby develop a synergistic partnership to jointly address

the global markets.

Energy development is a key sub-set of India-LAC economic cooperation. In this,

biofuels promotion holds a special place. Brazil has successfully developed and

promoted bio-fuels for widespread domestic use, which India would seek to

emulate.

On the agriculture front, the Mercosur countries are poised to become global

agriculture outsourcing hubs, opening up fresh opportunities for Indian farm

companies to enter into JVs with local players in the region, or even consider

mergers and acquisitions (M&As) there.

The dynamism in the bilateral

engagements is predicated to

the changing global economic

order. Earlier, when people

talked about an emerging

global economic order, the

underlying thought was that

the power equations would

gradually flatten as the developing world aligned

itself with the architecture built by the North

countries. But, recent events have completely

belied this script. The leading lights of the

developing world including India has staked claim

for global leadership roles, both in the political and

economic spheres. The CII India-LAC Conclaves

have played a catalytic role in cementing many

significant project partnerships and joint ventures

between businesses in the two regions

– Shubhendu Amitabh

Co-Chairman, CII LAC Committee and

Senior President, The Aditya Birla Group

10


Conf

eren

ce P

roce

edin

gs

Also, India is a big potential market for LAC agro-processed foods. Brazil in

particular is focused on tapping this opportunity although the logistic challenges

are there to be tackled.

Tourism is another area that holds much promise for bilateral cooperation. The

volume of annual Indian outbound tourists has crossed the 50-million mark.

Indians are traveling in greater numbers overseas, both for business and leisure.

However, the number of Indian tourists traveling to the LAC regions is relatively

small owing to lack of direct transport connectivity and general lack of awareness

of the tourist destinations in the region.

The LAC countries could gain a larger share of Indian outbound tourism business

with focused efforts. In this, eco-tourism would be an interesting opportunity to

be tapped. The panel cited that tourism will not only bring economic value but

also promote better cultural understanding between the two regions.

At a macro-level it was said that Indian technology and Latin American natural

and social capital would make a great fit. There is great cultural compatibility

between the two regions which makes joint ventures and M&As sustainable

business propositions.

The session also threw light on the investment opportunities in Colombia. It was

cited that Colombia, apart from its strategic geographic location, offers:

ØA stable democracy

ØA strong, stable economy

(according to the Doing Business

Report of the World Bank,

Colombia is the best business

environment in Latin America. FDI

has

ØBiodiversity (Colombia is among

the top biodiverse countries in the

World and is one of the top 10

countries in terms of primary

forests).

In the last seven years, the country has

increase its market access from 233 million

consumers in 2002 to 1.4 billion consumers

in 2010. To strengthen its external trade, the

Colombian government is negotiating 19

International Investment Agreements (IIA)

with 39 countries and 21 Double Taxation

Agreements (DTA) with 22 countries.

11


Conf

eren

ce P

roce

edin

gs


Figure 2 Business prospects in Colombia

Doing Business Ranking Variation, 2007-2010*(Change in positions)

42Colombia

Peru

Panama

Mexico

Brazil

Paraguay

Venezuela

Ecuador

Costa Rica

Argentina

Chile

Uruguay

-60 -40 -20 0 20 40 60

9

4

-8

-8

-12

-13

-15

-16

-17

-21

-50

Country(2010)

Colombia

Chile

Mexico

Peru

Panama

Uruguay

Argentina

Costa Rica

Paraguay

Brazil

Ecuador

WorldRanking

37

49

51

56

77

114

118

121

124

129

138


Figure 3 Colombian Business Environment

Country(2010)

Colombia

Peru

Chile

Mexico

Brazil

Argentina

Panama

Venezuela

WorldRanking

5

20

41

41

73

109

109

178

Strength of Investor Protection, 2010

Colombia

Peru

Mexico

Chile

Brazil

Panama

Argentina

Venezuela

0 2 4 6 8 10

8,3

6,7

6,0

6,0

5,3

4,7

4,7

2,3

Colombia has kept its place among the world’s

Top 10 reformers for 4 years. In 2010 it was

recognised as the best business environment in

Latin America (see Figure 2).

In addition, Colombia scores high in terms of

investor protection, borne out as in Figure 3.

Colombia has built up competitiveness in the

automotive sector, textiles, fashion and design

sector, graphic design, communication, and

electric power. The Government is also looking

to promote new and emerging sectors, such as,

BPO, IT & ITES, cosmetics and personal care,

and health tourism. Sectors like biofuels,

forestry and infrastructure are also receiving

close attention.

To bring more international investors into the

country, the Government has put in place 66

approved Free Trade Zones (55 alone were

approved in 2007-09).

In its engagement with India, the Colombian

government is holding advanced talks for

signing a Double Taxation Agreement which will

provide further impetus for India-Colombia

economic relations. Tourism would be a key


partnerships.


Source: DANE (National Accounts), DNP, EIU (Market Indicators & Forecasts)Note: * EIU forecast Note: Last update February 15rd, 2010By Liliana Perez Uribe, Secretary General, Ministry of Foreign, Affairs, Republic of Colombia

Figure 4 Perspectives on Colombian Economic Growth

3.1%

2.2% 2.5%

4.6% 4.7%

5.7%

6.8%7.5%

2.5%

0.3%

2.5%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010*

Colombia World

13

Figure 5 Region-wise share of India’s exports

Year 2009

Others 2.5%

CIS & Baltics1%

Year 2001

CIS & Baltics2.3%

Others 4.3%

LAC 2.2%

Source : DGCIS, MoCI

ThemeIntra-Regional Trade Agreements in LAC, such as MERCOSUR, SICA, NAFTA etc.,

present an opportunity to India to access large common markets for trade and

investment. However, a key challenge remains in terms of harmonization of policies and

procedures and the integration of supply chains among the members. How can India

deepen its engagement with these groups and leverage their strengths to enhance

business partnerships with LAC ?

Proceedings

Even as the India-LAC trade flows have appreciably grown year-on-year, it has

been cited that the achievements thus far are nowhere near the true potentials.

The bilateral trade flows have increased, as indicated in Figure 5, wherein LAC

share of India’s exports has increased from 2.2% in 2001 to 3.3% in 2009.

Overall, Indian exports are increasingly

moving in the direction of South countries,

particularly in Asia, Africa and LAC region.

So, it is expected that the India-LAC trade

will significantly increase from the current

level (FY09) of Indian exports of $6.2 billion,

and imports of $10 billion.

Session Chair Mr Roberto Paranhos do Rio Branco, President, Brazil-

India Chamber of Commerce and Partner/Director, Rede

Achat LTDA, Brazil

Panel Mr Prahalathna Iyer, General Manager, EXIM Bank of

India

H.E. Mr Hans Dannenberg Castellanos, Ambassador of

the Dominican Republic in India

H.E. Mr Ernesto Carlos Alvarez, Ambassador of

Argentina in India

Mr Jose Anders Martinez, Vice-Chairman, India-Mexico

Business, Chamber and Business Director, Atento,

Mexico

LEVERAGING REGIONAL

ENGAGEMENT TO STRENGTHEN

BUSINESS PARTNERSHIP


Conf

eren

ce P

roce

edin

gs

14

India’s major exports items to the LAC include petroleum products, transport

equipment, organic chemicals, pharma products, and electrical machinery and

equipment. Major imports items are petroleum crude, copper & mineral ores,

vegetable oils (edible), iron & steel, electronic goods and non-electrical

machinery, and fertilizers.

The major sources of imports are from Venezuela, Mexico, Chile, Brazil,

Argentina and Peru, whereas the major export destinations are Brazil, Mexico,

Chile, Colombia, Argentina, and Trinidad & Tobago.

In terms of Indian investments in the LAC countries, the focus areas are: steel,

pharmaceuticals, chemicals, engineering products, software, petroleum, mining

and biotechnology.

As stated earlier in this report, the Government of India ‘Focus LAC’ programme

has helped in building the bilateral trade and investment ties. In line with the GoI

strategy, countries in the LAC region constitute a focus region for Exim Bank of

India. A critical component of Exim Bank’s strategy has been to promote and

support two-way trade and investment flows by creating an enabling

environment.

Exim Bank of India has played a key role in Indian companies securing key

projects in the LAC countries by extending lines of credit (LOC) and other

financing support to the host countries.

Mr. Prahalathan Iyer, General Manager, EXIM Bank, India; H.E. Ernesto Carlos Alvarez, Ambassador of Argentina in India; Mr. Roberto Paranhos do Rio Branco, President, Brazil-India Chamber of Commerce and Partner/Director, Rede Achat LTDA, Brazil; H.E. Mr. Hans Dannenberg Castellanos, Ambassador of the Dominican Republic in India, Mr. José Andres Martinez, Vice Chairman, India-Mexico Business Chamber and Business Director, Atento, Mexico in Session on Leveraging Regional Engagement to Strengthen Business Partnerships


nfer

ence

Pro

ceed

ings

The Bank has cited that the potential areas

of investments in the LAC region are:

automobiles, energy/biofuels, mining, IT,

pharmaceuticals, ICT, pharmaceuticals

/chemicals, autoparts, biotechnology,

minerals, engineering, machinery, steel and

petroleum products.

The India-LAC bilateral trade and

investment flows are supported by key

bilateral and multilateral agreements, such

as: PTA with Mercosur, IBSA initiative and

BRIC initiative.

The panel also observed that while in the

past the two biggest barriers to trade and

investment relations between LACs and

India were language and distance, the issue

of language has been largely sorted with

many LAC professionals and decision

makers becoming conversant in English.

Besides, the advancement of information

technology has provided the benefit of

translation and the Internet interface has

given the opportunity of conducting

business without stepping out of home.

The session also highlighted investment

opportunities in select LAC regions

–Buenos Aires in Argentina, Mexico and

Brazil.

It was cited that with more LAC countries

opening embassies in India, including

Dominican Republic, the prospects of

bilateral trade and investments has grown

manifold. Five years ago only 10 LAC

countries had embassies in India. However,

the last five years have seen 5 LAC

countries, including Dominican Republic,

opening their embassies in India, which is a

sign of realisation of the importance of

diplomatic ties between India and Latin

America and Caribbean.

15

Figure 7 Projects supported in LAC region by EXIM Bank of India

ØEthanol plant project (Colombia)

ØPharmaceuticals (Mexico, Caribbean)

ØTextile (Mexico, Peru, Argentina)

ØPower Transmission (Brazil)

ØBauxite Mining (Brazil, British Virgin Islands)

ØAtlantic Railway network (Colombia)

ØEl Nino Emergency Assistance Project (Guyana)

ØShipping (Cayman Islands)

Figure 6Sixteen (16) Operative Exam Bank of India, Line of Credit amounting to $173.65 million in LAC region

They include

ØUS$ 30 million to the Government of Honduras

Ø10 million to Central American Bank for Economic Integration (CABEI)

ØUS$ 10 million to Corporacion Andina de Fomento (CAF)

ØUS$ 10 million to Banco de Comercio Exterior de Colombia (Bancoldex), Colombia

ØUS$ 8 million to Republic Bank Ltd., Trinidad & Tobago

ØUS$ 21.1 million (US$ 19 mn & US$ 2.1 mn) to the Government of Guyana

ØUS$ 10 million to Banco Nacional De Comercio Exterior (Bancomext), Mexico

ØUS$ 10 million to Banco Bradesco, Brazil

ØUS$ 47.05 million (US$ 4.3 m, US$ 5.76 mn, US$ 10.59, US$ 16 mn & US$ 10.4 mn) to the Government of Suriname

ØUS$ 10 million to Unibanco, Brazil

ØUS$ 7.5 million to Government of Jamaica

H.E. Mr Hans Dannenberg Castellanos,Ambassador of the Dominican Republic in India

Last five years have seen 5 LAC

countries, including Dominican

Republic, opening their embassies in

India, which is a sign of realisation of

the importance of diplomatic ties

between India and LAC


Conf

eren

ce P

roce

edin

gs

14

India’s major exports items to the LAC include petroleum products, transport

equipment, organic chemicals, pharma products, and electrical machinery and

equipment. Major imports items are petroleum crude, copper & mineral ores,

vegetable oils (edible), iron & steel, electronic goods and non-electrical

machinery, and fertilizers.

The major sources of imports are from Venezuela, Mexico, Chile, Brazil,

Argentina and Peru, whereas the major export destinations are Brazil, Mexico,

Chile, Colombia, Argentina, and Trinidad & Tobago.

In terms of Indian investments in the LAC countries, the focus areas are: steel,

pharmaceuticals, chemicals, engineering products, software, petroleum, mining

and biotechnology.

As stated earlier in this report, the Government of India ‘Focus LAC’ programme

has helped in building the bilateral trade and investment ties. In line with the GoI

strategy, countries in the LAC region constitute a focus region for Exim Bank of

India. A critical component of Exim Bank’s strategy has been to promote and

support two-way trade and investment flows by creating an enabling

environment.

Exim Bank of India has played a key role in Indian companies securing key

projects in the LAC countries by extending lines of credit (LOC) and other

financing support to the host countries.

Mr. Prahalathan Iyer, General Manager, EXIM Bank, India; H.E. Ernesto Carlos Alvarez, Ambassador of Argentina in India; Mr. Roberto Paranhos do Rio Branco, President, Brazil-India Chamber of Commerce and Partner/Director, Rede Achat LTDA, Brazil; H.E. Mr. Hans Dannenberg Castellanos, Ambassador of the Dominican Republic in India, Mr. José Andres Martinez, Vice Chairman, India-Mexico Business Chamber and Business Director, Atento, Mexico in Session on Leveraging Regional Engagement to Strengthen Business Partnerships


Conf

eren

ce P

roce

edin

gs

The Bank has cited that the potential areas

of investments in the LAC region are:

automobiles, energy/biofuels, mining, IT,

pharmaceuticals, ICT, pharmaceuticals

/chemicals, autoparts, biotechnology,

minerals, engineering, machinery, steel and

petroleum products.

The India-LAC bilateral trade and

investment flows are supported by key

bilateral and multilateral agreements, such

as: PTA with Mercosur, IBSA initiative and

BRIC initiative.

The panel also observed that while in the

past the two biggest barriers to trade and

investment relations between LACs and

India were language and distance, the issue

of language has been largely sorted with

many LAC professionals and decision

makers becoming conversant in English.

Besides, the advancement of information

technology has provided the benefit of

translation and the Internet interface has

given the opportunity of conducting

business without stepping out of home.

The session also highlighted investment

opportunities in select LAC regions

–Buenos Aires in Argentina, Mexico and

Brazil.

It was cited that with more LAC countries

opening embassies in India, including

Dominican Republic, the prospects of

bilateral trade and investments has grown

manifold. Five years ago only 10 LAC

countries had embassies in India. However,

the last five years have seen 5 LAC

countries, including Dominican Republic,

opening their embassies in India, which is a

sign of realisation of the importance of

diplomatic ties between India and Latin

America and Caribbean.

15

Figure 7 Projects supported in LAC region by EXIM Bank of India

ØEthanol plant project (Colombia)

ØPharmaceuticals (Mexico, Caribbean)

ØTextile (Mexico, Peru, Argentina)

ØPower Transmission (Brazil)

ØBauxite Mining (Brazil, British Virgin Islands)

ØAtlantic Railway network (Colombia)

ØEl Nino Emergency Assistance Project (Guyana)

ØShipping (Cayman Islands)

Figure 6Sixteen (16) Operative Exam Bank of India, Line of Credit amounting to $173.65 million in LAC region

They include

ØUS$ 30 million to the Government of Honduras

Ø10 million to Central American Bank for Economic Integration (CABEI)

ØUS$ 10 million to Corporacion Andina de Fomento (CAF)

ØUS$ 10 million to Banco de Comercio Exterior de Colombia (Bancoldex), Colombia

ØUS$ 8 million to Republic Bank Ltd., Trinidad & Tobago

ØUS$ 21.1 million (US$ 19 mn & US$ 2.1 mn) to the Government of Guyana

ØUS$ 10 million to Banco Nacional De Comercio Exterior (Bancomext), Mexico

ØUS$ 10 million to Banco Bradesco, Brazil

ØUS$ 47.05 million (US$ 4.3 m, US$ 5.76 mn, US$ 10.59, US$ 16 mn & US$ 10.4 mn) to the Government of Suriname

ØUS$ 10 million to Unibanco, Brazil

ØUS$ 7.5 million to Government of Jamaica


Last five years have seen 5 LAC

countries, including Dominican

Republic, opening their embassies in

India, which is a sign of realisation of

the importance of diplomatic ties

between India and LAC


Conf

eren

ce P

roce

edin

gs

16

In terms of investment opportunities in the LAC region,

the technology district in Buenos Aires came in to sharp

focus. Overall, Buenos Aires was cited to offer: (i)

educational level comparable to average OECD level, (ii)

advanced technical capacities, (iii) high level training

facilities, (iv) a large bilingual population, (v) a large urban

transport network, and (vi) three international airports.

Besides, investors in the city’s technology district could avail of:

ØIncentives: municipal tax exemptions, subsidies in training expenses

and credits from Banco Cuidad

ØModern infrastructure

ØEducation: tax benefits for educational bodies setting up in the district,

training plans and scholarships.

Engagement with Argentina would also open up the investors’ access to the

larger Mercosur markets. It was said that Indian companies would be advised to

prospect for joint ventures in Argentina.

Mexico has been a key business partner for India, especially since the former is

party to the North America Free Trade Agreement (NAFTA) which was signed in

1992 and came into force in 1994 between Canada, USA and Mexico.

The agreement represented a watershed in global trade policy, not just because

of the size of the free trade area it created, but also with regard to the

comprehensiveness of the agreement, which covered not just merchandise

trade but also issues related to investment, labour markets, and environmental

policies. Perhaps the most significant aspect of the agreement, however, was

the fact that it was struck between a developing country and highly developed

economies.

The result has been to a dramatic increase in trade and financial flows among the

NAFTA partners, making North America one of the most economically integrated

regions in the world.

Against this backdrop, Mexico offers (i) access to qualified labour, (ii) specific

clusters of industrial activity, (iii) participation in projects guided by the National

Infrastructure Program 2007-2012.

Moving on to Brazil, the comparative advantages of investing in the country are:

ØBrazil has become an international creditor and is now in investment

grade

ØInflation is under control at 6.8%

ØInternal debt is decreasing as a percentage of GDP: 40.4% in 2008 x

50.4% in 2002

H.E. Mr Ernesto Carlos Alvarez,Ambassador of Argentina in India

Indian business houses should come

forward and look beyond trade

Conf

eren

ce P

roce

edin

gsth4 CII India-Latin America and Caribbean (LAC) Conclave

ØExports are growing fast: 20% in 2008 (August 07 - July/08)

ØConsumption is grown by 7.5% in 2008

ØUnemployment is decreasing and wages are growing

ØIncome concentration is improving: 20 million people left classes E and D

to class C in the last 5 years

ØCredit revolution is underway, reaching 36% of GDP

ØCapital goods production is growing at 14.8% p.a.

ØAn Economic Acceleration Program is underway, supported by $312

billions in 5 years.

The panel also pointed to the Preferential Trade Agreement between Mercosur

and India as key to building India-LAC economic ties. The PTA was concluded in

New Delhi on January 25, 2004, and came into force on June 1.

The agreement covers 450 products from each side, totaling about 900 tariff

lines. Annex I of the agreement contains the list of products offered by Mercosur

to India, with their preference margins. The Mercosur offered preferences on

452 tariff lines. The 450 items included by India are distributed among: the

chemical industry (120 items), machinery, boilers and mechanical appliances (90

items), textiles (40 items) and hides and skins (35 items).

The margins of preferences provided in the Agreement are concentrated around

10 and 20% (for some tariff lines, it is expected a margin of 100%).

It was said that the instrument should facilitate subsequent negotiations for the

establishment of a Free Trade Area of Mercosur - India.

The potential of the India-LAC regional engagement was realigned in ‘CII

Accelerated Marketing Programme Initiative for Latin America & Caribbean

Region. A Survey was planned prior to the Conclave, in February 2010, among CII

Membership to ascertain challenges faced by our membership while doing

business in the region, based on industry feedback, the agenda was set for the

4th CII India LAC Conclave.

The companies already present in LAC region would like to expand to

neighboring markets and establish assembly units, while others would like to

explore new prospects. There is need to build greater trust and confidence

among these participating entities.

In terms of expansion, the key challenges are as under:

ØArgentina’s market is restricted; does not allow free imports of tractors

and other products of Indian origin.

ØArgentina has come up with Import License to restrict import of tractors.

High import duty of 14% exists in Argentina and Brazil.

17

Conf

eren

ce P

roce

edin

gs


16

In terms of investment opportunities in the LAC region,

the technology district in Buenos Aires came in to sharp

focus. Overall, Buenos Aires was cited to offer: (i)

educational level comparable to average OECD level, (ii)

advanced technical capacities, (iii) high level training

facilities, (iv) a large bilingual population, (v) a large urban

transport network, and (vi) three international airports.

Besides, investors in the city’s technology district could avail of:

ØIncentives: municipal tax exemptions, subsidies in training expenses

and credits from Banco Cuidad

ØModern infrastructure

ØEducation: tax benefits for educational bodies setting up in the district,

training plans and scholarships.

Engagement with Argentina would also open up the investors’ access to the

larger Mercosur markets. It was said that Indian companies would be advised to

prospect for joint ventures in Argentina.

Mexico has been a key business partner for India, especially since the former is

party to the North America Free Trade Agreement (NAFTA) which was signed in

1992 and came into force in 1994 between Canada, USA and Mexico.

The agreement represented a watershed in global trade policy, not just because

of the size of the free trade area it created, but also with regard to the

comprehensiveness of the agreement, which covered not just merchandise

trade but also issues related to investment, labour markets, and environmental

policies. Perhaps the most significant aspect of the agreement, however, was

the fact that it was struck between a developing country and highly developed

economies.

The result has been to a dramatic increase in trade and financial flows among the

NAFTA partners, making North America one of the most economically integrated

regions in the world.

Against this backdrop, Mexico offers (i) access to qualified labour, (ii) specific

clusters of industrial activity, (iii) participation in projects guided by the National

Infrastructure Program 2007-2012.

Moving on to Brazil, the comparative advantages of investing in the country are:

ØBrazil has become an international creditor and is now in investment

grade

ØInflation is under control at 6.8%

ØInternal debt is decreasing as a percentage of GDP: 40.4% in 2008 x

50.4% in 2002

H.E. Mr Ernesto Carlos Alvarez,Ambassador of Argentina in India

Indian business houses should come

forward and look beyond trade

Conf

eren

ce P

roce

edin

gs


ØExports are growing fast: 20% in 2008 (August 07 - July/08)

ØConsumption is grown by 7.5% in 2008

ØUnemployment is decreasing and wages are growing

ØIncome concentration is improving: 20 million people left classes E and D

to class C in the last 5 years

ØCredit revolution is underway, reaching 36% of GDP

ØCapital goods production is growing at 14.8% p.a.

ØAn Economic Acceleration Program is underway, supported by $312

billions in 5 years.

The panel also pointed to the Preferential Trade Agreement between Mercosur

and India as key to building India-LAC economic ties. The PTA was concluded in

New Delhi on January 25, 2004, and came into force on June 1.

The agreement covers 450 products from each side, totaling about 900 tariff

lines. Annex I of the agreement contains the list of products offered by Mercosur

to India, with their preference margins. The Mercosur offered preferences on

452 tariff lines. The 450 items included by India are distributed among: the

chemical industry (120 items), machinery, boilers and mechanical appliances (90

items), textiles (40 items) and hides and skins (35 items).

The margins of preferences provided in the Agreement are concentrated around

10 and 20% (for some tariff lines, it is expected a margin of 100%).

It was said that the instrument should facilitate subsequent negotiations for the

establishment of a Free Trade Area of Mercosur - India.

The potential of the India-LAC regional engagement was realigned in ‘CII

Accelerated Marketing Programme Initiative for Latin America & Caribbean

Region. A Survey was planned prior to the Conclave, in February 2010, among CII

Membership to ascertain challenges faced by our membership while doing

business in the region, based on industry feedback, the agenda was set for the

4th CII India LAC Conclave.

The companies already present in LAC region would like to expand to

neighboring markets and establish assembly units, while others would like to

explore new prospects. There is need to build greater trust and confidence

among these participating entities.

In terms of expansion, the key challenges are as under:

ØArgentina’s market is restricted; does not allow free imports of tractors

and other products of Indian origin.

ØArgentina has come up with Import License to restrict import of tractors.

High import duty of 14% exists in Argentina and Brazil.

17

Conf

eren

ce P

roce

edin

gs


18

ØVenezuela has restricted forex release against order / granted Import

License. Import duty of 6% on tractors puts pressure on the prices.

Venezuela is required to release forex authorization to promote trade

between two countries.

ØNegotiation of preferential duty structure (PTA) for Indian products with

the “Focus” LAC countries, especially Argentina & Brazil, and simplified

custom clearance procedures.

ØLAC countries would benefit from free trade / preferential agreements

with each other. These “trade bloc/ groupings” do not recognise

regulatory accreditation made by their member country in the respective

“trade bloc”.

ØOpaque regulations and long delays in dealing with administrative issues

is a hurdle. Both sides have fairly strong governmental intervention in

business, with a high level of controls and clearances.

ØIn the absence of institutional partnership with IABD (Inter-American

Development Bank) - a major regional organisation contributing loans to

infrastructure projects in the region -- Indian companies are not allowed

to take part in bids.

ØLack of information on how to do business in LAC and India adds to

business risks and deters businesses from exploring opportunities.

There is also an emerging need for India to build its engagement with the

different regional trade groupings in LAC, which are:

Mercosur, Andean Community, NAFTA, Central American Integration System

(SICA) G3 Free Trade Agreement (DR-CAFTA), Caribbean Community

(CARICOM) –Central American Common Market (CACM) – Guatemala,

Honduras, El Salvador, Nicaragua and Costa Rica, Enterprise for the American

Initiative (EAI) Latin American Integration Association (LAIA)

The deliberations during the conclave has further highlighted the need for:

ØParticipating governments to expand engagement through new

cooperation arrangements and building upon those already agreed.

ØOperational PTAs with Mercosur and Chile to be expanded into larger

agreements covering all areas of interest such as trade in goods, trade in

services, movement of people, investments, mutual recognition of

standards, harmonization of customs procedures, etc.

ØComprehensive Economic Cooperation Agreements, with regional blocs

as well as bilaterally, should be set in motion.

ØFunds available under Focus LAC could be enhanced to cover trade

offices/representation from industry associations with strong presence

in the region. Professional offices dedicated to trade promotion could

reduce the information gap and provide assistance in negotiating

markets and regulations.


nfer

ence

Pro

ceed

ings

ØThere is a good case for investment-led trading. Companies could set up

their own manufacturing centers to access domestic and regional

markets, adding value to local and imported intermediate goods for

ultimate delivery to either India or to other markets. This would expand

opportunities beyond just trading on available goods.

ØStudy prospects for India to partner with Inter-American Development

Bank (IABD) possibly through Exim Bank.

ØSet up LAC Trade Centers in select LAC countries/cities. A rotational

exhibition, wherein everything else is dynamic except the secretariat

which remains at the respective center to build knowledge resource - an

ideal option.

ØIdentify local partners who can sell and distribute products through

existing "Bonded Distribution Center/s, free ports, and would help to

establish local operating subsidiaries and/or joint ventures, in strict

confidence.

ØFacilitate and incubate new and direct shipping routes and direct flights,

with the support of GoI, public sector interventions, PPP and financial

backing.

The expectations were set for Indian Missions in LAC, in terms of

standardisation of information dissemination process, involving:

ØStandardization of websites and content format for Indian audience with

up to date event calendar; relevant fairs / exhibition.

ØEmphasis on Supply Chain Management and business logistical inputs

and travel information including most convenient routes/flights

ØReal-time trade Information on the existing import sources of Focus

products & Services.

ØDigital Directory on Focus Sector/Service/ Segment of LAC with relevant

trade information.

ØProvisions for Digital showcasing of interested Indian SMEs on the

Website (A virtual market place)

ØCatalyzing execution of LAC-Trade Center Initiative for GoI; Setting up of

rotational exhibition representing different industries and services.

19

MOU signed between India and Colombia for business development cooperation


Conf

eren

ce P

roce

edin

gs

On April 30, 2010, Dr. Rahul Khullar,

Secretary, Department of Commerce,

Ministry of Commerce and Industry,

Government of India and H.E. Dr. Juan

Alfredo Pinto Saavedra, Ambassador of

Co lombia in Ind ia s igned the

Memorandum of Understanding on

trade facilitation and investment. The

agreement allows for a Permanent Join Committee to assess

each year the results of balance of trade and investment flows,

and to take steps to remove obstacles and facilitate the

exchange and presence of Indian companies in Colombia.

Source: Embassy of Colombia in India

18

ØVenezuela has restricted forex release against order / granted Import

License. Import duty of 6% on tractors puts pressure on the prices.

Venezuela is required to release forex authorization to promote trade

between two countries.

ØNegotiation of preferential duty structure (PTA) for Indian products with

the “Focus” LAC countries, especially Argentina & Brazil, and simplified

custom clearance procedures.

ØLAC countries would benefit from free trade / preferential agreements

with each other. These “trade bloc/ groupings” do not recognise

regulatory accreditation made by their member country in the respective

“trade bloc”.

ØOpaque regulations and long delays in dealing with administrative issues

is a hurdle. Both sides have fairly strong governmental intervention in

business, with a high level of controls and clearances.

ØIn the absence of institutional partnership with IABD (Inter-American

Development Bank) - a major regional organisation contributing loans to

infrastructure projects in the region -- Indian companies are not allowed

to take part in bids.

ØLack of information on how to do business in LAC and India adds to

business risks and deters businesses from exploring opportunities.

There is also an emerging need for India to build its engagement with the

different regional trade groupings in LAC, which are:

Mercosur, Andean Community, NAFTA, Central American Integration System

(SICA) G3 Free Trade Agreement (DR-CAFTA), Caribbean Community

(CARICOM) –Central American Common Market (CACM) – Guatemala,

Honduras, El Salvador, Nicaragua and Costa Rica, Enterprise for the American

Initiative (EAI) Latin American Integration Association (LAIA)

The deliberations during the conclave has further highlighted the need for:

ØParticipating governments to expand engagement through new

cooperation arrangements and building upon those already agreed.

ØOperational PTAs with Mercosur and Chile to be expanded into larger

agreements covering all areas of interest such as trade in goods, trade in

services, movement of people, investments, mutual recognition of

standards, harmonization of customs procedures, etc.

ØComprehensive Economic Cooperation Agreements, with regional blocs

as well as bilaterally, should be set in motion.

ØFunds available under Focus LAC could be enhanced to cover trade

offices/representation from industry associations with strong presence

in the region. Professional offices dedicated to trade promotion could

reduce the information gap and provide assistance in negotiating

markets and regulations.


Conf

eren

ce P

roce

edin

gs

ØThere is a good case for investment-led trading. Companies could set up

their own manufacturing centers to access domestic and regional

markets, adding value to local and imported intermediate goods for

ultimate delivery to either India or to other markets. This would expand

opportunities beyond just trading on available goods.

ØStudy prospects for India to partner with Inter-American Development

Bank (IABD) possibly through Exim Bank.

ØSet up LAC Trade Centers in select LAC countries/cities. A rotational

exhibition, wherein everything else is dynamic except the secretariat

which remains at the respective center to build knowledge resource - an

ideal option.

ØIdentify local partners who can sell and distribute products through

existing "Bonded Distribution Center/s, free ports, and would help to

establish local operating subsidiaries and/or joint ventures, in strict

confidence.

ØFacilitate and incubate new and direct shipping routes and direct flights,

with the support of GoI, public sector interventions, PPP and financial

backing.

The expectations were set for Indian Missions in LAC, in terms of

standardisation of information dissemination process, involving:

ØStandardization of websites and content format for Indian audience with

up to date event calendar; relevant fairs / exhibition.

ØEmphasis on Supply Chain Management and business logistical inputs

and travel information including most convenient routes/flights

ØReal-time trade Information on the existing import sources of Focus

products & Services.

ØDigital Directory on Focus Sector/Service/ Segment of LAC with relevant

trade information.

ØProvisions for Digital showcasing of interested Indian SMEs on the

Website (A virtual market place)

ØCatalyzing execution of LAC-Trade Center Initiative for GoI; Setting up of

rotational exhibition representing different industries and services.

19

MOU signed between India and Colombia for business development cooperation


Conf

eren

ce P

roce

edin

gs

On April 30, 2010, Dr. Rahul Khullar,

Secretary, Department of Commerce,

Ministry of Commerce and Industry,

Government of India and H.E. Dr. Juan

Alfredo Pinto Saavedra, Ambassador of

Co lombia in Ind ia s igned th e

Memorandum of Understanding on

trade facilitation and investment. The

agreement allows for a Permanent Join Committee to assess

each year the results of balance of trade and investment flows,

and to take steps to remove obstacles and facilitate the

exchange and presence of Indian companies in Colombia.

Source: Embassy of Colombia in India

20

Proceedings

As has been cited earlier in this report, South is the new North. The South

countries hold the growth drivers of the global economy by virtue of their

possessing significant food and energy resources. However, the South

countries need to come to terms with this reality and build robust South-South

Cooperation.

Agriculture lends itself as a key cooperation area, especially between India and

geographically expansive LAC countries like Argentina and Brazil. The panel

suggested that India should be reaching out to LAC for outsourced agriculture

solutions, given that the country could soon become a net food importer in the

face of a growing population that will reach 1.6 billion by 2050. LAC countries like

Argentina would be the ideal destinations for outsourcing India’s food needs.

India is already a net importer of edible oils and pulses. The country is likely to be

facing 0.5 million tones shortage of edible oils in the next two decades and is

expected to become a net food importer by 2030 refer figure 8.

As such, agricultural supply in India is maintaining a linear growth, whereas the

demand for food and agricultural products is growing at an exponential rate.

India’s efforts to enhance the agriculture production will be circumscribed by the

small land holdings. The average farm size in the country is a mere 1.0-1.5 acre,

and the farmers have to contend with several mal-incentives like land ceiling,

government-enforced minimum support price, limited access to easy credit, etc.

A National Sample Survey Organisation (NSSO) survey conducted in India found

that 45% of farmers in India would prefer not to be engaged in this field if given a

choice. Water resources in India are also running thin, with the agrarian belts like

Punjab experiencing rapidly falling groundwater levels and soils turning saline.

The country is facing an acute water crisis, which is in contrast to the Latin

American countries that collectively possesses 26% of the world’s freshwater

resources.

Session Chair Mr Dave Ramaswamy, Partner, Allied Venture, Argentina

Panel H.E. Mr Genaro Pappalardo, Ambassador of Paraguay in

India

H.E. Mr Javier Paulinich, Ambassador of Peru in India

Mr Agustin Ontaneda, General Manager, Take Business

Importacion Exportacion, Ecuador

SECTORAL SYNERGIES IN

AGRICULTURE & FOOD PROCESSING


nfer

ence

Pro

ceed

ings

21

With expected diversion of water from the source point of the rivers

Brahmaputra, Kosi and Ghandak in Tibet, many parts of the agrarian states in

India could face acute water shortage in the coming years. Hence, agriculture

outsourcing is an option to be considered.

In outsourcing food production to LAC, the key advantages cited are: the low

population base and limited domestic demand, diverse agro-climatic zones,

fertile soils, access to modern technologies and favourable policies that enable

many LAC countries to be key agri-produce exporters.

Indian companies could invest in Argentina’s agricultural sector, keeping in view

the relatively high RoI of 20-25% (annual based on 5 yr average), low cost of land

($200-1500/acre, scalability and low population stress.

Drawing the parallels between the

agriculture sector in Argentina and the IT

sector in India, it was said that both are

export-driven, world class, guided by

robust eco-systems (supported by

uni versit ies, scient ists and service

providers), and low capital costs.

I t It was cited that while India is also looking

t o promote agriculture outsourcing in Africa,

the LAC region would prove to be a better

Mr. Agustin Ontaneda, General Manager, Take Business Importacion Exportacion; H.E. Mr. Genaro Pappalardo, Ambassador of Paraguay in India; Mr. Dave Ramaswamy, Partner, Allied Venture, Argentina;H.E. Mr. Javier Paulinich, Ambassador of Peru in India during a Session on India & LAC: Sectoral Synergies in Agriculture & Food Processing

Source: World watch InstituteBy Dave Ramaswamy, Partner, Allied Venture, Argentina

Figure 8 India, a net food importer

1

1

3

0

6

8

1

6

0

6

9

9

12

15

19

21

26

32

45

0 5 10 15 20 25 30 35 40 45 50

Bangladesh

Ethiopia & Eritrea

Indonesia

Nigeria

Mexico

Egypt

Pakistan

Iran

India

China

Million tons

2030

1990


Conf

eren

ce P

roce

edin

gs

20

Proceedings

As has been cited earlier in this report, South is the new North. The South

countries hold the growth drivers of the global economy by virtue of their

possessing significant food and energy resources. However, the South

countries need to come to terms with this reality and build robust South-South

Cooperation.

Agriculture lends itself as a key cooperation area, especially between India and

geographically expansive LAC countries like Argentina and Brazil. The panel

suggested that India should be reaching out to LAC for outsourced agriculture

solutions, given that the country could soon become a net food importer in the

face of a growing population that will reach 1.6 billion by 2050. LAC countries like

Argentina would be the ideal destinations for outsourcing India’s food needs.

India is already a net importer of edible oils and pulses. The country is likely to be

facing 0.5 million tones shortage of edible oils in the next two decades and is

expected to become a net food importer by 2030 refer figure 8.

As such, agricultural supply in India is maintaining a linear growth, whereas the

demand for food and agricultural products is growing at an exponential rate.

India’s efforts to enhance the agriculture production will be circumscribed by the

small land holdings. The average farm size in the country is a mere 1.0-1.5 acre,

and the farmers have to contend with several mal-incentives like land ceiling,

government-enforced minimum support price, limited access to easy credit, etc.

A National Sample Survey Organisation (NSSO) survey conducted in India found

that 45% of farmers in India would prefer not to be engaged in this field if given a

choice. Water resources in India are also running thin, with the agrarian belts like

Punjab experiencing rapidly falling groundwater levels and soils turning saline.

The country is facing an acute water crisis, which is in contrast to the Latin

American countries that collectively possesses 26% of the world’s freshwater

resources.

Session Chair Mr Dave Ramaswamy, Partner, Allied Venture, Argentina

Panel H.E. Mr Genaro Pappalardo, Ambassador of Paraguay in

India

H.E. Mr Javier Paulinich, Ambassador of Peru in India

Mr Agustin Ontaneda, General Manager, Take Business

Importacion Exportacion, Ecuador


AGRICULTURE & FOOD PROCESSING


Conf

eren

ce P

roce

edin

gs

21

With expected diversion of water from the source point of the rivers

Brahmaputra, Kosi and Ghandak in Tibet, many parts of the agrarian states in

India could face acute water shortage in the coming years. Hence, agriculture

outsourcing is an option to be considered.

In outsourcing food production to LAC, the key advantages cited are: the low

population base and limited domestic demand, diverse agro-climatic zones,

fertile soils, access to modern technologies and favourable policies that enable

many LAC countries to be key agri-produce exporters.

Indian companies could invest in Argentina’s agricultural sector, keeping in view

the relatively high RoI of 20-25% (annual based on 5 yr average), low cost of land

($200-1500/acre, scalability and low population stress.

Drawing the parallels between the

agriculture sector in Argentina and the IT

sector in India, it was said that both are

export-driven, world class, guided by

robust eco-systems (supported by

uni versit ies, scient ists and service

providers), and low capital costs.

I t It was cited that while India is also looking

t o promote agriculture outsourcing in Africa,

the LAC region would prove to be a better

Mr. Agustin Ontaneda, General Manager, Take Business Importacion Exportacion; H.E. Mr. Genaro Pappalardo, Ambassador of Paraguay in India; Mr. Dave Ramaswamy, Partner, Allied Venture, Argentina;H.E. Mr. Javier Paulinich, Ambassador of Peru in India during a Session on India & LAC: Sectoral Synergies in Agriculture & Food Processing

Source: World watch InstituteBy Dave Ramaswamy, Partner, Allied Venture, Argentina

Figure 8 India, a net food importer

1

1

3

0

6

8

1

6

0

6

9

9

12

15

19

21

26

32

45

0 5 10 15 20 25 30 35 40 45 50

Bangladesh

Ethiopia & Eritrea

Indonesia

Nigeria

Mexico

Egypt

Pakistan

Iran

India

China

Million tons

2030

1990


Conf

eren

ce P

roce

edin

gs

23

ØBiodiversity - to meet demand for

new farm products.

As of now, the main Indian farm imports

from Peru include beans, spinosa

caesalpinea (tara), grapes, lima beans, and

asparagus. And, the main farm Indian

exports into Peru include: cotton, onion dry,

and soja.

It was cited that exotic nutritional products

made in Peru, such as, Maca, Aguaymanto,

Camu Camu, Kiwicha, Sacha Inchi, and

Algarrobo will find ready markets in India.

The panel informed that Indian businesses

are invited to part icipate in the

Expoalimentaria Fair 2010 being organised

in Lima during September 22-24 this year.

Ecuador could be also become a strong

agriculture base for Indian investors.

Highlighting this, the panel observed that

bilateral trade volume at $70 million could

increase further from the current levels.

The India- Ecuador Chamber of Commerce,

Trade & Tourism has played a pioneering

role in providing advisory services,

consultancy, facilitation services, etc., and

in enhancing the bilateral business

exchanges.

It was suggested that India and LAC

countries should bring about better

coordination of safety control bodies

similar to the IBSA scheme and increase

cooperation to confront food security

crisis. LAC could also be a source of

traditional and exotic products of high

nutritional and protein value. India should

look to organise more commercial

missions to LAC and participate in

specialised fairs in the region.

Exim Bank of India, Projects Supported in LAC Region

Success Stories - Supply of Crash Fire Tenders to Suriname

Ten fire tenders have been supplied to Suriname under GoI Line of Credit worth US$ 4.3 million. These crash fire tenders have been designed and modified by BEML to suit local conditions in Suriname. The fire tenders, built on TATRA BEML Chasis have powerful engines developing 300 KW power(12,667 cc) and are capable of negotiating difficult terrain and rough surfaces at high speeds.

Success Stories – Guyana Traffic Signalling System

Success Stories – Guyana National Cricket Stadium

The new and modern traffic signal system will improve traffic management and safety. It is also expected to prevent accidents, injury, deaths and property loss. The traffic lights project was financed under a Line of Credit extended to Govt. of Guyana and the works being carried out by CMS Traffic Systems Ltd.

A cricket stadium was constructed in Georgetown, Guyana, by M/S Shapoorji Pallonji Ltd., Mumbai. The design and construction of this stadium, at which several matches of the ICC World Cup 2007 was played, has been financed by Exim Bank under a Line of Credit extended to the Government of Guyana.


Conf

eren

ce P

roce

edin

gs

22

bet, considering the inherent advantages

that the latter offers. Cultural compatibility

would lend further substance to the

partnerships.

Like Argentina, Paraguay holds rich water

and energy resources, but only has a

population of 6 million. This country is

another likely destination for Indian

investments in the farm sector.

Paraguay is a larger producer of oilseeds,

foodgrains like wheat and is the fifth largest

exporter of soyabean. Indian farm

equipment manufacturing companies have

made an impression in the Paraguay

market.

As such, India-Paraguay bilateral trade

doubled in 2009 to $140 million, and a larger

number of Indian companies are looking to

mark their presence in this southern

American country.

Peru has also made a pitch for Indian

investments in its farm sector, given that it

has 84 of the 114 agro zones that support

agriculture. Peru produces a wide variety of

agricultural products, which will be of

essence to the Indian markets.

Among the comparative advantages cited

were: (i) privileged geographic location &

off-season production, (ii) relatively stable

climate, (iii) intrinsic product quality, (iv)

extended harvesting seasons, (v) robust

labour market, and (vi) favourable

ecosystems & large biodiversity.

The investment opportunities in Peruvian

farm sector stem from:

ØTariff preferences for Peruvian

products in the US and EU.

ØAccess to Asian markets.

ØGrowth in demand for organic

products.

For the first time at the Conclave, Paraguay was

represented by the participation of two senior business

leaders from the country. According to H.E. Mr Genaro

Pappalardo, Ambassador of Paraguay in India, who was

instrumental on organising the participation of

businessmen from Paraguay, "Paraguay is keen to build

business partnerships with India. After the recent visit of

a delegation of business leaders in the agro-chemicals

sector, we had two senior representatives from

Paraguayan companies participating in the Conclave for

the first time to explore business opportunities. Mr

Ernesto Ayala Barreto, CEO of Inzucal SA, represents the

lime production and transportation and agro-chemicals

sectors, while Mr Juan Carlos Guanes, CEO of Trafosur

S.A. represents the heavy electrical equipment sector.

Both had very useful meetings and we hope that these

discussions would soon result in some form of business

tie-ups for these companies."

Paraguayan participation for thefirst time at the Conclave

H.E. Mr Genaro Pappalardo

Ambassador of Paraguay in India


nfer

ence

Pro

ceed

ings

Figure 9 Indian Investment & Joint Ventures in LAC

Sectors

Companies

ØSteel ØSoftware

ØPharmaceuticals ØPetroleum

ØChemicals ØMining

ØEngineering products ØBiotechnology

ØJindal Steel & Power Ltd., Essar Steel Ltd.;

ØRanbaxy, Core Healthcare. Dr. Reddy’s, Stride Acrolabs, CIPLA, Torrent, Aurobindo Pharma, IPCA Labs;

ØBajaj Ltd.;

ØPatni Computer Systems, Tech Mahindra, TCS, NIIT, APTECH, Tata Infotech

ØONGC Videsh, Reliance

ØMahindra & Mahindra

ØShree Renuka Sugars, Praj Industries

23

ØBiodiversity - to meet demand for

new farm products.

As of now, the main Indian farm imports

from Peru include beans, spinosa

caesalpinea (tara), grapes, lima beans, and

asparagus. And, the main farm Indian

exports into Peru include: cotton, onion dry,

and soja.

It was cited that exotic nutritional products

made in Peru, such as, Maca, Aguaymanto,

Camu Camu, Kiwicha, Sacha Inchi, and

Algarrobo will find ready markets in India.

The panel informed that Indian businesses

are invited to part icipate in the

Expoalimentaria Fair 2010 being organised

in Lima during September 22-24 this year.

Ecuador could be also become a strong

agriculture base for Indian investors.

Highlighting this, the panel observed that

bilateral trade volume at $70 million could

increase further from the current levels.

The India- Ecuador Chamber of Commerce,

Trade & Tourism has played a pioneering

role in providing advisory services,

consultancy, facilitation services, etc., and

in enhancing the bilateral business

exchanges.

It was suggested that India and LAC

countries should bring about better

coordination of safety control bodies

similar to the IBSA scheme and increase

cooperation to confront food security

crisis. LAC could also be a source of

traditional and exotic products of high

nutritional and protein value. India should

look to organise more commercial

missions to LAC and participate in

specialised fairs in the region.


Success Stories - Supply of Crash Fire Tenders to Suriname

Ten fire tenders have been supplied to Suriname under GoI Line of Credit worth US$ 4.3 million. These crash fire tenders have been designed and modified by BEML to suit local conditions in Suriname. The fire tenders, built on TATRA BEML Chasis have powerful engines developing 300 KW power(12,667 cc) and are capable of negotiating difficult terrain and rough surfaces at high speeds.

Success Stories – Guyana Traffic Signalling System

Success Stories – Guyana National Cricket Stadium

The new and modern traffic signal system will improve traffic management and safety. It is also expected to prevent accidents, injury, deaths and property loss. The traffic lights project was financed under a Line of Credit extended to Govt. of Guyana and the works being carried out by CMS Traffic Systems Ltd.

A cricket stadium was constructed in Georgetown, Guyana, by M/S Shapoorji Pallonji Ltd., Mumbai. The design and construction of this stadium, at which several matches of the ICC World Cup 2007 was played, has been financed by Exim Bank under a Line of Credit extended to the Government of Guyana.


Conf

eren

ce P

roce

edin

gs

22

bet, considering the inherent advantages

that the latter offers. Cultural compatibility

would lend further substance to the

partnerships.

Like Argentina, Paraguay holds rich water

and energy resources, but only has a

population of 6 million. This country is

another likely destination for Indian

investments in the farm sector.

Paraguay is a larger producer of oilseeds,

foodgrains like wheat and is the fifth largest

exporter of soyabean. Indian farm

equipment manufacturing companies have

made an impression in the Paraguay

market.

As such, India-Paraguay bilateral trade

doubled in 2009 to $140 million, and a larger

number of Indian companies are looking to

mark their presence in this southern

American country.

Peru has also made a pitch for Indian

investments in its farm sector, given that it

has 84 of the 114 agro zones that support

agriculture. Peru produces a wide variety of

agricultural products, which will be of

essence to the Indian markets.

Among the comparative advantages cited

were: (i) privileged geographic location &

off-season production, (ii) relatively stable

climate, (iii) intrinsic product quality, (iv)

extended harvesting seasons, (v) robust

labour market, and (vi) favourable

ecosystems & large biodiversity.

The investment opportunities in Peruvian

farm sector stem from:

ØTariff preferences for Peruvian

products in the US and EU.

ØAccess to Asian markets.

ØGrowth in demand for organic

products.

For the first time at the Conclave, Paraguay was

represented by the participation of two senior business

leaders from the country. According to H.E. Mr Genaro

Pappalardo, Ambassador of Paraguay in India, who was

instrumental on organising the participation of

businessmen from Paraguay, "Paraguay is keen to build

business partnerships with India. After the recent visit of

a delegation of business leaders in the agro-chemicals

sector, we had two senior representatives from

Paraguayan companies participating in the Conclave for

the first time to explore business opportunities. Mr

Ernesto Ayala Barreto, CEO of Inzucal SA, represents the

lime production and transportation and agro-chemicals

sectors, while Mr Juan Carlos Guanes, CEO of Trafosur

S.A. represents the heavy electrical equipment sector.

Both had very useful meetings and we hope that these

discussions would soon result in some form of business

tie-ups for these companies."

Paraguayan participation for thefirst time at the Conclave

H.E. Mr Genaro Pappalardo

Ambassador of Paraguay in India


Conf

eren

ce P

roce

edin

gs

Figure 9 Indian Investment & Joint Ventures in LAC

Sectors

Companies

ØSteel ØSoftware

ØPharmaceuticals ØPetroleum

ØChemicals ØMining

ØEngineering products ØBiotechnology

ØJindal Steel & Power Ltd., Essar Steel Ltd.;

ØRanbaxy, Core Healthcare. Dr. Reddy’s, Stride Acrolabs, CIPLA, Torrent, Aurobindo Pharma, IPCA Labs;

ØBajaj Ltd.;

ØPatni Computer Systems, Tech Mahindra, TCS, NIIT, APTECH, Tata Infotech

ØONGC Videsh, Reliance

ØMahindra & Mahindra

ØShree Renuka Sugars, Praj Industries

24

Proceedings

India-LAC partnership in the infrastructure and engineering sector is poised for

growth since India in particular showed no signs of negative growth during the

recent global meltdown. There is a huge potential for joint ventures and long-

term business cooperation between India and LAC that could lead to strong

relations between the two regions. Areas like infrastructure, capacity building,

skill development and technology sharing could be considered for long-term

partnerships.

The panel observed that Indian companies should explore investment

opportunities in core and infrastructure projects in LAC countries, especially in

sectors like railways, mass rapid transport

systems (MRTS), coal mining, alternative

energy and oil exploration.

Chile was cited as a key investment

destination for Indian infrastructure, heavy

engineering and project management

companies. The Chilean economy is rated

as one of the healthiest Latin America

economies by the International Monetary

Fund (IMF). However, the consequences of

the serious earthquake had taken a heavy

toll on the economy.

Broadly, Chile possesses one of the most

open economies in the region with low

Session Chair Ambassador VB Soni , Chairman, Overseas

Infrastructure Alliance Pvt Ltd, India

Panel Mr Alenjandro Arrau de la Sotta, Verne LTDA, Chile

Mr Raul E Santaella, Vice-President, Business

Development, Santaella & Asociados, SA, Dominican

Republic

Mr AK Gupta, Voce- President,, Angelique International

Limited


INFRASTRUCTURE, ENGINEERING

& PROJECT MANAGEMENT


nfer

ence

Pro

ceed

ings

By Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile• The mining exports have increased significantly from the year 2004.• The mining exports represented 59% of the amount exported between 2006 and 2009.• The copper continues being the principal export, and in the last years he has constituted about a 85% of the

mining exports.

Figure 10 Chilean Mining in the World

60.000

50.000

40.000

30.000

20.000

10.000

0

70%

60%

50%

40%

30%

20%

10%

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

29

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

Copper ParticipationRest of miningindustry

25

customs rates and strong orientation to exports. Notably, for more than 12 years

the Chilean GDP grew at 7% p.a., while the inflation rate was a little more than

4% p.a.

Chile is a member of APEC and of Mercosur and has signed commercial

agreements with the EU, Mexico and Canada, and Preferential Trade Agreement

(PTA) with India. In the Global Competitiveness Index, Chile is cited as the most

competitive country of Latin America. Inside the general ranking, Chile locates in ththe 27 position among 125 economies.

Mining is the most dominant sector in Chile and

holds much promise for Indian investors. The

advantages of investing in Chile are:

ØA sound domestic legal framework

ensuring stability and security.

ØNational treatment and attractive

opportunities for foreign investment.

ØHighly skilled mining specialists.

ØAdvanced energy infrastructure and

transportation network.

ØClusters of goods and services suppliers

located in key mining areas.

Mr. Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile; Ambassador V B Soni, Chairman, Overseas Infrastructure Alliance, (I) Pvt Ltd, India; Mr. Raul E. Santaella, Vice President - Business Development, Santaella & Asociados, S.A.,Dominican Republic; Mr. A K Gupta, Vice President, Angelique International Ltd, India at Session on India & LAC: Sectoral Synergies in Infrastructure, Engineering and Project Management


Conf

eren

ce P

roce

edin

gs

Figure 11 Chile in the World

Mining Industry

Services

Fishing

Forest Industry

Extraction of raw

materials

Manufacture

Tourism

Principal activities in

Chile

24

Proceedings

India-LAC partnership in the infrastructure and engineering sector is poised for

growth since India in particular showed no signs of negative growth during the

recent global meltdown. There is a huge potential for joint ventures and long-

term business cooperation between India and LAC that could lead to strong

relations between the two regions. Areas like infrastructure, capacity building,

skill development and technology sharing could be considered for long-term

partnerships.

The panel observed that Indian companies should explore investment

opportunities in core and infrastructure projects in LAC countries, especially in

sectors like railways, mass rapid transport

systems (MRTS), coal mining, alternative

energy and oil exploration.

Chile was cited as a key investment

destination for Indian infrastructure, heavy

engineering and project management

companies. The Chilean economy is rated

as one of the healthiest Latin America

economies by the International Monetary

Fund (IMF). However, the consequences of

the serious earthquake had taken a heavy

toll on the economy.

Broadly, Chile possesses one of the most

open economies in the region with low

Session Chair Ambassador VB Soni , Chairman, Overseas

Infrastructure Alliance Pvt Ltd, India

Panel Mr Alenjandro Arrau de la Sotta, Verne LTDA, Chile

Mr Raul E Santaella, Vice-President, Business

Development, Santaella & Asociados, SA, Dominican

Republic

Mr AK Gupta, Voce- President,, Angelique International

Limited


INFRASTRUCTURE, ENGINEERING

& PROJECT MANAGEMENT


Conf

eren

ce P

roce

edin

gs

By Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile• The mining exports have increased significantly from the year 2004.• The mining exports represented 59% of the amount exported between 2006 and 2009.• The copper continues being the principal export, and in the last years he has constituted about a 85% of the

mining exports.

Figure 10 Chilean Mining in the World

60.000

50.000

40.000

30.000

20.000

10.000

0

70%

60%

50%

40%

30%

20%

10%

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

29

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

Copper ParticipationRest of miningindustry

25

customs rates and strong orientation to exports. Notably, for more than 12 years

the Chilean GDP grew at 7% p.a., while the inflation rate was a little more than

4% p.a.

Chile is a member of APEC and of Mercosur and has signed commercial

agreements with the EU, Mexico and Canada, and Preferential Trade Agreement

(PTA) with India. In the Global Competitiveness Index, Chile is cited as the most

competitive country of Latin America. Inside the general ranking, Chile locates in ththe 27 position among 125 economies.

Mining is the most dominant sector in Chile and

holds much promise for Indian investors. The

advantages of investing in Chile are:

ØA sound domestic legal framework

ensuring stability and security.

ØNational treatment and attractive

opportunities for foreign investment.

ØHighly skilled mining specialists.

ØAdvanced energy infrastructure and

transportation network.

ØClusters of goods and services suppliers

located in key mining areas.

Mr. Alejandro Arrau de la Sotta, General Manager, Verne LTDA, Chile; Ambassador V B Soni, Chairman, Overseas Infrastructure Alliance, (I) Pvt Ltd, India; Mr. Raul E. Santaella, Vice President - Business Development, Santaella & Asociados, S.A.,Dominican Republic; Mr. A K Gupta, Vice President, Angelique International Ltd, India at Session on India & LAC: Sectoral Synergies in Infrastructure, Engineering and Project Management


Conf

eren

ce P

roce

edin

gs

Figure 11 Chile in the World

Mining Industry

Services

Fishing

Forest Industry

Extraction of raw

materials

Manufacture

Tourism

Principal activities in

Chile

26

ØChile is home to some of the world’s largest, better known copper mines.

Approximately 80% of Chilean production comes from porphyry copper

deposits rich in molybdenum, gold, and silver byproducts.

Moving on to Dominican Republic, the panel noted that advantages of investing

in this country are: democratic polity, inclusive and egalitarian society, GDP

growth in spite of global economic turmoil, marked need for energy

infrastructure, experience in EPC contracts and BOT concessions, leverage

influx of aid to Haiti, strengthening relationship between India and Dominican

Republic, EXIM Bank financing from traditional sources, and lack of diplomatic

relations with People’s Republic of China.

There is a large energy requirement in Dominican Republic leading to big

potential for Indian companies in this area. The Achilles heel of the Dominican

economy has been its weak and deficit ridden energy sector. To meet the current

supply deficit of around 500-600 MW and to continue meeting demand from

then on, the country will need to install an additional 2,400 MW of base load

generation. Of these 1,200 MW are already in the Greenfield/bidding process.

Along with that additional generation capacity, more than 300 KM of

transmission lines at 345 KV will be needed to distribute that energy and have it

reach the end users. The opportunities here would be to offer an EPC package

with government to government financing or a BOT to be paid off by the tolls that

are collected from the transported energy.

Dominican Republic was the first country to join the international community in

providing aid to fellow Haitians. There is scope for international companies to

bring aid and/or financing, or take advantage of the financing to be provided by

multilateral organizations by setting up shop in DR as a base of operations for the

whole region.

The fact that the DR has diplomatic relations with Taiwan means China cannot

offer financing to the country. China has made lots of headway in many countries

in the region but for one reason or another, this has not happened in the DR.

Herein lies another opportunity for India to cash in, by entering into long-term

agreements with DR companies covering long-gestation projects.


nfer

ence

Pro

ceed

ings

27

Tango Dance performance by Mr. Jonathan Spitel and Ms. Betsabé Flores from Argentina, World Champions of Tango

Participants and guests were treated to a

superlative Tango dance performance by

Jonathan Spitel and Betsabé Flores from

Buenos Aires, the current world tango

champions. The Tango is a social dance and a

musical genre that originated in Argentina

and Uruguay, in the area of the Rio de la

Plata. Tango as a dance has influences from

Spanish and African culture and originated in

lower-class districts of Buenos Aires, the

music derived from the fusion of various

forms of music from Europe. In 2009 the

tango was declared as part of the world's

"intangible cultural heritage" by UNESCO.

Sahajanand Medical Technologies Pvt Ltd

hosted dinner for all delegates.

Scintillating Tango performance byWorld Champion Duo


Conf

eren

ce P

roce

edin

gs

26

ØChile is home to some of the world’s largest, better known copper mines.

Approximately 80% of Chilean production comes from porphyry copper

deposits rich in molybdenum, gold, and silver byproducts.

Moving on to Dominican Republic, the panel noted that advantages of investing

in this country are: democratic polity, inclusive and egalitarian society, GDP

growth in spite of global economic turmoil, marked need for energy

infrastructure, experience in EPC contracts and BOT concessions, leverage

influx of aid to Haiti, strengthening relationship between India and Dominican

Republic, EXIM Bank financing from traditional sources, and lack of diplomatic

relations with People’s Republic of China.

There is a large energy requirement in Dominican Republic leading to big

potential for Indian companies in this area. The Achilles heel of the Dominican

economy has been its weak and deficit ridden energy sector. To meet the current

supply deficit of around 500-600 MW and to continue meeting demand from

then on, the country will need to install an additional 2,400 MW of base load

generation. Of these 1,200 MW are already in the Greenfield/bidding process.

Along with that additional generation capacity, more than 300 KM of

transmission lines at 345 KV will be needed to distribute that energy and have it

reach the end users. The opportunities here would be to offer an EPC package

with government to government financing or a BOT to be paid off by the tolls that

are collected from the transported energy.

Dominican Republic was the first country to join the international community in

providing aid to fellow Haitians. There is scope for international companies to

bring aid and/or financing, or take advantage of the financing to be provided by

multilateral organizations by setting up shop in DR as a base of operations for the

whole region.

The fact that the DR has diplomatic relations with Taiwan means China cannot

offer financing to the country. China has made lots of headway in many countries

in the region but for one reason or another, this has not happened in the DR.

Herein lies another opportunity for India to cash in, by entering into long-term

agreements with DR companies covering long-gestation projects.


Conf

eren

ce P

roce

edin

gs

27

Tango Dance performance by Mr. Jonathan Spitel and Ms. Betsabé Flores from Argentina, World Champions of Tango

Participants and guests were treated to a

superlative Tango dance performance by

Jonathan Spitel and Betsabé Flores from

Buenos Aires, the current world tango

champions. The Tango is a social dance and a

musical genre that originated in Argentina

and Uruguay, in the area of the Rio de la

Plata. Tango as a dance has influences from

Spanish and African culture and originated in

lower-class districts of Buenos Aires, the

music derived from the fusion of various

forms of music from Europe. In 2009 the

tango was declared as part of the world's

"intangible cultural heritage" by UNESCO.

Sahajanand Medical Technologies Pvt Ltd

hosted dinner for all delegates.

Scintillating Tango performance byWorld Champion Duo


Conf

eren

ce P

roce

edin

gs

28

ThemeImproved connectivity between India and Latin America is the essential first step

towards developing a deeper trade and economic relationship. Developing logistical

chains and creating inter-connected transportation hubs will address more than just the

trade needs on both sides. There is need for policy intervention with strong private sector

involvement in this critical area.

Proceedings

Transport connectivity and logistics

between India and the LAC region will

largely determine the course of bilateral

trade and investment flows. The current

situation demands the active intervention

of governments and industry on both sides

to address the vexed issues. Shipping

routes between India and LAC calls merits

close attention.

Shipping routes reflect the world trade

flows. That is, ocean transportation is

central to trade movement, since 90% of

world trade moves by sea and 80% of the

world’s population lives within a 200 km

radius of all oceans and seas.

Increase in shipping lines will reduce the

transaction costs of goods moving

between India and the LAC countries.

The panel noted that ‘Go East’ will be the

right approach to reach the Pacific coast of

Session Chair Mr Praful Talera, Executive Director, Dynamic Logistics

Panel H.E. Mr Carlos Abad, Ambassador of Ecuador in India

H.E. Ms Angela Patricia Figueroa Rodriguez, Executive

Director, CAMTEX, El Salvador

Mr Cesar Ferrer, Ambassador of Uruguay in India

TRANSPORTATION AND LOGISTICS:

BRINGING INDIA AND LAC CLOSE


nfer

ence

Pro

ceed

ings

Figure 12 Logistic and Transportation

India- South America Pacific Coast

Figure 13 Logistic and Transportation: Challenge

Time: 45/50 days

Panama CanalSuez CanalSomalie Cost

Main routes aredefined bylarger players

Increase pricesof goods

29

LAC. As such, South Africa serves as an

efficient and economical staging area for

movement of goods between India and the

Atlantic coast of LAC region, but the route

from the eastern seaboard of India via

south east Asia to the Pacific coast of Latin

America will be a highly advantageous

route. [See Figure 14]

Several LAC countries serve as entry points

to the region’s markets. Take the case of

Ecuador. Focus on logistics and transport

connectivity between India and the Pacific

coast of LAC region will positively impact

the bilateral trade flows with Chile, Peru,

Ecuador and Colombia. Currently,

movement of merchandise trade between

these two regions is hampered by long

delays that extend to even 4 months.

El Salvador in Meso-America stands out as

a gateway to the region. The Central

American region is a recipient of 20% of

India’s exports to Latin America. El Salvador

is also an avenue for third country exports

to the US.

H.E. Cesar Ferrer, Ambassador of Uruguay in India; Mr. Praful Talera, Member of CII LAC Committee and Executive Director, Dynamic Logistics, India; H.E. Mr. Carlos Abad, Ambassador of Ecuador in India; Ms. Angela Patricia Figueroa Rodriguez, Executive Director, CAMTEX, El Salvador

PACIFIC

INDIAN OCEAN

ATLANTIC OCEAN

SOUTH AMERICA

ASIA

EUROPENORTH AMERICA

AFRICA

AUSTRALIA

ANTARTICA

OCEAN

Figure 14 India- LAC shipping routes

Approach to Atlantic coast

Approach to Pacific coast


Conf

eren

ce P

roce

edin

gs

28

ThemeImproved connectivity between India and Latin America is the essential first step

towards developing a deeper trade and economic relationship. Developing logistical

chains and creating inter-connected transportation hubs will address more than just the

trade needs on both sides. There is need for policy intervention with strong private sector

involvement in this critical area.

Proceedings

Transport connectivity and logistics

between India and the LAC region will

largely determine the course of bilateral

trade and investment flows. The current

situation demands the active intervention

of governments and industry on both sides

to address the vexed issues. Shipping

routes between India and LAC calls merits

close attention.

Shipping routes reflect the world trade

flows. That is, ocean transportation is

central to trade movement, since 90% of

world trade moves by sea and 80% of the

world’s population lives within a 200 km

radius of all oceans and seas.

Increase in shipping lines will reduce the

transaction costs of goods moving

between India and the LAC countries.

The panel noted that ‘Go East’ will be the

right approach to reach the Pacific coast of

Session Chair Mr Praful Talera, Executive Director, Dynamic Logistics

Panel H.E. Mr Carlos Abad, Ambassador of Ecuador in India

H.E. Ms Angela Patricia Figueroa Rodriguez, Executive

Director, CAMTEX, El Salvador

Mr Cesar Ferrer, Ambassador of Uruguay in India

TRANSPORTATION AND LOGISTICS:

BRINGING INDIA AND LAC CLOSE


Conf

eren

ce P

roce

edin

gs

Figure 12 Logistic and Transportation

India- South America Pacific Coast

Figure 13 Logistic and Transportation: Challenge

Time: 45/50 days

Panama CanalSuez CanalSomalie Cost

Main routes aredefined bylarger players

Increase pricesof goods

29

LAC. As such, South Africa serves as an

efficient and economical staging area for

movement of goods between India and the

Atlantic coast of LAC region, but the route

from the eastern seaboard of India via

south east Asia to the Pacific coast of Latin

America will be a highly advantageous

route. [See Figure 14]

Several LAC countries serve as entry points

to the region’s markets. Take the case of

Ecuador. Focus on logistics and transport

connectivity between India and the Pacific

coast of LAC region will positively impact

the bilateral trade flows with Chile, Peru,

Ecuador and Colombia. Currently,

movement of merchandise trade between

these two regions is hampered by long

delays that extend to even 4 months.

El Salvador in Meso-America stands out as

a gateway to the region. The Central

American region is a recipient of 20% of

India’s exports to Latin America. El Salvador

is also an avenue for third country exports

to the US.

H.E. Cesar Ferrer, Ambassador of Uruguay in India; Mr. Praful Talera, Member of CII LAC Committee and Executive Director, Dynamic Logistics, India; H.E. Mr. Carlos Abad, Ambassador of Ecuador in India; Ms. Angela Patricia Figueroa Rodriguez, Executive Director, CAMTEX, El Salvador

PACIFIC

INDIAN OCEAN

ATLANTIC OCEAN

SOUTH AMERICA

ASIA

EUROPENORTH AMERICA

AFRICA

AUSTRALIA

ANTARTICA

OCEAN

Figure 14 India- LAC shipping routes

Approach to Atlantic coast

Approach to Pacific coast


Conf

eren

ce P

roce

edin

gs

30

El Salvador has thus emerged as the

logistics hub in the Mesoamerican region.

The new port in El Salvador ‘Port of La

Union’ will enable Indian exporters to reach

new markets on the Pacific coast of LAC

region. A market of 70 million people could

be accessed from this central American

country.

El Salvador offers FTZs, logistics and

service parks that support manufacturing

operations and valued added distribution

facilities. It is also the second most open

economy in the region after Chile.

The Mesoamerican Pacific Corridor will

ease the movement of goods between

Mexico and Panama, which will be a big

boost for transit trade in the country.

There are two major operations ports in El Salvador: Cutuco and La Union. The

Port of Cutuco, built on Salvadoran territory on the Gulf of Fonseca will be the

largest container port serving the region between Panama and Northern Mexico.

It will eventually be able to service Post-Panamax container carriers up to 6,000

TEU capacity. The port holds prospects for land-bridge connecting overland to

Caribbean ports in less than 8 hours.

The port of La Union is a deep sea port with capacity to receive post Panamax

boats. It is located at a short distance from the Panama Canal (1.5 days).

El Salvador is also connected by air to the whole continent with daily flights to 40

cities in 22 countries and major cities in the US.

The key advantages in investing in El Salvador are:

ØNearshore market to the USA

ØLocated in the middle of the route of Pacific Asia and the European

Union

ØMore than 40 million people in the Mesoamerican region (South Mexico

to Panama)

ØFTAs with Mexico, Panama, USA, Central America, Colombia, Dominican

Republic and Taiwan and an Association Agreement is being negotiated

with the European Union.

El Salvador would look to India for expertise in railway constructions and

systems. The Port of La Union is not in competition with the Panama Canal but

complements it. Also, the area around the Port of La Union is seeing major port

infrastructure development projects that hold several investment opportunities

for Indian players.


nfer

ence

Pro

ceed

ings

Source : World Competitiveness Report 2008-2009By Angela Patricia Figueroa Rodriguez, Executive Director, Camtex, El Salvador

Figure 15 Infrastructures in Latin America

Conf

eren

ce P

roce

edin

gs

Chile

El S

alv

ador

Panam

á

Guate

mala

Uru

guary

Hondura

s

Méxic

o

Colo

mbia

Arg

entina

Bra

sil

Costa

Ric

a

Ecuador

Venezu

ela

Perú

Nic

ara

gua

Para

guary

6

5

4

3

2

1

0

World average: 3.8

One of the best Infrastructure in Latin America

31

Uruguay was another country that

showcased its transit trade and logistics

facilities at the session. The country has

been described as a natural geographic and

economic “hub” at the centre of a market

inhabited by more than 238 million

consumers, with the highest per capita

income in the continent, and a GDP of $1.63

billion.

Uruguay has a diverse and extensive

communications network which adds to

the competitiveness of the financial

s e r v i c e s a n d b u s i n e s s s u p p o r t

infrastructure, and facilitates access to

core of Mercosur and other countries and

regions of the world.

The free port and airport in Montevideo is considered as a “logistic hub” for

distributing products and services to neighbouring larger markets in the region.

Importantly, the Secretariat of Mercosur is located in Montevideo.

Montevideo is the first and only free port on the South American Atlantic coast.

During their stay in the port, goods are exempt from all taxes and charges

applicable at the time of import. Also, the port is a customs exclusion zone,

wherein it is possible to contract international shipping services such as

container terminals and warehousing through private operators.

While Uruguay accounts for only 2% of the LAC GDP, it sees 64% of extra-

regional transshipments in the region. The panel said that Montevideo has the

‘Rotterdam effect’ which is about a small country catering to a large global

country.

Referring to the state of Indian logistics, the panel observed that the industry is

in dire need of efficient processes and systems, given that 40% of fruits and

vegetables produced in the country are wasted owing to limited cold chain

facilities.

The Indian logistics industry is highly fragmented, though consolidation is

expected to take place in the coming years, which will make the services

efficient and cost-effective. As of now, investment in warehouses, transport

centers, ICDs, etc., is sporadic and the “Integrated Cold Chain” is nearly non-

existent. This current state of Indian logistics industry is a

compelling opportunity for foreign investors. As such,

the country is making good progress with the major

transportation projects like the Golden Quadrilateral,

Delhi-Mumbai Freight Corridor, industrial corridors, etc. A

major airport is being planned in the heart of India, in

Nagpur.

Figure 16 The Port of Cutuco, El Salvador: Building South-South Trade

El Salvador & Central America


Conf

eren

ce P

roce

edin

gs

H.E. Ms Angela Patricia Figueroa Rodriguez,Executive Director, CAMTEX, El Salvador

El Salvador has emerged as the

logistics hub in the Mesoamerican

region

ØBuilt on Salvadoran territory on the Gulf of Fonseca, the new Port of Cutuco will be the largest container port serving the region between Panama and Northern Mexico

ØApprox. $200 million dredging, construction and equipment costs, financed by JICA and the GOESØScheduled to begin operations soon to serve Panamax-class vesselsØWill eventually be able to service Post-Panamax container carriers w. up to 6,000 TEU capacityØProspects for land-bridge connecting overland to Caribbean ports in less than 8 hours

30

El Salvador has thus emerged as the

logistics hub in the Mesoamerican region.

The new port in El Salvador ‘Port of La

Union’ will enable Indian exporters to reach

new markets on the Pacific coast of LAC

region. A market of 70 million people could

be accessed from this central American

country.

El Salvador offers FTZs, logistics and

service parks that support manufacturing

operations and valued added distribution

facilities. It is also the second most open

economy in the region after Chile.

The Mesoamerican Pacific Corridor will

ease the movement of goods between

Mexico and Panama, which will be a big

boost for transit trade in the country.

There are two major operations ports in El Salvador: Cutuco and La Union. The

Port of Cutuco, built on Salvadoran territory on the Gulf of Fonseca will be the

largest container port serving the region between Panama and Northern Mexico.

It will eventually be able to service Post-Panamax container carriers up to 6,000

TEU capacity. The port holds prospects for land-bridge connecting overland to

Caribbean ports in less than 8 hours.

The port of La Union is a deep sea port with capacity to receive post Panamax

boats. It is located at a short distance from the Panama Canal (1.5 days).

El Salvador is also connected by air to the whole continent with daily flights to 40

cities in 22 countries and major cities in the US.

The key advantages in investing in El Salvador are:

ØNearshore market to the USA

ØLocated in the middle of the route of Pacific Asia and the European

Union

ØMore than 40 million people in the Mesoamerican region (South Mexico

to Panama)

ØFTAs with Mexico, Panama, USA, Central America, Colombia, Dominican

Republic and Taiwan and an Association Agreement is being negotiated

with the European Union.

El Salvador would look to India for expertise in railway constructions and

systems. The Port of La Union is not in competition with the Panama Canal but

complements it. Also, the area around the Port of La Union is seeing major port

infrastructure development projects that hold several investment opportunities

for Indian players.


Conf

eren

ce P

roce

edin

gs

Source : World Competitiveness Report 2008-2009By Angela Patricia Figueroa Rodriguez, Executive Director, Camtex, El Salvador

Figure 15 Infrastructures in Latin America

Conf

eren

ce P

roce

edin

gs

Chile

El S

alv

ador

Panam

á

Guate

mala

Uru

guary

Hondura

s

Méxic

o

Colo

mbia

Arg

entina

Bra

sil

Costa

Ric

a

Ecuador

Venezu

ela

Perú

Nic

ara

gua

Para

guary

6

5

4

3

2

1

0

World average: 3.8

One of the best Infrastructure in Latin America

31

Uruguay was another country that

showcased its transit trade and logistics

facilities at the session. The country has

been described as a natural geographic and

economic “hub” at the centre of a market

inhabited by more than 238 million

consumers, with the highest per capita

income in the continent, and a GDP of $1.63

billion.

Uruguay has a diverse and extensive

communications network which adds to

the competitiveness of the financial

s e r v i c e s a n d b u s i n e s s s u p p o r t

infrastructure, and facilitates access to

core of Mercosur and other countries and

regions of the world.

The free port and airport in Montevideo is considered as a “logistic hub” for

distributing products and services to neighbouring larger markets in the region.

Importantly, the Secretariat of Mercosur is located in Montevideo.

Montevideo is the first and only free port on the South American Atlantic coast.

During their stay in the port, goods are exempt from all taxes and charges

applicable at the time of import. Also, the port is a customs exclusion zone,

wherein it is possible to contract international shipping services such as

container terminals and warehousing through private operators.

While Uruguay accounts for only 2% of the LAC GDP, it sees 64% of extra-

regional transshipments in the region. The panel said that Montevideo has the

‘Rotterdam effect’ which is about a small country catering to a large global

country.

Referring to the state of Indian logistics, the panel observed that the industry is

in dire need of efficient processes and systems, given that 40% of fruits and

vegetables produced in the country are wasted owing to limited cold chain

facilities.

The Indian logistics industry is highly fragmented, though consolidation is

expected to take place in the coming years, which will make the services

efficient and cost-effective. As of now, investment in warehouses, transport

centers, ICDs, etc., is sporadic and the “Integrated Cold Chain” is nearly non-

existent. This current state of Indian logistics industry is a

compelling opportunity for foreign investors. As such,

the country is making good progress with the major

transportation projects like the Golden Quadrilateral,

Delhi-Mumbai Freight Corridor, industrial corridors, etc. A

major airport is being planned in the heart of India, in

Nagpur.

Figure 16 The Port of Cutuco, El Salvador: Building South-South Trade

El Salvador & Central America


Conf

eren

ce P

roce

edin

gs

H.E. Ms Angela Patricia Figueroa Rodriguez,Executive Director, CAMTEX, El Salvador

El Salvador has emerged as the

logistics hub in the Mesoamerican

region

ØBuilt on Salvadoran territory on the Gulf of Fonseca, the new Port of Cutuco will be the largest container port serving the region between Panama and Northern Mexico

ØApprox. $200 million dredging, construction and equipment costs, financed by JICA and the GOESØScheduled to begin operations soon to serve Panamax-class vesselsØWill eventually be able to service Post-Panamax container carriers w. up to 6,000 TEU capacityØProspects for land-bridge connecting overland to Caribbean ports in less than 8 hours

33

contribute more to the GDP. There is huge potential for cooperation and partnerships in the IT/ITeS sector in LAC region.

The long-term trend shows that India will hold on to its position as the leading provider of talent at lowest cost. Besides, demographic trend shows that the working population is shrinking in key developed countries like Japan, Italy and the US. This will help regions like LAC and India to take charge of the industry globally. Besides, social and environmental trends show that there is an increase in Internet and mobile connectivity for transforming people’s lives and in creating need for resource efficient solutions.

The global sourcing industry in India is likely to reach $175 billion, while the domestic outsourcing industry is expected to reach $50 billion by 2020. The key factors aiding this growth are:

ØLarge pool of highly-skilled, English-speaking IT workforce.

ØCost advantage – infrastructure & manpower costs

ØSoftware development

ØStrong tertiary education

ØEnabling government support and policies

ØExpertise in new technologies

ØReasonable technical innovations

ØHints of reverse brain drain.

LAC countries are considering India as a likely destination for IT/ITeS support because the global crisis and the consequent local resource and credit crunch have induced LAC importers to look towards less expensive sources such as India. The crisis thus opened a new window of opportunity for Indian companies to create long

Mr. Ninad Karpe, CEO and Managing Director, Aptech Ltd, India; Mr. Fabio Fischer de Aguiar, Board Vice President, TCI BPO S/A, Brazil; Mr. Ameet Nivsarkar, Vice President - Global Trade, Development, NASSCOM, India; Mr. Francisco Cabrera, Minister of Economic Development, Government of Buenos Aires, Argentina at Session on India & LAC: Sectoral Synergies in IT and ITeS


Conf

eren

ce P

roce

edin

gs

32

ProceedingsInformation Technology (IT) has indeed played a key role in putting India on the global map. Percentage GDP share of the Indian IT sector rose from 1.20% in the year 1996–97 to an estimated 5.80% in 2008–09. Even during the recent global economic slowdown, the IT-BPO exports industry displayed resilience to grow by 5.5% in 2010.

India continues to take the centre-stage in the IT/ITeS (Information Enabled Services) sector with 51% share of the total sourcing market. The industry accounts for 25% of India’s exports and 10.5% of services revenues.

With e-Governance projects gaining traction, the domestic IT market is expected to grow at a rapid pace. Government IT spending was estimated at Rs 150 billion in 2009. However, the industry continues to be an export led sector (see Figure 17), with foreign providers accounting for over 30% of the total market.

The BPO industry continues to be the fastest growing segment at 22% and IT services is expected to grow by 12%, as per various estimates.

Presently the Indian IT/ITeS industry directly employs around 2.3 million professionals and 70% more workforces will be added to this within 18-30 years.

US still dominates the IT-BPO global market with 61% global share, followed by the UK with 18% and the EU, excluding UK, with 12%. But a higher growth rate is seen in the non-traditional markets rather than the tradition pockets of IT-BPO market.

IT-BPO has already taken deep roots in the banking and financial sectors, and is foraying into other sectors like healthcare and utilities services.

The panel observed that government and private sector should jointly invest in infrastructure areas and bridge the educational gap. At present, 90% of the Indian IT-BPO business is happening in six major cities. That situation needs to change as the business has to spread to the other 43, tier 2 & 3 cities, so that the segment can

Session Chair Mr Ameet Nivsarkar, Vice-President, Global Trade

Development, NASSCOM

Panel Mr Fabio Fischer de Aguiar, Board Vice-President, TCI

BPO S/A, Brazil

Mr Francisco Cabrera, Minister of Economic

Development, Government of Buenos Aires, Argentina

Mr Ninad Karpe, MD & CEO, Aptech

SECTORAL SYNERGIES IN IT & ITeS


nfer

ence

Pro

ceed

ings

Source: Nasscom

Figure 17 Exports (as percentage) of Indian IT-BPO market

Domestic

Exports

31.740.9

47.5 50.1

16.2

22.0

21.923.0

FY2007 FY2008 FY2009 FY2010E

USD billion

47.9

62.9

79.473.1

33

contribute more to the GDP. There is huge potential for cooperation and partnerships in the IT/ITeS sector in LAC region.

The long-term trend shows that India will hold on to its position as the leading provider of talent at lowest cost. Besides, demographic trend shows that the working population is shrinking in key developed countries like Japan, Italy and the US. This will help regions like LAC and India to take charge of the industry globally. Besides, social and environmental trends show that there is an increase in Internet and mobile connectivity for transforming people’s lives and in creating need for resource efficient solutions.

The global sourcing industry in India is likely to reach $175 billion, while the domestic outsourcing industry is expected to reach $50 billion by 2020. The key factors aiding this growth are:

ØLarge pool of highly-skilled, English-speaking IT workforce.

ØCost advantage – infrastructure & manpower costs

ØSoftware development

ØStrong tertiary education

ØEnabling government support and policies

ØExpertise in new technologies

ØReasonable technical innovations

ØHints of reverse brain drain.

LAC countries are considering India as a likely destination for IT/ITeS support because the global crisis and the consequent local resource and credit crunch have induced LAC importers to look towards less expensive sources such as India. The crisis thus opened a new window of opportunity for Indian companies to create long

Mr. Ninad Karpe, CEO and Managing Director, Aptech Ltd, India; Mr. Fabio Fischer de Aguiar, Board Vice President, TCI BPO S/A, Brazil; Mr. Ameet Nivsarkar, Vice President - Global Trade, Development, NASSCOM, India; Mr. Francisco Cabrera, Minister of Economic Development, Government of Buenos Aires, Argentina at Session on India & LAC: Sectoral Synergies in IT and ITeS


Conf

eren

ce P

roce

edin

gs

32

ProceedingsInformation Technology (IT) has indeed played a key role in putting India on the global map. Percentage GDP share of the Indian IT sector rose from 1.20% in the year 1996–97 to an estimated 5.80% in 2008–09. Even during the recent global economic slowdown, the IT-BPO exports industry displayed resilience to grow by 5.5% in 2010.

India continues to take the centre-stage in the IT/ITeS (Information Enabled Services) sector with 51% share of the total sourcing market. The industry accounts for 25% of India’s exports and 10.5% of services revenues.

With e-Governance projects gaining traction, the domestic IT market is expected to grow at a rapid pace. Government IT spending was estimated at Rs 150 billion in 2009. However, the industry continues to be an export led sector (see Figure 17), with foreign providers accounting for over 30% of the total market.

The BPO industry continues to be the fastest growing segment at 22% and IT services is expected to grow by 12%, as per various estimates.

Presently the Indian IT/ITeS industry directly employs around 2.3 million professionals and 70% more workforces will be added to this within 18-30 years.

US still dominates the IT-BPO global market with 61% global share, followed by the UK with 18% and the EU, excluding UK, with 12%. But a higher growth rate is seen in the non-traditional markets rather than the tradition pockets of IT-BPO market.

IT-BPO has already taken deep roots in the banking and financial sectors, and is foraying into other sectors like healthcare and utilities services.

The panel observed that government and private sector should jointly invest in infrastructure areas and bridge the educational gap. At present, 90% of the Indian IT-BPO business is happening in six major cities. That situation needs to change as the business has to spread to the other 43, tier 2 & 3 cities, so that the segment can

Session Chair Mr Ameet Nivsarkar, Vice-President, Global Trade

Development, NASSCOM

Panel Mr Fabio Fischer de Aguiar, Board Vice-President, TCI

BPO S/A, Brazil

Mr Francisco Cabrera, Minister of Economic

Development, Government of Buenos Aires, Argentina

Mr Ninad Karpe, MD & CEO, Aptech

SECTORAL SYNERGIES IN IT & ITeS


Conf

eren

ce P

roce

edin

gs

Source: Nasscom

Figure 17 Exports (as percentage) of Indian IT-BPO market

Domestic

Exports

31.740.9

47.5 50.1

16.2

22.0

21.923.0

FY2007 FY2008 FY2009 FY2010E

USD billion

47.9

62.9

79.473.1

35

Ø simplify setting up of Development Centers (DCs)

Ø

Ø reduction of withholding taxes

Ø

The panel recommended three key steps to boost the India-LAC IT/ITeS partnership:

ØInvestment in technical education & skills

ØStrengthening of markets

ØInformation sharing & intelligence.

In terms of countrys-specific engagement in the IT-BPO sector, Brazil could be a key partner for India. Business relations between India and Brazil are on the upswing as during 2002- 2008 bilateral trade registered a growth of 25% (CAGR) and bilateral investments grew at 12% (CAGR).

Like India, Brazil is also improving its position in the IT-BPO industry and has overtaken China in many aspects. However, among the emerging economies, India is still the leader in the BPO industry. Brazil offers huge investment opportunity to Indian companies as the county is the gateway to LAC region. Besides, Brazil has shown consistency in the GDP growth for the past few years. Figure 19 shows the rising level of India-Brazil bilateral trade and investment ties.

In terms of IT-BPO competitiveness, Figure 20 shows the relative strengths of India and Brazil.

Buenos Aires provides compel l ing opportunities for Indian investments in the IT-BPO sector. The city offers excellent bilingual human capital with advanced skills, and educational coverage comparable with many OECD countries. In addition, the city boasts of advanced in f rast ructure , th ree international airports, and excellent public utility network.

Infrastructure issues:

Improved connectivity.

Taxation issues:

Totalisation treaty between nations

Source: CISCO, Presentation :India & LACsectoral synergies in IT & ITeSBy Mr Ninad Karpe, MD & CEO, Aptech

Latam Skill Shortage in Networking Field

Demand for Latin American professionals

with Internetworking skills will outpace

supply by nearly 27 percent by 2010:

ØBrazil: shortage of 44,000

ØMexico: shortage of 28,000

Source: Unctad, Secex, Indian Department of Commerce, Jai Group Analysis, Jai Group

Figure 19 India-Brazil bilateral trade and investment flows (2002 vs 2008)

Brazil and India are coming together ...

BUSINESS IN THE INDIA-BRAZIL CORRIDOR

USD MILLION (FOB BASIS IN THE CASE OF TRADE)

Bilateral Investments Bilateral Trade

183

430

2002 2007

CAGR*=19%

2002 2008

4685

1227

CAGR*=25%

573

654

1102

3563

Brazil to India

India to Brazil

Major Indo-Brazilian Joint Ventures

* Compound annual growth rate

All joint ventures have

happened over the last

5 years

• Steel:

• Buses:

Gerdau and Kalyani

Tata and Marcopolo

Oil:

Software:

Petrobras and OMGC

Tata and TBA

Rsl-apt 27/04/2010 12:10

Source: Mackinsey Global Institute, Jai Group

Figure 20 ITO-BPO Competitiveness

A recent study suggests India leads the BPO servicesbut Brazil is also competitive

BPO BUSINESS RANKING

SCLE OF 1.0 TO 5.0 WHERE 1 IS THE MOST ATTRACTIVE AND 5 IS THE LEAST ATTRACTIVE

Rsl-apt 27/04/2010 12:10

Simple Average Shared Services Exports Size of Market for IT and BPI Employee in IT services

India

Brazil

China

Poland

Russia

Hungary

Malaysia

Chile

Mexico

Czech

2.0

3.2

3.2

4.0

4.0

4.2

4.3

4.5

4.5

4.7

2.0

3.5

3.0

4.0

3.5

6.0

6.0

4.5

4.0

6.0

1.0

3.0

4.0

4.0

4.0

3.0

4.0

4.0

6.0

4.0

3.0

3.0

2.5

4.0

4.5

4.5

4.0

6.0

4.5

6.0

Conf

eren

ce P

roce

edin

gs


34

lasting partnerships. At the same time, the Latin American market has undergone a paradigm shift coming out of its boom and bust cycles and volatility. It is now set on a sustainable course of stability and growth.

Over ten leading Indian IT firms are already operating in the LAC or are planning to start operations in the coming year. These firms have employed over 10,000 employees in the LAC region.

Indian investments in the LAC IT-BPO sector is governed by:

ØThe region’s geographical proximity with North America, India’s major market.

ØAbundance of trainable human resources

ØCost structure that is comparable to India

ØMulti lingual capabilities

ØSpanish

ØPortuguese

ØDecent infrastructure

ØGDC for serving European markets

ØGood markets for some competitive home grown software products (Infy – Finnacle,i-Flex).

Stepping up bilateral engagements in this sector will call for the following:

Ø

(i) Invest in increasing local operations; (ii) create local ‘brand’ that customers can associate with; (iii) emphasis on having as many locals fill in very many positions.

Ø (i) seamless processing of business visa and Work permits;(ii) remove rigid labour laws that lead to increase on cost of employee; (iii) resourcing – finding right people in new territory; (iv) managing training & development costs.

Demands for Latin American professionals with Internetworking skills will outpace supply by nearly 27% by 2010. Brazil is seeing a shortage of 44,000 IT professionals and Mexico, 28,000 professionals.

Customisation of end products & services as per needs of LAC customers:

Streamlining of HR issues:


India and the LAC countries were

heavily dependent on the US and

European countries for the supply of

medical equipment. Joint initiatives in

this area will help both regions

Conf

eren

ce P

roce

edin

gsth4 CII India-Latin America and Caribbean (LAC) Conclave

Figure 18 India and LAC - Partnership

Some concerns that need to be addressed

Indian presence in LAC

• More then 10 leading firms (IT) already have a presence in LAC or are planning to start operations in the coming year.

• Indian IT companies are employing over 10000 employees in the LAC region.• Leveraging local market as well as 12/12 business model

How can Indian IT work with LAC ?

• Its proximity with North America, India’s major market. • Very good near shore option • Abundance of trainable human resources • Cost structure that is comparable to India• Multi lingual capabilities

– Spanish – Portuguese

• Decent infrastructure • GDC for serving European markets• Good markets for some competitive home grown software products (Infy –

Finnacle, i-Flex)

Areas of Partnership for Indian Firms with LAC Companies

• Customize our end products & services as per needs of LAC customers • Invest in increasing local operations • Create local ‘brand’ that customers can associate with • Emphasis on having as many locals fill in very many positions

Source : NASSCOM

HR issues

• Business visa & Work permits – have cumbersome & time consuming process. In some cases it takes 2-3 months of processing time

• Rigid labour laws that lead to increase on cost of employee • Resourcing – finding right people in new territory • Training & Development costs

Infrastructure issues

• Simplifying Development Center (DC) set up.

Connectivity

• Coverage across continent • Expensive • Time consuming • Frequent power and water supply issues

Taxation issues

• Withholding taxes• Totalisation treaty between nations

Cultural issues

35

Ø simplify setting up of Development Centers (DCs)

Ø

Ø reduction of withholding taxes

Ø

The panel recommended three key steps to boost the India-LAC IT/ITeS partnership:

ØInvestment in technical education & skills

ØStrengthening of markets

ØInformation sharing & intelligence.

In terms of countrys-specific engagement in the IT-BPO sector, Brazil could be a key partner for India. Business relations between India and Brazil are on the upswing as during 2002- 2008 bilateral trade registered a growth of 25% (CAGR) and bilateral investments grew at 12% (CAGR).

Like India, Brazil is also improving its position in the IT-BPO industry and has overtaken China in many aspects. However, among the emerging economies, India is still the leader in the BPO industry. Brazil offers huge investment opportunity to Indian companies as the county is the gateway to LAC region. Besides, Brazil has shown consistency in the GDP growth for the past few years. Figure 19 shows the rising level of India-Brazil bilateral trade and investment ties.

In terms of IT-BPO competitiveness, Figure 20 shows the relative strengths of India and Brazil.

Buenos Aires provides compel l ing opportunities for Indian investments in the IT-BPO sector. The city offers excellent bilingual human capital with advanced skills, and educational coverage comparable with many OECD countries. In addition, the city boasts of advanced in f rast ructure , th ree international airports, and excellent public utility network.

Infrastructure issues:

Improved connectivity.

Taxation issues:

Totalisation treaty between nations

Source: CISCO, Presentation :India & LACsectoral synergies in IT & ITeSBy Mr Ninad Karpe, MD & CEO, Aptech

Latam Skill Shortage in Networking Field

Demand for Latin American professionals

with Internetworking skills will outpace

supply by nearly 27 percent by 2010:

ØBrazil: shortage of 44,000

ØMexico: shortage of 28,000

Source: Unctad, Secex, Indian Department of Commerce, Jai Group Analysis, Jai Group

Figure 19 India-Brazil bilateral trade and investment flows (2002 vs 2008)

Brazil and India are coming together ...

BUSINESS IN THE INDIA-BRAZIL CORRIDOR

USD MILLION (FOB BASIS IN THE CASE OF TRADE)

Bilateral Investments Bilateral Trade

183

430

2002 2007

CAGR*=19%

2002 2008

4685

1227

CAGR*=25%

573

654

1102

3563

Brazil to India

India to Brazil

Major Indo-Brazilian Joint Ventures

* Compound annual growth rate

All joint ventures have

happened over the last

5 years

• Steel:

• Buses:

Gerdau and Kalyani

Tata and Marcopolo

Oil:

Software:

Petrobras and OMGC

Tata and TBA

Rsl-apt 27/04/2010 12:10

Source: Mackinsey Global Institute, Jai Group

Figure 20 ITO-BPO Competitiveness

A recent study suggests India leads the BPO servicesbut Brazil is also competitive

BPO BUSINESS RANKING

SCLE OF 1.0 TO 5.0 WHERE 1 IS THE MOST ATTRACTIVE AND 5 IS THE LEAST ATTRACTIVE

Rsl-apt 27/04/2010 12:10

Simple Average Shared Services Exports Size of Market for IT and BPI Employee in IT services

India

Brazil

China

Poland

Russia

Hungary

Malaysia

Chile

Mexico

Czech

2.0

3.2

3.2

4.0

4.0

4.2

4.3

4.5

4.5

4.7

2.0

3.5

3.0

4.0

3.5

6.0

6.0

4.5

4.0

6.0

1.0

3.0

4.0

4.0

4.0

3.0

4.0

4.0

6.0

4.0

3.0

3.0

2.5

4.0

4.5

4.5

4.0

6.0

4.5

6.0

Conf

eren

ce P

roce

edin

gs


34

lasting partnerships. At the same time, the Latin American market has undergone a paradigm shift coming out of its boom and bust cycles and volatility. It is now set on a sustainable course of stability and growth.

Over ten leading Indian IT firms are already operating in the LAC or are planning to start operations in the coming year. These firms have employed over 10,000 employees in the LAC region.

Indian investments in the LAC IT-BPO sector is governed by:

ØThe region’s geographical proximity with North America, India’s major market.

ØAbundance of trainable human resources

ØCost structure that is comparable to India

ØMulti lingual capabilities

ØSpanish

ØPortuguese

ØDecent infrastructure

ØGDC for serving European markets

ØGood markets for some competitive home grown software products (Infy – Finnacle,i-Flex).

Stepping up bilateral engagements in this sector will call for the following:

Ø

(i) Invest in increasing local operations; (ii) create local ‘brand’ that customers can associate with; (iii) emphasis on having as many locals fill in very many positions.

Ø (i) seamless processing of business visa and Work permits;(ii) remove rigid labour laws that lead to increase on cost of employee; (iii) resourcing – finding right people in new territory; (iv) managing training & development costs.

Demands for Latin American professionals with Internetworking skills will outpace supply by nearly 27% by 2010. Brazil is seeing a shortage of 44,000 IT professionals and Mexico, 28,000 professionals.

Customisation of end products & services as per needs of LAC customers:

Streamlining of HR issues:


India and the LAC countries were

heavily dependent on the US and

European countries for the supply of

medical equipment. Joint initiatives in

this area will help both regions

Conf

eren

ce P

roce

edin

gs


Figure 18 India and LAC - Partnership

Some concerns that need to be addressed

Indian presence in LAC

• More then 10 leading firms (IT) already have a presence in LAC or are planning to start operations in the coming year.

• Indian IT companies are employing over 10000 employees in the LAC region.• Leveraging local market as well as 12/12 business model

How can Indian IT work with LAC ?

• Its proximity with North America, India’s major market. • Very good near shore option • Abundance of trainable human resources • Cost structure that is comparable to India• Multi lingual capabilities

– Spanish – Portuguese

• Decent infrastructure • GDC for serving European markets• Good markets for some competitive home grown software products (Infy –

Finnacle, i-Flex)

Areas of Partnership for Indian Firms with LAC Companies

• Customize our end products & services as per needs of LAC customers • Invest in increasing local operations • Create local ‘brand’ that customers can associate with • Emphasis on having as many locals fill in very many positions

Source : NASSCOM

HR issues

• Business visa & Work permits – have cumbersome & time consuming process. In some cases it takes 2-3 months of processing time

• Rigid labour laws that lead to increase on cost of employee • Resourcing – finding right people in new territory • Training & Development costs

Infrastructure issues

• Simplifying Development Center (DC) set up.

Connectivity

• Coverage across continent • Expensive • Time consuming • Frequent power and water supply issues

Taxation issues

• Withholding taxes• Totalisation treaty between nations

Cultural issues

36

Proceedings

A growing middle class has a direct bearing on the overall demand for medicines.

India and the LAC countries have seen a significant expansion of the middle class

leading to a rapid increase in demand for generic drugs. But there are still

challenges to be overcome, such as, poorly funded healthcare institutions, talent

loss, archaic regulatory systems, and limited innovations.

The panel noted that China is a fine example of how the government supports

the private pharma companies to build their competitiveness in the domestic

and global markets. This is particularly true of Chinese medical devices

manufacturers.

The Indian pharma market is projected to grow at 12-14% in the next three years

owing to:

ØHigh disease Prevalence: (i) fastest growing diabetic & hypertensive

population; (ii) high incidence of oncology and other chronic ailments

ØIncreased healthcare access

ØImproving access and growth rates in rural India

ØDoubling of geriatric population in next 15 years

ØIncreasing capacity to spend

ØHuge middle class with vigorous buying capacity

ØOpening up of reimbursement avenues.

It was cited that both India and the LAC countries are heavily dependent on the

US and European countries for the supply of medical equipment. Joint initiatives

in this area will help both regions. India has made strident progress in the area of

medical equipment and devices in recent years. For instance, India produces

coronary stents at a fifth of what it costs in the US. This is particularly important

Session Chair Mr J P Dutta, Chief Operating Officer, Sahajanand

Medical Technologies Pvt Ltd

Panel Mr Miguel Angel Ramirez Ramos, Ambassador of Cuba

in India

Mr Joaquin Benitez, CEO, World Pharma, Mexico

Mr Walter Jose Lafratta, Director, WJL Consultorio de

Niegocios International Brazil

SECTORAL SYNERGIES IN PHARMA,

HEALTHCARE & MEDICAL EQUIPMENT


nfer

ence

Pro

ceed

ings

37

since an increasing percentage of the Indian population is getting exposed to

coronary diseases.

The cost of development of modern pharma and medical devices in developed

countries are beyond the reach of majority of the population of India and LAC.

India was earlier 100% dependent for critical cardiac care (angioplasty) related

technologies and supply and the cost of the treatment per patient was in the

range of $8,000-10,000. Today, coronary stent developed in India and being

exported to 25 countries and the cost per stent has come down to $2,000. This

independence saved and generated foreign currency to the tune of $325 million

in the span of 10 years with just one product range.

India also has the potential of emerging as a hub of clinical trials, whereas LAC

could be drawn into life sciences research fold where India has a good track

record.

It was cited that LAC could import the bulk of its APIs, which serve as raw

materials for drugs and pharmaceuticals, from India, and recommended the

establishment of large-scale inter-continental multi-centres for clinical trials.

Indian herbal remedies could also find ready markets in the LAC region, whereas

Indian medical devices would also find takers in the LAC markets.

Mr. Walter Jose Lafratta, Director, WJL Consultoria de Negocios, International, Brazil; Mr. J P Dutta, Chief Operating Officer, Sahajanand Medical Technologies Pvt Ltd, India; H.E. Mr. Miguel Angel Ramirez Ramos, Ambassador of Cuba in India; Mr. Joaquin Benitez, Chief Executive Officer, World Pharma, Mexico; at Session on India & LAC: Sectoral Synergies in Pharma, Healthcare and Medical Equipment


Conf

eren

ce P

roce

edin

gs

36

Proceedings

A growing middle class has a direct bearing on the overall demand for medicines.

India and the LAC countries have seen a significant expansion of the middle class

leading to a rapid increase in demand for generic drugs. But there are still

challenges to be overcome, such as, poorly funded healthcare institutions, talent

loss, archaic regulatory systems, and limited innovations.

The panel noted that China is a fine example of how the government supports

the private pharma companies to build their competitiveness in the domestic

and global markets. This is particularly true of Chinese medical devices

manufacturers.

The Indian pharma market is projected to grow at 12-14% in the next three years

owing to:

ØHigh disease Prevalence: (i) fastest growing diabetic & hypertensive

population; (ii) high incidence of oncology and other chronic ailments

ØIncreased healthcare access

ØImproving access and growth rates in rural India

ØDoubling of geriatric population in next 15 years

ØIncreasing capacity to spend

ØHuge middle class with vigorous buying capacity

ØOpening up of reimbursement avenues.

It was cited that both India and the LAC countries are heavily dependent on the

US and European countries for the supply of medical equipment. Joint initiatives

in this area will help both regions. India has made strident progress in the area of

medical equipment and devices in recent years. For instance, India produces

coronary stents at a fifth of what it costs in the US. This is particularly important

Session Chair Mr J P Dutta, Chief Operating Officer, Sahajanand

Medical Technologies Pvt Ltd

Panel Mr Miguel Angel Ramirez Ramos, Ambassador of Cuba

in India

Mr Joaquin Benitez, CEO, World Pharma, Mexico

Mr Walter Jose Lafratta, Director, WJL Consultorio de

Niegocios International Brazil

SECTORAL SYNERGIES IN PHARMA,

HEALTHCARE & MEDICAL EQUIPMENT


Conf

eren

ce P

roce

edin

gs

37

since an increasing percentage of the Indian population is getting exposed to

coronary diseases.

The cost of development of modern pharma and medical devices in developed

countries are beyond the reach of majority of the population of India and LAC.

India was earlier 100% dependent for critical cardiac care (angioplasty) related

technologies and supply and the cost of the treatment per patient was in the

range of $8,000-10,000. Today, coronary stent developed in India and being

exported to 25 countries and the cost per stent has come down to $2,000. This

independence saved and generated foreign currency to the tune of $325 million

in the span of 10 years with just one product range.

India also has the potential of emerging as a hub of clinical trials, whereas LAC

could be drawn into life sciences research fold where India has a good track

record.

It was cited that LAC could import the bulk of its APIs, which serve as raw

materials for drugs and pharmaceuticals, from India, and recommended the

establishment of large-scale inter-continental multi-centres for clinical trials.

Indian herbal remedies could also find ready markets in the LAC region, whereas

Indian medical devices would also find takers in the LAC markets.

Mr. Walter Jose Lafratta, Director, WJL Consultoria de Negocios, International, Brazil; Mr. J P Dutta, Chief Operating Officer, Sahajanand Medical Technologies Pvt Ltd, India; H.E. Mr. Miguel Angel Ramirez Ramos, Ambassador of Cuba in India; Mr. Joaquin Benitez, Chief Executive Officer, World Pharma, Mexico; at Session on India & LAC: Sectoral Synergies in Pharma, Healthcare and Medical Equipment


Conf

eren

ce P

roce

edin

gs

38

Cuba’s healthcare achievements came up for discussion, wherein it was stated

that the central American country has health standards that are comparable with

the advanced countries.

Cuba launched an immunisation programme in 1992 that extended to 2006. This

included 13 vaccinations which led to the eliminations of diseases like meningitis

among children. The West Havana Pole in Cuba which is linked to 52 specialised

institutes has led the way in pharma and biotech research.

West Havana Pole has developed 33 vaccines against infectious diseases, 33

oncological products, and 18 cardiovascular products. The development of

synthetic vaccines out of carbohydrates was described as a “sweet victory”.

Cuba has also developed a vaccine to fight head and neck cancer, which has

found its way even into the US market.

Cuba could play a key role in providing affordable source of advanced science to

transform generic producing entities into innovative biotech companies. The

interaction of Cuban biotech research centres with Biocon, Serum Institute,

Panacea, CIPLA, Keepharma, USV, among others is a clear indication of this

trend.

Cuban research centers and biotech companies have a lot to offer Indian

companies in the field of generic engineered protein erythropoietin, including

biotechnology products; hepatitis B and meningitis B vaccines; a skin growth

factor; interferon; melagenina, ateromixol (cholesterolemic product),

thrombosis and heart attack medicines; and AIDS treatments, among others.

Cuba has a huge pipeline ready to share with Indian companies, particularly in

high advanced area, like monoclonal antibodies, recombinant vaccines,

therapeutic cancer vaccines and others.

Cuban pharma export sales totaled $340 million in 2008, and the figure is

estimated to reach $500 million by 2012. On the other hand, Cuba, with its strong

health system, its health indicators and immunisation programme, as well as big

imports for national health procurement, is an important market for Indian

generics and active pharmaceutical ingredients.

Cuban imports are not only meant for the Cuban health system, but also for the

health programs that our country carries out in many Third World nations, like

Haiti, therefore its volume is significantly bigger.

The growing role of ALBA (Alliance of Bolivarian States of the Americas), and the

leading role that the Cuban regulatory agency CECMED, plays in the new ALBA

regulatory body is a further advantage for registrations of new medications in the

region. Those products that have successfully registered in Cuba will have an

easier entry into the markets of 13 LAC countries, including Venezuela, Ecuador,

Nicaragua and others.

As of now, Indian pharma products reach Cuba via third countries. There is scope

for establishing direct bilateral trade in drugs & pharmaceuticals.


nfer

ence

Pro

ceed

ings

39

The panel noted that India-LAC pharma

trade has grown from $268 million in 2006-

07 to $331 million in 2008-09. In 13 years,

from 1970, India has grown to become a

knowledge base for the global pharma

industry.

Mexico is another key LAC destination for

Indian medical devices and pharma

companies. In Mexico, pharma is a $11-

billion industry, of which $4.4 billion worth

of medicines goes for social security (in

this, $1.7 billion is accounted for by APIs, of

which 40% comes from India), and $6.6

billion comes from MNCs.

Mexico has the practice of self-medication

which fuels demand for medicines, but the

government has now banned sale of

antibiotics over the counter. Mexico is the

15th largest medicine manufacturer but

imports 90% of APIs. Dr Reddy’s Labs has

leveraged this opportunity.

The Mexican Social Security Institute

(IMSS) is the single largest buyer of

finished dosage from pharmaceutical

companies, through regular public tenders

for finished dosage form pharmaceuticals,

held over the year. Over 95% of medicines

procured in Mexico ought to be ‘Made in

Mexico’. Hence it would help Indian pharma

firms to tie-up with local firms in Mexico to

tap this market. Large retail firms like Wal-

Mart are also in the loop for distribution of

medicines, as are medical representatives

who interact with doctors. Mexico has a

sound regulatory environment and plant

visits from USFDA are periodically

followed.

As regards Brazil, the country spends $35

billion on public health programmes

covering a relatively small population of 190

million people. Cost of capital in Brazil is

very high, so Indian investments in the

sector could find ready takers.


Conf

eren

ce P

roce

edin

gs


JV Supported in LAC Region

WOS Supported in LAC Region

Success Stories – Supply of Trucks to Honduras Armed Forces

A state-of-the-art fuel ethanol plant in Colombia, designed, supplied and commissioned by Praj Industries Ltd., Pune, which has an operating subsidiary in Colombia having sizeable market share in ethanol based projects in the region.

Exim Bank supported the JV formed by the Strides Arcolabs Ltd. and the Brazilian drugs producer Cellofarm Ltd., for production of generic drugs. The aim of the plant is to produce drugs towards the treatment of diabetes, cardiology problems and AIDS.

A subsidiary of Vijai Electricals Ltd, was established with the support of Exim Bank, in the North eastern part of Brazil. The main objective of this plant is not only to promote energy efficient transformers that improvises the quality of the power system Brazilian grid but will also aim to produce a carbon free environment.

These vehicles will augment the transport resources of HAF to carry out key poverty eradication programmes and for other humanitarian purposes. Contract financed by Exim Bank under a Line of Credit extended to Govt. of Honduras.

38

Cuba’s healthcare achievements came up for discussion, wherein it was stated

that the central American country has health standards that are comparable with

the advanced countries.

Cuba launched an immunisation programme in 1992 that extended to 2006. This

included 13 vaccinations which led to the eliminations of diseases like meningitis

among children. The West Havana Pole in Cuba which is linked to 52 specialised

institutes has led the way in pharma and biotech research.

West Havana Pole has developed 33 vaccines against infectious diseases, 33

oncological products, and 18 cardiovascular products. The development of

synthetic vaccines out of carbohydrates was described as a “sweet victory”.

Cuba has also developed a vaccine to fight head and neck cancer, which has

found its way even into the US market.

Cuba could play a key role in providing affordable source of advanced science to

transform generic producing entities into innovative biotech companies. The

interaction of Cuban biotech research centres with Biocon, Serum Institute,

Panacea, CIPLA, Keepharma, USV, among others is a clear indication of this

trend.

Cuban research centers and biotech companies have a lot to offer Indian

companies in the field of generic engineered protein erythropoietin, including

biotechnology products; hepatitis B and meningitis B vaccines; a skin growth

factor; interferon; melagenina, ateromixol (cholesterolemic product),

thrombosis and heart attack medicines; and AIDS treatments, among others.

Cuba has a huge pipeline ready to share with Indian companies, particularly in

high advanced area, like monoclonal antibodies, recombinant vaccines,

therapeutic cancer vaccines and others.

Cuban pharma export sales totaled $340 million in 2008, and the figure is

estimated to reach $500 million by 2012. On the other hand, Cuba, with its strong

health system, its health indicators and immunisation programme, as well as big

imports for national health procurement, is an important market for Indian

generics and active pharmaceutical ingredients.

Cuban imports are not only meant for the Cuban health system, but also for the

health programs that our country carries out in many Third World nations, like

Haiti, therefore its volume is significantly bigger.

The growing role of ALBA (Alliance of Bolivarian States of the Americas), and the

leading role that the Cuban regulatory agency CECMED, plays in the new ALBA

regulatory body is a further advantage for registrations of new medications in the

region. Those products that have successfully registered in Cuba will have an

easier entry into the markets of 13 LAC countries, including Venezuela, Ecuador,

Nicaragua and others.

As of now, Indian pharma products reach Cuba via third countries. There is scope

for establishing direct bilateral trade in drugs & pharmaceuticals.


Conf

eren

ce P

roce

edin

gs

39

The panel noted that India-LAC pharma

trade has grown from $268 million in 2006-

07 to $331 million in 2008-09. In 13 years,

from 1970, India has grown to become a

knowledge base for the global pharma

industry.

Mexico is another key LAC destination for

Indian medical devices and pharma

companies. In Mexico, pharma is a $11-

billion industry, of which $4.4 billion worth

of medicines goes for social security (in

this, $1.7 billion is accounted for by APIs, of

which 40% comes from India), and $6.6

billion comes from MNCs.

Mexico has the practice of self-medication

which fuels demand for medicines, but the

government has now banned sale of

antibiotics over the counter. Mexico is the

15th largest medicine manufacturer but

imports 90% of APIs. Dr Reddy’s Labs has

leveraged this opportunity.

The Mexican Social Security Institute

(IMSS) is the single largest buyer of

finished dosage from pharmaceutical

companies, through regular public tenders

for finished dosage form pharmaceuticals,

held over the year. Over 95% of medicines

procured in Mexico ought to be ‘Made in

Mexico’. Hence it would help Indian pharma

firms to tie-up with local firms in Mexico to

tap this market. Large retail firms like Wal-

Mart are also in the loop for distribution of

medicines, as are medical representatives

who interact with doctors. Mexico has a

sound regulatory environment and plant

visits from USFDA are periodically

followed.

As regards Brazil, the country spends $35

billion on public health programmes

covering a relatively small population of 190

million people. Cost of capital in Brazil is

very high, so Indian investments in the

sector could find ready takers.


Conf

eren

ce P

roce

edin

gs


JV Supported in LAC Region

WOS Supported in LAC Region

Success Stories – Supply of Trucks to Honduras Armed Forces

A state-of-the-art fuel ethanol plant in Colombia, designed, supplied and commissioned by Praj Industries Ltd., Pune, which has an operating subsidiary in Colombia having sizeable market share in ethanol based projects in the region.

Exim Bank supported the JV formed by the Strides Arcolabs Ltd. and the Brazilian drugs producer Cellofarm Ltd., for production of generic drugs. The aim of the plant is to produce drugs towards the treatment of diabetes, cardiology problems and AIDS.

A subsidiary of Vijai Electricals Ltd, was established with the support of Exim Bank, in the North eastern part of Brazil. The main objective of this plant is not only to promote energy efficient transformers that improvises the quality of the power system Brazilian grid but will also aim to produce a carbon free environment.

These vehicles will augment the transport resources of HAF to carry out key poverty eradication programmes and for other humanitarian purposes. Contract financed by Exim Bank under a Line of Credit extended to Govt. of Honduras.

41

Exim Bank’s partners in the LAC region are:

ØCABEI, Honduras

ØCaribbean Association of Industry & Commerce, Trinidad & Tobago

ØAndean Development Corporation (CAF)

ØBanco National de Comercio Exterior, Mexico

ØBanco de Inversion Y Comercio Exterior, Argentina

ØBanco Mercantil, Venezuela.

Among the key project financing entities in LAC, the CRUSA Foundation for

Cooperation, Costa Rica, merits special mention. CRUSA was born as a model of

cooperation through public-private partnerships in 1996. At present, CRUSA is

involved in 223 projects in education, 91 projects in science and technology, 70

projects in the environment and 94 projects in strategic capacity.

CRUSA is focusing upon climate change, education, use of readily available

communication technologies in education and entrepreneurship, renewable

energies and efficient use of energy and biotechnology.

Of key importance is CAF, a multilateral financial institution that mobilises

resources from international markets to Latin America to provide multiple

banking services to both public and private clients of its shareholder countries.

Its main focus is sustainable economic development and regional integration.

Mr. Michael Penfold, Associate Director, Vice Presidency, for Development & Public Policy, Corporacion Andina de Fomento (CAF), Venezuela; Mr. Camilo Acosta, Senior Programme Officer for Science and Technology, CRUSA Foundation for Cooperation, Costa Rica; Mr. Prabhakar Dalal, Executive Director, EXIM Bank, India; Mr. Adam Stepan, Managing Director, NLP Consultants Inc., Brazil conducting a Session on Catalyzing Project Partnerships through Financial Mechanisms


Conf

eren

ce P

roce

edin

gs

40

ThemeFinancing export and import of goods and services and execution of projects plays a

catalytic role in enhancing two-way trade and investments and building long-term

relationships between the regions. Institutions like EXIM Bank and Ministry of

Commerce & Industry are playing a pivotal role in promoting and financing Indian

companies in their endeavour to build business partnerships with the LAC region.

Proceedings

Exim Bank is a partner in India’s globalisation by proving technology, capital, raw

materials and capital goods. Besides, it also provides help in product

development, production, marketing, pre-shipment support and post-shipment.

Exim Bank supported the JV formed by the Strides Arcolabs Ltd and the Brazilian

drugs producer Cellofarm Ltd for production of generic drugs. The aim of the

plant is to produce drugs towards the treatment of diabetes, cardiology

problems and AIDS.

To illustrate another case, a subsidiary of Vijai Electricals

Ltd was established with the support of Exim Bank, in

the North-eastern part of Brazil. The main objective of

this plant is not only to promote energy efficient

transformers that improvises the quality of the power

system Brazilian grid but also aim to produce a carbon

free environment.

Session Chair Mr Prabhakar Dalal, Executive Director, EXIM Bank of

India

Panel Mr Camilo Acosta, Senior Programme Officer for

Science and Technology, CRUSA Foundation for

Cooperation, Costa Rica

Mr Michael Penfold, Associate Director, Vice Presidency

for Development & Public Policy, Corporacion Andina de

Fomento (CAF), Venezuela

Mr Adam Stepan, Managing Director, NLP Consultant

Inc, Brazil

CATALYSING PROJECT PARTNERSHIPS

THROUGH FINANCIAL MECHNISMS


nfer

ence

Pro

ceed

ings

Mr Prabhakar Dalal,Executive Director, EXIM Bank of India

India’s total merchandise trade has

increased by more than four-fold

from $114 billion in 2003 to $489

billion in 2009, while total exports

has increased more than three-fold


billion in 2009

41

Exim Bank’s partners in the LAC region are:

ØCABEI, Honduras

ØCaribbean Association of Industry & Commerce, Trinidad & Tobago

ØAndean Development Corporation (CAF)

ØBanco National de Comercio Exterior, Mexico

ØBanco de Inversion Y Comercio Exterior, Argentina

ØBanco Mercantil, Venezuela.

Among the key project financing entities in LAC, the CRUSA Foundation for

Cooperation, Costa Rica, merits special mention. CRUSA was born as a model of

cooperation through public-private partnerships in 1996. At present, CRUSA is

involved in 223 projects in education, 91 projects in science and technology, 70

projects in the environment and 94 projects in strategic capacity.

CRUSA is focusing upon climate change, education, use of readily available

communication technologies in education and entrepreneurship, renewable

energies and efficient use of energy and biotechnology.

Of key importance is CAF, a multilateral financial institution that mobilises

resources from international markets to Latin America to provide multiple

banking services to both public and private clients of its shareholder countries.

Its main focus is sustainable economic development and regional integration.

Mr. Michael Penfold, Associate Director, Vice Presidency, for Development & Public Policy, Corporacion Andina de Fomento (CAF), Venezuela; Mr. Camilo Acosta, Senior Programme Officer for Science and Technology, CRUSA Foundation for Cooperation, Costa Rica; Mr. Prabhakar Dalal, Executive Director, EXIM Bank, India; Mr. Adam Stepan, Managing Director, NLP Consultants Inc., Brazil conducting a Session on Catalyzing Project Partnerships through Financial Mechanisms


Conf

eren

ce P

roce

edin

gs

40

ThemeFinancing export and import of goods and services and execution of projects plays a

catalytic role in enhancing two-way trade and investments and building long-term

relationships between the regions. Institutions like EXIM Bank and Ministry of

Commerce & Industry are playing a pivotal role in promoting and financing Indian

companies in their endeavour to build business partnerships with the LAC region.

Proceedings

Exim Bank is a partner in India’s globalisation by proving technology, capital, raw

materials and capital goods. Besides, it also provides help in product

development, production, marketing, pre-shipment support and post-shipment.

Exim Bank supported the JV formed by the Strides Arcolabs Ltd and the Brazilian

drugs producer Cellofarm Ltd for production of generic drugs. The aim of the

plant is to produce drugs towards the treatment of diabetes, cardiology

problems and AIDS.

To illustrate another case, a subsidiary of Vijai Electricals

Ltd was established with the support of Exim Bank, in

the North-eastern part of Brazil. The main objective of

this plant is not only to promote energy efficient

transformers that improvises the quality of the power

system Brazilian grid but also aim to produce a carbon

free environment.

Session Chair Mr Prabhakar Dalal, Executive Director, EXIM Bank of

India

Panel Mr Camilo Acosta, Senior Programme Officer for

Science and Technology, CRUSA Foundation for

Cooperation, Costa Rica

Mr Michael Penfold, Associate Director, Vice Presidency

for Development & Public Policy, Corporacion Andina de

Fomento (CAF), Venezuela

Mr Adam Stepan, Managing Director, NLP Consultant

Inc, Brazil

CATALYSING PROJECT PARTNERSHIPS

THROUGH FINANCIAL MECHNISMS


Conf

eren

ce P

roce

edin

gs

Mr Prabhakar Dalal,Executive Director, EXIM Bank of India

India’s total merchandise trade has

increased by more than four-fold


billion in 2009, while total exports

has increased more than three-fold


billion in 2009

43

H.E. Mr. Mauricio Macri Addressingthe audience at the valedictory

Proceedings

Argentina is creating a mini-Bangalore in the southern part of the capital city of

Buenos Aires, where Indian IT major TCS was the first company to set up

operations. Mr Mauricio Macri acknowledged the significant advances that the

Indian IT / ITeS industry has made globally and invited more Indian firms to invest

in Argentina.

Mr Macri also pointed to Argentina’s comparative strengths in

agriculture and urged Indian firms to invest in the south

American country. He added that physical infrastructure

development holds the key to Argentina’s growth process. With

fresh investments in this domain, Argentina would be able to

triple its industrial and agricultural output and exports.

Session Chair Mr Shubhendu Amitabh, Co-Chairman, CII LAC

Committee and Senior President, The Aditya Birla Group

Special Address Mr Mauricio Macri, Head of Government of Buenos

Aires, Argentina

Recommendations Mr Praful Talera, Member, CII LAC Committee and

Executive Director, Dynamic Logistics

VALEDICTORY SESSION

Mr. Praful Talera; H.E. Mr. Mauricio Macri, Head of Government of Buenos Aires, Argentina; Mr. Shubhendu Amitabh at Valedictory


Conf

eren

ce P

roce

edin

gs

CAF’s main clients are governments,

financial institutions, public enterprises and

private enterprises, and the institution

provides short, medium and long term

loans. Besides project financing, it also

provide technical support. CAF is the main

multilateral source of infrastructure

financing for LATAM.

In Brazil, owing to the recent global financial

crisis, 75% of the firms are family-owned

(including 10 of the 50 largest Brazilian

companies), and they are having difficulty

financing their working capital and other

operations with debt or equity capital.

In addition, due to its own ambitious capital

expenditure programme, the Brazilian government competes with private

companies to obtain debt financing.

There are only 80-100 private equity funds active in Brazil, and collectively only

4% of Brazil’s GDP is invested in private equity funds, significantly less than

China (10%), India (13%), South Korea (37%) or South Africa (57%) and not

enough to bridge the financing gap.

Due to the scarcity of capital and the flight from equity investments by many

investors, privately-held companies are generally undervalued in Brazil,

providing private equity investors with an excellent opportunity to acquire these

targets at attractive prices.

The panel recommended:

ØCooperation between EXIM Bank of India and BNDES to facilitate access

to trade finance for local firms in India, Brazil and LATAM region.

ØFacilitating access to information via local banking institutions.

ØCreation of an event that would connect and begin the exchange of ideas

between players in Indian and Brazilian PE markets and investment

banking communities.

Source : DGCIS/MoCI; Total imports from FY07 onwards includes oil imports • Total trade with LAC region rose more than three-folds;• During FY09, exports to LAC stood at US$ 6.2 bn, and Imports at US$ 10 bn;• Argentina, Trinidad & TobagoBy Prabhakar Dalal, Executive Director, EXIM Bank, India

Figure 21 India-LAC: Significant Buoyancy in Bilateral Trade Relations

2.2 3.0

4.3

5.76.2

2.1 2.7

6.16.6

10.0

4.3

5.7

10.4

12.3

16.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2004-05 2005-06 2006-07 2007-08 2008-09

Export Import Total Trade


42

Conf

eren

ce P

roce

edin

gs

At a macro-level, Exim Bank identified the following areas of cooperation in key LAC countries:

Ø Automobiles, Energy/Biofuels, Mining, IT & Pharmaceuticals

ØICT, Pharmaceuticals, Renewable Energy & Engineering

Ø ICT, Pharmaceuticals, Chemicals, Autoparts, Biotechnology & Minerals

Ø Chemicals, Pharmaceuticals, Automobiles, Machinery & ICT

Ø ICT, Automobiles, Energy, Pharmaceuticals & Machinery

Ø ICT, Pharmaceuticals, Chemicals, Minerals & Engineering

ØICT, Pharmaceuticals, Minerals, Hydrocarbons & Engineering

Ø Pharmaceuticals, food processing, Iron &Steel, & Petrochemicals.

Brazil:

Chile:

Mexico:

Colombia:

Venezuela:

Argentina:

Peru:

Trinidad & Tobago:

44

Monica Socolovsky, Argentine Fashion

Designer and Entrepreneur, who made her

97th visit to India, attended the Conclave and

was recognized at the Conclave for her

distinguished role in the promotion of India-

LAC business and cultural ties. Monica’s

faith and spiritual pursuits brought her to

India for the first time in 1979. On her return,

she started SATHYA Fashion, the design

company, named after Sai Baba, and now an

established Argentine brand working in art,

design and production of women's apparel.

Monica combines the machine-made fabrics

with the exquisite hand-made designs and

embroideries of India. Monica’s faith in Sai

Baba and her business with India have made

her passionate about India. Monica is keen to

promote collaboration and exchanges

between the Indian and Argentine fashion

institutes and designers.

Ms. Monica Socolovsky, was felicitated byMr. Shubhendu Amitabh, CO Chairman CII LAC Committee, and Senior President The Aditya Birla Group, for distinguished role in the promotion of India-LAC business and cultural ties, at 4th CII India Latin America and Caribbean Conclave

Mr Macri invited Indian infrastructure

companies to consider participating in

Argentina’s infrastructure projects. He also

focused attention on the opportunity for bilateral

cooperation in tourism, which will increase with

better infrastructural support. “Come to

Argentina and look for the opportunities,” he

said.

The session chairman announced that the 5th

CII India-Latin America and Caribbean (LAC)

Conclave will be organised during February 24-

25, 2011. The venue and location of the Conclave

will be decided soon.

Mr Amitabh said that over 200 participants,

representing the Indian and LAC ministries and

government departments, business groups,

financial institutions and social organizations,

had engaged in interactive discussions at the

Conclave and projects worth over US$10 billion

were discussed. Proposals for M&As with total

estimated sales of $283 million were discussed,

covering sectors such as IT/ITeS, Healthcare,

Biotech, Agri-Business, Forestry, Auto and

Steel.

Mr Praful Talera, presented the Conclave

recommendations.

Argentina is creating a mini-

Bangalore in the southern

part of the capital city of

Buenos Aires. TCS was the

first company to set up

operations in this area and

we would like more Indian

firms to invest in Argentina.

Come to Argentina and look for the

opportunities

– Mauricio Macri

Head of Government of Buenos Aires, Argentina


nfer

ence

Pro

ceed

ings

Argentine Fashion Designer andEntrepreneur felicitated

at the Conclave valedictory

Conf

eren

ce P

roce

edin

gs

BUSINESS MEETINGS

44

Monica Socolovsky, Argentine Fashion

Designer and Entrepreneur, who made her

97th visit to India, attended the Conclave and

was recognized at the Conclave for her

distinguished role in the promotion of India-

LAC business and cultural ties. Monica’s

faith and spiritual pursuits brought her to

India for the first time in 1979. On her return,

she started SATHYA Fashion, the design

company, named after Sai Baba, and now an

established Argentine brand working in art,

design and production of women's apparel.

Monica combines the machine-made fabrics

with the exquisite hand-made designs and

embroideries of India. Monica’s faith in Sai

Baba and her business with India have made

her passionate about India. Monica is keen to

promote collaboration and exchanges

between the Indian and Argentine fashion

institutes and designers.

Ms. Monica Socolovsky, was felicitated byMr. Shubhendu Amitabh, CO Chairman CII LAC Committee, and Senior President The Aditya Birla Group, for distinguished role in the promotion of India-LAC business and cultural ties, at 4th CII India Latin America and Caribbean Conclave

Mr Macri invited Indian infrastructure

companies to consider participating in

Argentina’s infrastructure projects. He also

focused attention on the opportunity for bilateral

cooperation in tourism, which will increase with

better infrastructural support. “Come to

Argentina and look for the opportunities,” he

said.

The session chairman announced that the 5th

CII India-Latin America and Caribbean (LAC)

Conclave will be organised during February 24-

25, 2011. The venue and location of the Conclave

will be decided soon.

Mr Amitabh said that over 200 participants,

representing the Indian and LAC ministries and

government departments, business groups,

financial institutions and social organizations,

had engaged in interactive discussions at the

Conclave and projects worth over US$10 billion

were discussed. Proposals for M&As with total

estimated sales of $283 million were discussed,

covering sectors such as IT/ITeS, Healthcare,

Biotech, Agri-Business, Forestry, Auto and

Steel.

Mr Praful Talera, presented the Conclave

recommendations.

Argentina is creating a mini-

Bangalore in the southern

part of the capital city of

Buenos Aires. TCS was the

first company to set up

operations in this area and

we would like more Indian

firms to invest in Argentina.

Come to Argentina and look for the

opportunities

– Mauricio Macri

Head of Government of Buenos Aires, Argentina


Conf

eren

ce P

roce

edin

gs

Argentine Fashion Designer andEntrepreneur felicitated

at the Conclave valedictory

Conf

eren

ce P

roce

edin

gsCo

nfer

ence

Pro

ceed

ings

Conf

eren

ce P

roce

edin

gs

BUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGSBUSINESS MEETINGS

Our Partners

Government of India


February 24-25, 2011 : Hotel ITC Maurya, New Delhi

Register your interest with

Deepika ErasmusHead-Latin America & Caribbean

Confederation of Indian IndustryThe Mantosh Sondhi Centre, 23, Institutional Area

Lodi Road, New Delhi - 110 003Tel: 011-24629994-7 Ext # 469, 24653366 (D)

Fax: 011-24601298/24626149Email: [email protected]

www.cii.in

Announcing

5th


C a t a l y s i n g Pa r t n e r s h i p s

Since 1895

Our OrganisationThe Confederation of Indian Industry (CII) works to create and sustain an

environment conducive to the growth of industry in India, partnering

industry and government alike through advisory and consultative

processes.

CII is a non-government, not-for-profit, industry led and industry

managed organisation, playing a proactive role in India 's development

process. Founded over 115 years ago, it is Indi's premier business

association, with a direct membership of over 8100 organisations from

the private as well as public sectors, including SMEs and MNCs, and an

indirect membership of over 90,000 companies from around 400

national and regional sectoral associations.

CII catalyses change by working closely with government on policy

issues, enhancing efficiency, competitiveness and expanding business

opportunities for industry through a range of specialised services and

global linkages. It also provides a platform for sectoral consensus

building and networking. Major emphasis is laid on projecting a positive

image of business, assisting industry to identify and execute corporate

citizenship programmes. Partnerships with over 120 NGOs across the

country carry forward our initiatives in integrated and inclusive

development, which include health, education, livelihood, diversity

management, skill development and water, to name a few.

CII has taken up the agenda of “Business for Livelihood” for the year

2010-11. Businesses are part of civil society and creating livelihoods is the

best act of corporate social responsibility. Looking ahead, the focus for

2010-11 would be on the four key Enablers for Sustainable Enterprises:

Education, Employability, Innovation and Entrepreneurship. While

Education and Employability help create a qualified and skilled

workforce, Innovation and Entrepreneurship would drive growth and

employment generation.

With 64 offices in India including 7 Centres of Excellence, 9 overseas in

Australia, Austria, China, France, Germany, Japan, Singapore, UK, and

USA, and institutional partnerships with 223 counterpart organisations in

90 countries, CII serves as a reference point for Indian industry and the

international business community.

Confederation of Indian Industry

The Mantosh Sondhi Centre

23, Institutional Area, Lodi Road, New Delhi – 110 003 (India)

Tel: 91 11 24629994-7 • Fax: 91 11 24626149

email: [email protected] • Website: www.cii.in

Reach us via our Membership Helpline: 00-91-11-435 46244 / 00-91-99104 46244

CII Helpline Toll free No: 1800-103-1244

report - confederation of indian...

Documents