India and Argentina share cordial relations, spanning across political, economic, technological, scientific and cultural cooperation. The Indian Trade Commission was opened in 1943 in Buenos Aires, which was converted in 1949, into one of the first Indian embassies in South America. An Argentinian Consulate was established in the 1920s in Calcutta and was transferred to Delhi as an Embassy in 1950. In recent times, bilateral ties have been characterised by multiple high-level political visits and signing of agreements and treaties.
At the international level, both countries have supported each other on multiple multilateral issues and endorsed candidatures to the UN and other international bodies. Importantly, India has always supported Argentina over the sovereignty issue of the Malvinas Islands. The following table provides a glimpse of the commercial relations, vis-à-vis bilateral trade, between both countries.
Indian exports to Argentina was valued at approximately $700 million in 2017-18. Exports mainly consisted of ceramic, vehicles and auto parts, machinery, lubricants, sound/image devices, organic chemicals and garments. India imported petroleum, ferroalloys, leather, soybean oil, sunflower oil and wool from Argentina, valued cumulatively at $2.2. billion.
Ahead of Argentinian President Mauricio Macri’s visit to India in February 2019, along with a high-level ministerial and business delegation, India is keen to expand trade relations by seeking market access for textiles, apparel, home furnishing products and folding bicycles to triple exports to the country, with additional shipments valued at $1.5 billion. India is also interested in the promotion of ethnic products like Khadi and Alphonso mangoes.
Bicycle components and sophisticated high-end bicycles alone offer a potentially $1 billion worth export opportunity for India. Another $300-350 million can come from the textiles and apparel industry. The exporters of handicrafts, office stationery and home furnishing products are already pushing for the removal of non-tariff barriers (custom clearances etc.) to help boost current exports from $10 million to $100 million. Indian exporters are also demanding a 25% reduction in the import duty on sports equipment.
“Our trade deficit with Argentina is because of import of agricultural products. We can export low value-added products and construction material like PVC pipes and roof tiles. Our ceramic exports were doing well there but Argentina has applied anti-dumping duty on Indian ceramic and vitrified tiles,” said Mohit Singla, chairman of the Trade Promotion Council of India, an organisation under the Department of Commerce.
While the Argentinian President’s visit will be a celebration of 70 years of bilateral relationship, it will also present an opportunity to deepen and expand cooperation across multiple sectors – renewable energy, nuclear energy, space and agriculture, aviation, mining (lithium, gold and copper), pharmaceuticals and automobiles. Technology will be a crucial component, especially in the form of radar, nuclear and defence components.
Several agreements are expected to be signed to facilitate partnerships, especially in two areas of critical importance to both countries i.e. food and energy security. Under food security, opportunities for exploring technological cooperation in the agricultural sector will be explored. Argentina has developed cutting-edge technologies that can help India improve its agricultural productivity and reduce losses in post-harvest farm produce. Importantly, Argentina is seeking to diversify its trade basket as almost 90% of Argentinian exports to India currently consists of only soybean oil. Discussions are ongoing between both countries across various projects. Argentina has introduced new products like apples and pears in India.
Both countries are in talks to develop shale gas. Currently, the government players hold exclusive rights over the exploitation of unconventional resources. In 2014, ONGC Videsh Ltd. signed an MoU with a major Argentinian oil producing company i.e. YPF S.A. Both companies are exploring avenues of collaboration in the upstream sector in India, Argentina and other countries.
Argentina is a member of the International Solar Alliance, which is an initiative by PM Modi to foster South-South cooperation. Thus, solar energy has emerged as a new area of focus between both countries. Rooftop solar plants, electric cars etc. require batteries and most advanced storage systems are lithium-ion based. In this context, mining of lithium becomes crucial for energy security.
India imports almost 100% of these batteries and the Argentinian government has allowed FDI in the mining sector. A consortium of three PSU companies (National Aluminum Company-NALCO, Hindustan Copper-HCL and Mineral Exploration Corp Ltd.-MECL), named Khanji Bidesh India Ltd. will visit Argentina to explore lithium mining opportunities. This consortium has been formed by the Indian government to identify, explore, acquire, develop and process strategic minerals outside India.
A bilateral agreement for Peaceful Uses of Nuclear Energy had been inked in 2009 and implementation will take place soon. Under this, Argentina has offered to establish small nuclear plants in India to increase the share of nuclear power in the country’s energy mix. Technical, scientific and commercial collaborations will take place. Both countries are keen to leverage their nuclear expertise for mutual benefit. Currently, a radioisotope production plant is being built at the Bhabha Atomic Centre in Mumbai, using low enrichment uranium (LEU), through a process developed by the National Atomic Energy Commission (CNEA) of Argentina.
Thus, there is massive scope for cooperation between Argentina and India that could result in mutual economic, technological and development benefits.
India Outbound
January 30, 2019
source https://indiaoutbound.org/india-and-argentina-bilateral-relations/
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