Exploring New Horizons: Latin America’s Strategic Shift Towards India’s Growing Trade Opportunities – DW – 02/26/2025

This month, Brazil’s state oil company, Petrobras, made headlines during the Brazil Energy Forum in Rio de Janeiro. They announced a significant new partnership with Bharat Petroleum Corporation from India. The deal is set to deliver 6 million barrels of oil annually from 2025 to 2026.

Claudio Romeo Schlosser, Petrobras’ logistics and sales director, highlighted this agreement as a step to broaden their international customer base, which has primarily focused on China until now. Just ten days later, the deal was finalized in India on February 12.

Bharat Petroleum is a major player in the oil market, being India’s third-largest oil importer. Last year, it imported about 85% of the oil it used. This new agreement could significantly increase Petrobras’ exports to India, which currently account for only 4% of its total exports.

Looking ahead, Petrobras aims to boost its shipments to India to 24 million barrels per year, according to Schlosser.

This agreement comes as both Brazil and India work to strengthen their economic ties within the BRICS group, which also includes Russia, China, and South Africa.

Under President Luiz Inácio Lula da Silva, Brazil is emphasizing the need to diversify its trading partners, especially following its decision to not join China’s Belt and Road Initiative. Rising global tensions have made India an appealing partner as it maintains a neutral stance amidst competition between larger powers like the U.S. and China.

India is also looking to expand its relationships, particularly in Latin America. This is highlighted by Argentina’s recent agreement with three Indian firms, allowing the export of up to ten million tons of liquefied natural gas annually. The deal also covers cooperation in lithium and hydrocarbon exploration.

YPF’s CEO, Horacio Marin, believes that tapping into the Asian market is vital for Argentina’s energy growth, aiming for $30 billion in revenues over the next decade.

According to Sabrina Olivera from the Argentine Council for International Relations, India’s approach has shifted from non-alignment to what she calls “strategic autonomy.” This allows India to engage globally without binding military commitments, presenting itself as a versatile partner in negotiations.

Latin America holds significant potential for India, which is still less established than other powers like the U.S. and China in the region. Olivera noted India’s recent humanitarian aid to Cuba following a hurricane as an example of strengthening ties across the Caribbean. In Chile, the Indian Ambassador sees the country as a gateway to greater access in Latin America.

India’s engagement in the region has been marked by high-level visits, including Indian Foreign Minister Subrahmanyam Jaishankar’s visit to Panama, which was the first in sixty years. He noted this shift towards deeper connections with Latin America, highlighting that trade between India and the region hit $40 billion in 2023, mainly with Brazil, Mexico, Argentina, Colombia, and Peru.

India mainly imports raw materials and exports goods like automobiles and pharmaceuticals. In the past decade, trade has surged by 145%, but it still pales in comparison to China’s $480 billion trade with the region.

Olivera emphasizes that while India might not match China’s resources, its status as the largest democracy in Asia gives it a unique advantage in building trust with Latin American nations, many of which share similar democratic values.

Source link