Other BriefingsIndia-Argentina Bilateral Trade and Investment
India and Argentina share a long-standing diplomatic relationship, which reached a new level with their elevation to a Strategic Partnership in 2019. In February 2024, the two countries celebrated the 75th anniversary of diplomatic ties, and emphasized their commitment to deeper collaboration in political, economic, defense, mining, cultural, and scientific and technological domains.
The Argentine Consulate, initially established in India in the 1920s, was later upgraded to an embassy, while India opened a trade commission in Argentina in 1943, which transitioned to an embassy in 1949.
Bilateral exchanges have intensified in recent years, particularly during India’s G20 Presidency in 2023, as both nations sought to expand their influence on global platforms.
Key high-level visits between Indian Prime Minister Narendra Modi and Argentine presidents, Alberto Fernández and Javier Milei, have aimed at strengthening cooperation in priority sectors like defense, agriculture, mining, science, technology, and innovation. These exchanges serve as a foundation for both countries to establish new agreements and expand into high-growth areas that benefit their respective development goals.
India-Argentina bilateral trade
In 2023, India’s exports to Argentina amounted to approximately US$996.31 million, as reported by the United Nations COMTRADE database on international trade. Conversely, India’s imports from Argentina reached US$2.95 billion during the same year, according to the same COMTRADE database. (This information, including historical data and statistics, was also last updated in November 2024.)
India-Argentina bilateral trade more than doubled over three years, rising from 2019 to reach a peak of US$6.4 billion in 2022. During 2021 and 2022, India became Argentina’s 4th largest trading partner, with Argentina serving as a key supplier of edible oils, particularly soybean oil, to India. However, severe drought conditions in Argentina, coupled with a forex shortage, created significant obstacles for bilateral trade in 2023, causing it to decline by 39 percent to US$3.9 billion.
With improved economic and weather conditions on the horizon, trade is anticipated to rebound.
|
India’s Exports to Argentina |
Value (US$ million) |
|
Mineral fuels, oils, distillation products |
167.76 |
|
Machinery, nuclear reactors, boilers |
156.35 |
|
Vehicles other than railways, tramways |
126.92 |
|
Miscellaneous chemical products |
125.88 |
|
Organic chemicals |
103.92 |
Source: Trading Economics
|
India’s Imports from Argentina in 2023 |
Value (US$) |
|
Animal and vegetable fats and oils |
2.38 billion |
|
Pearls, precious stones, metals, coins |
304.68 million |
|
Wood and articles of wood, wood charcoal |
82.72 million |
|
Raw hides and skins, leather |
35.88 million |
|
Mineral fuels, oils, distillation products |
30.28 million |
Source: Trading Economics
The trade balance favors Argentina due to its exports of high-value agricultural products, particularly oils, fats, and other raw materials. On the other hand, India’s exports to Argentina are diverse, ranging from refined mineral fuels and machinery to chemicals and automobiles, showcasing India’s industrial capabilities.
Both nations see opportunities to further diversify their trade portfolio, particularly in sectors like pharmaceuticals, information technology, and high-tech engineering products. This strengthens the case for continued trade expansion through preferential trade agreements.
In July 2024, India’s exports to Argentina totaled US$59.2 million, while imports reached US$418 million, resulting in a trade deficit of US$359 million. This marked a decline in exports of US$18.8 million (24.1%) compared to July 2023, when exports were US$78.1 million. In contrast, imports increased by US$47.5 million (12.8%) from US$371 million in the previous year.
The primary exports from India to Argentina in July 2024 included Agro Chemicals (US$20.3 million), Plastic Raw Materials (US$6.85 million), Organic Chemicals (US$4.05 million), Residual Chemicals and Allied Products (US$3.51 million), and Two and Three Wheelers (US$2.38 million). On the import side, the leading products sourced from Argentina were Vegetable Oils (US$260 million), Other Cereals (US$29.5 million), Petroleum Products (US$19.2 million), Residual Chemicals and Allied Products (US$2.9 million), and Finished Leather (US$2.03 million).
The year-on-year decrease in India’s exports to Argentina can be largely attributed to significant reductions in shipments of Manmade Yarn, Fabrics, and Made-ups (down US$7.86 million or 83.3%), Two and Three Wheelers (down US$6.59 million or 73.5%), and Cotton Yarn (down US$2.48 million or 97%). Conversely, the increase in imports from Argentina was mainly driven by higher imports of Petroleum Products (US$19.2 million or 4.04%), Bulk Drugs and Drug Intermediates (US$455,000 or 418%), and Residual Chemicals and Allied Products (US$379,000 or 15%).
Source: OEC
Investment
India and Argentina have developed a robust investment relationship over the years, characterized by strategic partnerships and sectoral collaboration. India has made significant investments in Argentina’s mining sector, particularly in lithium exploration. In January 2024, Khanij Bidesh India Ltd (KABIL), a state-owned enterprise, signed a US$24 million agreement with the Argentine government to explore and develop five lithium brine blocks in Argentina’s Catamarca province. This investment is critical to India’s clean energy goals, as lithium is essential for the production of electric vehicle batteries and other renewable energy storage technologies.
Renewable energy cooperation has become another promising area for investment. Both countries are exploring joint ventures in wind and solar power to support sustainable energy objectives, contributing to Argentina’s RenovAR renewable energy program and aligning with India’s ambitious renewable energy targets.
In September 2024, Coal India, a state-owned coal mining company, announced its interest in exploring critical minerals in Argentina, as well as potential lithium procurement from Chile. This aligns with India’s broader strategy to secure essential minerals for its clean energy transition, reflecting a coordinated approach to achieving energy security and diversifying its energy sources.
Investment facilitation
To create a secure environment for investors, India and Argentina are negotiating a Bilateral Investment Treaty (BIT) and a Double Taxation Avoidance Agreement (DTAA). The BIT would establish a framework to protect investments from both countries, offering legal recourse in case of disputes and reinforcing mutual confidence in the stability of their economic ties. The DTAA aims to prevent the double taxation of income earned by businesses and individuals, a step that would encourage more companies to operate across borders by reducing their tax burden.
The India-Argentina Business Council (IABC), launched on October 14, 2020, by the Embassy of India in Argentina, plays a key role in strengthening economic and commercial ties. The IABC includes major Indian companies with a presence in Argentina, such as Tata Consultancy Services, Infosys, Bajaj Motorcycles, and Glenmark Pharma, as well as Argentine companies trading with India. The Council works to facilitate trade, address business challenges, and foster growth by providing a platform for dialogue and engagement between stakeholders from both nations.
India-Argentina Tax Information Exchange Agreement
The India-Argentina Tax Information Exchange Agreement (TIEA), effective since January 2013, facilitates the exchange of tax-related information between the two countries to aid in tax collection. It covers various tax categories in both countries and provides a mechanism for mutual assistance in tax matters.
Key features:
- Information exchange upon request by competent authorities.
- Mutual visits for interviews and record examinations with prior consent.
- Ordinary costs of assistance borne by the requested party.
- Support for tax claim collections.
- Dispute resolution through mutual agreement procedures.
The TIEA aims to promote international tax cooperation, distinct from a DTAA, which specifically addresses income earned by residents of both countries.
Outlook and sectoral expansion
India and Argentina have agreed to expedite the signing of a BIT and a DTAA to enhance economic ties. Acknowledging the increase in two-way investments, both countries are exploring further collaboration in sectors such as tourism, healthcare, film, and information technology. Additionally, both sides support partnerships in infrastructure through public-private partnerships (PPP) and are working on agreements in the pharmaceutical sector for regulatory information exchange.
India’s focus on lithium exploration aligns with Argentina’s invitation for Indian participation in its RenovAR renewable energy program, underscoring both countries’ commitment to advancing renewable energy goals. They are also exploring ways to expand the India-MERCOSUR preferential trade agreement by including more products, reflecting a shared interest in strengthening trade and investment ties.
The Southern Common Market, commonly referred to by its Spanish abbreviation Mercosur and Portuguese abbreviation Mercosul, is a South American trade bloc established by the Treaty of Asunción in 1991 and the Protocol of Ouro Preto in 1994. The full member countries include Argentina, Bolivia, Brazil, Paraguay, and Uruguay. Venezuela is also a full member; however, it has been suspended since December 1, 2016. The associate member countries are Chile, Colombia, Ecuador, Guyana, Peru, and Suriname. Notably, Bolivia officially became a full member on July 8, 2024.
Conclusion
The India-Argentina bilateral relationship has been on an upward trajectory, driven by their shared strategic interests and enhanced by the elevation of their partnership in 2019. With a foundation of 75 years of diplomatic relations, the two countries have developed a dynamic economic and trade framework that supports ongoing growth and investment.
As they continue to collaborate in critical sectors such as lithium mining, renewable energy, infrastructure, pharmaceuticals, and information technology, India and Argentina are poised to deepen their economic engagement. Their mutual focus on sustainable development, energy security, and technological advancement serves as a testament to the strength and potential of their partnership, positioning them well to address global challenges and drive inclusive growth for years to come.
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