India’s engagement with Latin America has traditionally been limited when compared with its relations with Asia, Europe, or North America, yet recent developments signal a shift toward deeper economic interaction. Geopolitical shifts of course are driving some changes. Bilateral trade has expanded steadily, reaching approximately USD 39 billion in fiscal year 2024–2025, reflecting growing interdependence between the two regions. This expansion is underpinned by structural complementarities: Latin America’s resource-intensive economies align closely with India’s demand for energy, minerals, and agricultural inputs, while India’s manufacturing and services sectors respond to Latin America’s consumption and industrialization needs.
Unlike India’s engagement with other regions, cooperation with Latin America has yet to develop into a comprehensive strategic framework, leaving considerable potential untapped.
The India–Latin America trade relationship is characterized by a high degree of complementarity rather than competition. Latin American exports to India are dominated by primary commodities such as crude oil, copper, lithium, and agricultural products, which are essential for India’s industrial and energy security. In contrast, India’s exports to the region consist primarily of manufactured goods, including pharmaceuticals, automobiles, engineering products, and chemicals.
Mercosur
India currently maintains preferential agreements with MERCOSUR and Chile, which provide partial tariff reductions but do not extend to comprehensive coverage of goods, services, or investment flows. These arrangements lack the depth of modern free trade agreements, which typically include provisions for regulatory harmonization, dispute resolution, and market access across sectors.
Efforts to address this gap are underway. Negotiations for a Comprehensive Economic Partnership Agreement with Chile and a free trade agreement with Peru have progressed in recent years, reflecting a growing recognition of the region’s strategic importance.
Corporate engagement and transnational business networks
Notwithstanding the absence of strong free trade agreements, Indian multinational corporations, particularly in the information technology sector, have established a significant presence across the region. Companies such as Tata Consultancy Services, Infosys, Wipro, and HCLTech have developed extensive operational networks, employing tens of thousands of professionals and serving global clients from Latin American delivery centres.
These firms leverage Latin America’s strategic advantages, including its proximity to North American markets and a growing pool of skilled, multilingual talent. Mexico, in particular, has emerged as a key hub for nearshoring operations, enabling Indian companies to bridge geographic and market gaps while enhancing service delivery capabilities.
The presence of over 200 Indian companies in Mexico alone, in accordance with the Mexican Indian Chamber of Commerce and with investments exceeding USD 4 billion, underscores the scale of this engagement.
Opportunities for deepening India–Latin America economic cooperation are concentrated in several key sectors that reflect the complementary strengths of the two regions. The energy and mining sectors are of particular importance, given Latin America’s abundance of critical minerals such as lithium and copper, which are vital for emerging technologies and renewable energy systems. As India seeks to secure supply chains for its energy transition, partnerships in these areas are expected to intensify.
The pharmaceutical industry represents another area of synergy, as India’s competitive advantage in generic drug manufacturing aligns with Latin America’s demand for affordable healthcare solutions. Similarly, the automotive sector has demonstrated significant growth, driven by demand for cost-effective vehicles and two-wheelers, which Indian manufacturers are well positioned to supply.
In addition, the information technology and digital services sector offer substantial potential. Latin America’s ongoing digital transformation, combined with the expertise of Indian IT firms, creates opportunities for collaboration in areas such as cloud computing, artificial intelligence, and business process outsourcing. Agriculture and food processing also present avenues for cooperation, particularly in the context of food security and value-chain development.
Cultural affinities and soft power
Despite geographical distance, India and Latin America share several socio-cultural similarities that facilitate business interactions. Both regions are characterized by strong family-oriented social structures, entrepreneurial cultures, and histories shaped by colonial experiences and economic development challenges. These similarities contribute to a degree of mutual understanding that can support commercial partnerships. Several Indian Chambers of Commerce have been open operations in main Latin American countries as a testament of growing synergies.
At the same time, cultural differences, particularly in language and communication styles, present challenges that must be managed carefully. Spanish and Portuguese dominate in Latin America, whereas Hindi, English and regional languages prevail in India, necessitating investment in linguistic and cultural competencies.
The success of Indian firms in the region demonstrates that cultural barriers can be mitigated through localized hiring and management practices. Efforts like the DWF India Practice and DWF Latin America Practice both led by regional lawyers on each side combines both an in-depth understanding and mitigation of such differences.
Legal systems and the business environment
With two different legal systems (common law vs. civil law), a critical determinant of success in Latin America and India is the ability to navigate complex and heterogeneous legal and regulatory environments. Each country in the region operates under distinct legal frameworks, encompassing differences in taxation, labour laws, and regulatory compliance requirements. This diversity necessitates a high degree of adaptability and local expertise on the part of foreign investors.
Political and economic volatility in certain markets further complicate the business environment, increasing the importance of risk management and legal due diligence. Companies that invest in developing a deep understanding of local legal systems and establish strong partnerships with local stakeholders are better positioned to mitigate these risks and capitalize on market opportunities.
DWF as a meeting point
With DWF India Group, DWF Latin American Group, DWF Legal Operations, LATAM Investment Matrix and Horizon Scanning, DWF is perfectly positioned to help as a so needed bridge between India and Latin America investments and business opportunities among those regions.
