There is a version of the India–Latin America story that sounds like momentum. Bilateral trade rose to $39.21 billion in FY 2024-25, up from $35.73 billion the year before. Active FTA negotiations are underway with both Peru and Chile, with the 9th round of India-Peru talks completed in Lima in November 2025 and the 3rd round of CEPA negotiations with Chile wrapped up in Santiago the same month. India's KABIL has signed agreements in Argentina to explore lithium. The Union Budget 2026-27 has taken note of Latin America's role as a supplier of critical minerals. A $100 billion trade target — once aspirational — now looks achievable within the decade.

And yet the relationship, viewed from New Delhi's strategic perspective, remains structurally thin. India's engagement with Latin America is still primarily reactive — trade happens because Latin American commodities meet Indian industrial needs, and Indian pharmaceuticals and automobiles find a willing market. What is largely absent is the architecture of a strategic relationship: an institutionalised dialogue framework, a coherent investment thesis, a political-level champion, or a clear narrative of what India and Latin America want to build together.

The Trade Structure and Its Limits

The composition of India–Latin America trade tells most of the story. Latin American economies supply ores, minerals, metals, energy inputs, and agricultural commodities. India exports engineering goods, pharmaceuticals, chemicals, automobiles, and textiles. This complementarity is real, and it explains why trade has grown without requiring deliberate policy effort to sustain it. It also explains why the relationship has not deepened beyond its commodity-industrial base.

India's trade deficit with the region — imports of $24.04 billion against exports of $15.17 billion in FY 2024-25 — is predominantly driven by resource imports. Crude oil from Brazil, Mexico, and Venezuela; copper and lithium precursors from Chile and Argentina; edible oils and pulses from Argentina and Brazil. These imports serve India's energy and food security interests and will continue to grow as India's industrial economy expands. But a relationship built primarily on resource extraction on one side and manufactured exports on the other is a supplier relationship, not a partnership.

The contrast with China's Latin America engagement is instructive. Chinese FDI in the region stands at approximately $159 billion; Indian FDI is estimated at $12–16 billion. China has built ports, railways, and data infrastructure across the continent, creating the physical integration that locks supply chains together over decades. India has signed MoUs. The gap is not merely financial — it is strategic depth.

Where the Opportunities Actually Are

Three sectors deserve more deliberate Indian attention than they are currently receiving.

Critical minerals are the most obvious. The Lithium Triangle — Chile, Argentina, and Bolivia — holds over 75% of global lithium reserves, essential for India's electric vehicle and energy storage ambitions. India's first overseas lithium exploration project, through KABIL in Argentina's Catamarca province, is a genuine step forward. But one agreement in one country is not a critical minerals strategy. India needs a portfolio approach across the triangle, with binding offtake agreements and equity stakes rather than exploration MoUs that may not mature into supply.

Pharma and healthcare are underexploited. Indian pharmaceutical exports to Latin America, while growing, remain a fraction of what the market can absorb. The region's 660 million people face the same affordability challenges that India's generic manufacturers exist to solve. Countries like Brazil, Mexico, Colombia, and Argentina have sophisticated healthcare systems willing to engage with alternative suppliers — particularly as dependence on American and European pharmaceutical supply chains has become a political liability since 2020. An India-LAC pharma partnership, with regulatory harmonisation and potentially joint manufacturing, is a natural fit that has not been seriously pursued.

Digital and fintech infrastructure is the most forward-looking opportunity. India's UPI-led financial inclusion story has attracted genuine interest across Latin America, where large informal economies and underbanked populations face identical structural problems. The conversation about exporting India's DPI model — which India is already having within BRICS — should extend bilaterally across the region. Brazil's Pix, its real-time payments system, offers a natural interoperability partnership. Peru and Colombia have expressed interest in India's Aadhaar-equivalent digital ID architecture.

The FTA Question

India's FTA negotiations with Chile and Peru are serious and substantive. A CEPA with Chile — covering trade in goods and services, investment, rules of origin, intellectual property, and critical minerals — would be the most comprehensive Indian trade agreement with a Latin American country. If concluded, it would set a template for expansion across the region.

The challenge is pace. India's FTA negotiations are notoriously deliberate — the UAE CEPA took months rather than years because there was political will at the highest level on both sides. The India-Chile CEPA has been under negotiation through multiple rounds without a timeline for conclusion. In a region where China is already deeply embedded and American trade attention is being pulled by domestic priorities, speed matters. An FTA that arrives in 2029 serves India less well than one signed in 2027.

A broader India-Mercosur comprehensive agreement — expanding on the Preferential Trade Agreement signed in 2004 — would be transformative. Mercosur economies, led by Brazil and Argentina, represent the largest market concentration in Latin America. India's total trade with Mercosur countries in 2023 exceeded $50 billion. A genuine free trade agreement would institutionalise and expand that relationship in ways that bilateral PTAs cannot.

The Political Deficit

The most significant gap in India's Latin America engagement is political attention. India's leadership has not undertaken a sustained diplomatic push in the region since the early years of the Modi government. Latin American heads of government visit New Delhi with some regularity; reciprocal Indian engagement at the Prime Ministerial level is rare. This matters because trade and investment relationships of real depth are built on political trust — and political trust is built through visible, sustained, high-level engagement.

India's MEA has a Latin America and Caribbean division. It does not have a Latin America strategy in the sense that it has a Southeast Asia strategy or an Africa strategy, with named priority relationships, specific institutional mechanisms, and identifiable political owners. The Focus LAC programme, launched in 1997, gave India its first structured engagement with the region. Nearly three decades later, it has not been substantially updated.

The $100 billion target is achievable. Whether India reaches it through strategic intent or simply through the momentum of complementary economies trading together will determine what kind of relationship it has with Latin America at the end of this decade — a deep partnership or a large but shallow supply chain.

The Hind covers policy, power, and strategic affairs from India's perspective.