Trade between Argentina and India broke records for the fifth year in a row
Trade between Argentina and India broke records for the fifth year in a row
India has consolidated its position as Argentina’s fifth largest trading partner. It is also the main export destination for Santa Fe province and the Soy Complex. The key role of vegetable oils.
The relationship between Argentina and India has grown progressively and today is enormous, encompassing cooperation in political, economic, cultural, scientific and technological aspects. Since 2019, relations between the two countries have been upgraded to the level of Strategic Partnership.
In 2022, India stood out as the fifth destination for Argentine exports, accounting for 5.2% of the national export basket. At the same time, it was the seventh origin of imports to our country, accounting for 2.3% of total imports. Last year was the fifth consecutive year in which bilateral trade records were broken. Argentina also has the second largest trade surplus with India, after the one our country has with Chile. Last year alone, the surplus was close to US$ 2.7 billion, accumulating more than US$ 14.4 billion in trade surplus in the last decade.
Agro-industry is a formidable protagonist of the Argentine-India trade relationship. More than 85% of Argentina’s exports to India consist of vegetable oils, the bulk of which originate in the processing industries of the Upriver, in Greater Rosario. The Asian giant is the destination of around 60% of Argentine exports of soybean oil and 23% of sunflower oil. India is also the main trading partner of the Soy Complex and the province of Santa Fe.
This is particularly important as Argentina is the world’s largest exporter of soybean oil and the third largest exporter of sunflower oil. India is a strategic global market for vegetable oils. While it is relatively self-sufficient for its domestic consumption of rapeseed, it is dependent on imports for soybean, sunflower and palm oils. One out of every 5 tonnes of palm oil and sunflower oil globally is destined for India. Moreover, almost 1 out of every 3 tonnes of soybean oil traded globally has India as its buyer. The destination of these oils is mainly human consumption. Due to its heavy dependence on imports, and in search of domestic self-sufficiency, in April 2023, India returned to imposing tariffs on soybean oil and sunflower oil, from zero to a rate of 5.5%, although in September 2021 the effective tax on soybean oil imports had reached almost 25%.
In recent years, India has also done business with Argentina for soybean and sunflower pellets and meal worth around US$ 70 million a year. It should be noted that last year mining trade with India amounted to about US$ 448 million, a trade that unfortunately cannot be broken down by product due to INDEC’s statistical secrecy provisions. On the other hand, Argentina imports agricultural machinery, chemical industry and fuels from India, among other products.
India’s potential as a market is enormous. This Asian giant is an emerging power and the world’s third largest economy. In recent decades it has enjoyed a growth rate that has far outpaced the economic expansion of the United States, the European Union and Latin America. It is also worth highlighting the potential of this Asian giant in its population. India is home to 28% of the world’s young people. More than half of the population is under 25 years of age, and more than 65% is under 35 years of age.
The acceleration of the growth of its economy, with the consequent improvement in the population’s consumption levels, is expected to diametrically improve the levels of international demand. India is an excellent opportunity to continue expanding the external market for Argentine agro-industrial goods.
Source: https://bcr.com.ar/
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