Costa Rica is working to strengthen trade and investment flow with India, and has identified several potential sectors like pharmaceutical products, biotechnology, nanotechnology, software development, research related to science, engineering, automobile manufacturing, BPO and telecommunications.

Talking to FE, Juan Fernando Cordero, ambassador of Costa Rica to India said: ?Costa Rica recognises India as a very important country, therefore the first Costa Rican embassy was established in Delhi in 2010 with the objectives of increasing bilateral trade, attracting investment and tourism, and identifying areas of common interest across the fields of education, science and technology, culture and sustainable development.?

The opening of the embassy was announced in December 2009 by Costa Rican President Oscar Arias as part of the Central American country?s expansion of ties with Asia.

However, trade with India remains surprisingly small. In 2010, India imported only $22.1 million in Costa Rican goods, mainly timber, seeds and palm oil. In return, Costa Rica imported $107.4 million in Indian motorbikes, medicines, gasoline and textiles.

?We can can supply India with high-quality agricultural goods such as coffee and industrial goods such as sweeteners. At the same time, both economies can work hand in hand to participate in global value chains,? said the Costa Rican ambassador.

Costa Rica?s foreign trade policy is focused on strengthening trade and investment relations with diverse partners, including some in Asia. ?With the purpose of promoting favourable conditions for greater investment between the two countries, the ministry of foreign trade of Costa Rica proposed a bilateral investment treaty (BIT) to the Indian finance ministry in September 2011,? said Cordero. ?We are hoping that the draft is finalised before minister of foreign trade Anabel Gonz?lez, accompanied by a large business delegation, visits India in March 2012. This legal framework, which is expected to be inked in her presence, will stimulate capital flows, the establishment of new enterprises that will contribute to diversify the supply of goods and services, technology transfer and global value chains,? the envoy said.

?The BIT includes provisions on investment promotion and protection, national treatment, most favoured nation treatment, expropriation and compensation, repatriation of investment and returns, subrogation, settlement of disputes and entry and sojourn of personnel. At the moment both ministries are coordinating to start the negotiation process,? he added.

In the past 10 years, investment from India to Costa Rica has been very low, with the highest amount registered in 2007 less than $500,000. However, the country is currently working on the negotiation of a BIT with India to promote and protect foreign direct investment between the two.

A comparison of figures from 2010 with 2009 shows a decline in exports that’s reflected in the dip in oil seed and oleaginous fruits, ferrous waste and scrap, and computer parts sent to India. Among exports to India in 2010, computer parts were valued at $53.9 million and tropical woods at $20.4 million. The rise in purchases from India comes from the increase in imports of vehicles, flat-rolled products of iron/non-alloy steel, exercise books, herbicides and fungicides. Among the imports in 2010, medicaments were worth $5.5 and herbicides about $2.9 million.

Bilateral trade has grown significantly between 2001-2010. In 2000, bilateral trade totaled $6.4 million while in 2010 this amount reached $128.1 million. The growth spurt between 2006 and 2007 was very significant, reaching $114.1 million from $67.6 million. In 2008, a drop in bilateral trade of $12.5 million was registered while in 2009 there was a significant recovery, mainly due to rising exports. In 2010 too, trade increased ? though it was less than in 2009 (20% in 2009 versus 7% in 2010) ? on the back of rising imports that went from $29.1 million to $ 107.6 million.