India’s trade with Central America, which has a combined population of approximately 52 million people, stood at USD 1.75 billion in 2022-23 (April-February) as per the latest data from India’s Ministry of Commerce. Within Central America, India’s largest trade partner is Panama, with a trade of $573 million.
“Panama is actively positioning itself as a hub for business and as an entry point to Central America and Latin America,” Hari Seshasayee, Asia-Latin America Expert at UNDP and advisor to the foreign ministry of Panama, tells Financial Express Online.
According to him, “Panama’s geostrategic position is apparent in two activities that will take place during the visit of India’s External Affairs Minister Dr S Jaishankar: Panama will host the Latin America-India Forum, organized jointly by the Government of Panama, CAF Development Bank of Latin America and CII, and Panama also serves as the host and meeting point for the India-SICA Ministerial meeting.”
India will use the SICA platform whose stated objective is to extend economic relations beyond the US European nations to Asia in various sectors including information Technology, Health, medicines, people to people connect as well as defence and security solutions. Financial Express Online has reported that following the Indian-SICA Foreign Ministers meeting back in 2008 India had announced an enhanced Line of Credit and had also agreed to meet energy and food security with SICA member countries.
India has offered assistance and cooperation in traditional sectors of trade, tourism, SMEs, disaster management, tourism and renewable energy.
Dr Jaishankar in Panama
For the first time, external affairs minister Dr S Jaishankar is visiting Central American nation Panama from April 24-25 following an invitation extended by his counterpart Janaina Tewaney Mencomo. Besides holding meetings with his counterpart and other ministers of the Panamanian government, Jaishankar will also call on the President of the Republic, Laurentino Cortizo Cohen.
The five pillars of Central American Integration
Democratic Security and Strengthening of regional institutions; Climate Change; Social Integration; Economic Integration; and Comprehensive Risk Management.
Seven nations Costa Rica, Belize, Panama, El Salvador, Honduras, Guatemala, and Nicaragua together form the SICA or the Sistema de la Integración Centroamericana or the Central American Integration System. Though these countries are smaller geographically as compared to the Latin American countries, they are however strategically important and have rich-biodiversity of fruits. Taking advantage of their small size, they have joined hands by combining their electricity grids which provide cheap, stable and reliable electricity to all the countries. They have also learnt that the power of collective bargaining will be beneficial which is why SICA has become significant for the region for those who are interested in doing trade with them.
India-SICA Meeting
With the purpose of deepening dialogue and cooperation, the Ministers of Foreign Affairs or their representatives of the Member States of the Central American Integration System (SICA), and Dr S Jaishankar will meet with the purpose of deepening dialogue and cooperation.
Earlier this month on April 3, SICA-India Business Forum, was attended by the industry body CII and the SICA General Secretariat.
Though Belize is holding the Pro Tempore Presidency of SICA, Panama, as the political hub of the region is the host of the meeting of the Mechanism for Political Dialogue and Cooperation between India and the Countries of the Central American Integration System (SICA) on Tuesday (April 25, 2023).
India is a priority partner in the cooperation agenda promoted by the Panamanian government, through the Foreign Ministry, and is seeking the transfer of knowledge through collaboration agreements between both countries.
Latin-America Business Forum
Senior executives and representatives of big companies from India, private sector leaders from Panama and Latin American Region are expected to be present at the Latin-America Business Forum. Present will be UPL Limited, the largest agrochemical company in India and one of the largest in the world with revenues of USD 6 billion dollars; Praj Industries, largest biofuel and Ethanol Company of India; Dr. Reddy’s Laboratories, considered to be one of the largest pharmaceutical companies in the world, with revenues of $2 billion. Also present will be Kalpataru Power Transmission, engineering company that holds contracts for around $700 million dollars in Latin America; TVS Engine; Hetero Labs, supplier of one third of all HIV/AIDS drugs worldwide; Aurobindo Pharma, with revenues of $3 billion; MSN Labs Private Limited, providers of oncology, cardiology and diabetes medicines; and most importantly EXIM Bank of India, responsible for granting credit lines at the country level.
India & Panama
Dr Jaishankar and his counterpart Minister Tewaney will meet for the second time this year. During her visit to India earlier this year, the two countries had signed a MoU between Diplomatic Academies and also shared priority issues such as the progress and efforts made in fiscal and banking transparency, and also her country’s interest to become a pharmaceutical and bio-scientific hub for the benefit of the region.