For the first time ever, India-Mexico bilateral trade has crossed $10 billion in 2018 making Mexico the most important trading partner of India in Latin American region surpassing Brazil. In the last one decade, the total trade has increased 240% out of which 58% came in the last two years since 2016.
There has been an upward swing in the relations between the two countries after Prime Minister Narendra Modi’s visit to Mexico in June 2016, when both countries decided to upgrade the bilateral relations to the level of “Strategic Partnership”. In 2008, the total trade amounted to $2.98 billion.
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India’s ambassador to Mexico Muktesh Pardeshi, says that Indian companies prefer Mexico as a major investment destination with access to NAFTA and Latin America. These companies prefer to invest in three strong sectors in Mexico including information technology, pharmaceuticals and automotive sectors. Overall, India has a total investment of more than $3 billion in various sectors.
The trade has increased from $6.4 billion in 2016 to $10.16 billion in 2018, when a decade ago India was not even amongst the top 20 trading partners of Mexico but in 2018, India figures as 9th most important global trading partner. India entered the league of top 10 trading partners of Mexico in 2017.
The major item of export from India has been vehicles and auto-parts since 2012, in 2018, India sold only $1.7 billion worth of commodity.
India is the second biggest supplier of motorcars and other transport vehicles for Mexico after the US. However, according to Pardeshi, in 2018, the market indicated shrinkage of 19% resulting in a total export of $1.2 billion.
Volkswagen India exports “Vento” model. General Motor’s Beat is sold as Spark in the Mexican market. Hyundai’s i10 Grand and Xcent, Ford’s Figo and Figo Aspire, and Maruti Suzuki’s Ciaz are also being exported to Mexico from their India based operations.
Pharmaceutical is one sector where Indian companies are facing tough competition from the European companies. Exports in pharmaceutical products, which suffered shrinkage of market in 2017 compared in 2016 showed recovery in 2018. From $ 77 million in 2017, it shot up to $120 million in 2018 showing 56% increase compared to the previous year.
For 2018, the trade balance was $308 million in India’s favour and Indian exports registered a 4.2% growth from $ 5.02 billion to $ 5.231 billion in 2018.
India’s total imports registered 47% growth while only the non-oil imports registered 65% growth from Mexico, and growth in exports suffered primarily because of the suspension on dry chilies import by Mexico since May, 2017, a market of at least $50 million for India.