India is now among the top ten trading partners with Mexico and the bilateral trade between the two countries is expected to touch the $10-billion mark, likely before 2020.
India is now among the top ten trading partners with Mexico and the bilateral trade between the two countries is expected to touch the $10-billion mark, likely before 2020. Several trade-related issues and market access for avocados, agave syrup, tequila, etc, have been under discussion with Mexico. The highlight of the year is the invitation to India to be the Guest of Honour Country at the Cervantino International Festival in October 2018. Indian ambassador to Mexico Muktesh Pardeshi interacts with FE’s Huma Siddiqui. Excerpts:
What kind of incentives is Mexico offering to India?
Mexico is now India’s biggest trade partner in the Latin American region and the second biggest in all Americas. In 2017, bilateral trade grew by 33 % and reached $8.35 billion. As Mexico is part of the OECD and G20, the processes are quiet streamlined in order to suit the investors and traders. Unfortunately, there are no direct shipping or aviation lines yet, however, there is ProMexico office located in New Delhi, and bilateral Agreements, and other arrangements are in place to facilitate bilateral trade, investment and economic cooperation.
Which IT companies have widened their operations in Mexico?
Several Indian IT majors like TCS, Infosys, Wipro, HCL are operating in what is called the Silicon Valley of Mexico — Guadalajara. Together, Indian IT companies employ approximately 7,000-8,000 people in different cities and they have been expanding their operations in Mexico. They are present in Guadalajara, Monterrey and Mexico City since last 10 years. Mexico allows people to enter with a valid US visa but the working professionals need to have Mexican work permit. Indian IT companies in Mexico have to deal with the issue to employ skilled personnel from abroad on account of the 90:10 rules for ratio of Mexican and foreign workers. As per the Article 7 of the Federal Labour Law, which is in accordance with the Article 123 (A) of the Mexican Constitution on the rights and obligations of employees, only 10% of the total workforce of a company can be employed from foreign countries.
Indian companies, especially auto makers, are keen on using Mexico as a gateway to the region. How has that helped?
Mexico enjoys a strategic geographical location and has emerged as the biggest export market for India-made cars. Indian companies have a good presence in the auto sector with an export value of $2 billion in 2017.
Mexico is India’s one of the largest suppliers of crude. Are there plans to boost it further?
India is Mexico’s third biggest buyer of crude oil in the world. Mexico exported crude oil worth about $2.6 billion in 2017, a growth of 69% over 2016 ($1.5 billion). This is a significant jump. This suggests that Mexico has become a reliable partner in our energy security. However, despite the increase in the imports from Mexico, the trade balance remains comfortably in favour of India. From Mexican side, nonetheless, the major product remains crude oil, accounting for 72% of the total trade.
How do you see our overall relations with Mexico in the coming years?
We are witnessing a new dynamism in our ties following the successful visit of Prime Minister Narendra Modi to Mexico in June 2016. The Privileged Partnership which was agreed upon in 2007 has seen a threefold increase in bilateral trade and a substantial rise in investments.