Image Source: AP Photo/Eduardo Verdugo.
As India aims to become the world’s third-largest economy by 2030 and actively seeks to strengthen its ties with Latin America, Colombia risks missing out on the opportunity to benefit from this partnership without a strategic approach.
India, which is on track to become the world’s third-largest economy and a leading oil consumer before 2030, has shown a growing interest in Latin America. This interest is driven by India’s desire to expand its influence, strengthen relations with strategic allies to sustain its economic growth, and address its historical underrepresentation in the region. The relationship between Colombia and India, which has spanned over six decades, can benefit from this growing interest as long as Colombia is smart and keen enough to take advantage of it.
India’s interest in Colombia has been made clear through visits by high-ranking officials, including the Minister of External Affairs, Subrahmanyam Jaishankar, in April 2023, and the Minister of Electronics and Information Technology, Rajeev Chandrasekhar, in February 2024. This strategy is consistent with India’s foreign policy modus operandi, which promotes multilateralism and South-South cooperation. India typically avoids exclusive alliances with any power bloc, striving to maintain cordial relations with most countries while prioritizing trade and development.
Greater engagement allows Colombia to strengthen this strategic partnership with India and benefit from its projected economic ascent. However, despite the promising outlook, Colombia has not taken meaningful actions to fully seize this opportunity. The absence of a strategic vision and a clear roadmap for long-term goals from Colombia, along with few concrete measures to court Indian investment specifically, has cut short the bilateral relationship’s potential. As a result, Colombia is at a disadvantage compared to other Latin American countries that have already made progress in capitalizing on their relationship with India regarding pharmaceutical investment, agricultural exports, technology exchanges, and extractive sector exports.
Colombian authorities have overlooked these sectors, which have the potential to reap significant benefits, some of which we outline below.
- Extractive sector: India’s rapid industrial growth and increasing energy demands drive its search for reliable sources of raw materials such as oil, coal, and minerals. Endowed with abundant natural resources, Colombia stands well-positioned to meet this demand. Nevertheless, there are obstacles to the relationship’s growth, considering the Petro administration’s policies curtail extractive sector growth and point to an overall reduction in fossil fuel dependency, including exploration and production. Furthermore, security threats in extractive sector production and exploration areas discourage potential investors, including North American and European countries. It is unlikely that Indian companies will have a greater risk appetite in a country with seemingly little engagement and interest in developing this sector.
- Pharmaceutical sector: India’s trajectory to become the leading global supplier of medicines by 2030 creates a strategic opening for Colombia to address its pharmaceutical challenges, including drug shortages and increased demand for generic drugs. Improving trade relations in this sector will allow Colombia to benefit from India’s extensive pharmaceutical manufacturing and distribution expertise. However, questions about the uniformity of Indian company’s adherence to quality standards and drug safety suggest that Colombian regulators must be vigilant to guarantee the safety and efficacy of Indian imports. Technology transfers in this area, including the production of vaccines and medical equipment, present significant opportunities for Colombia and India.
- Technology sector: Indian IT companies have established a significant footprint in the Colombian market, recognizing its potential as a regional tech hub and capitalizing on the local government’s prioritization of the tech sector as an opportunity. This is the only sector with multiple high-level ministerial meetings, suggesting a growing interest in bilateral cooperation in this sector as government engagement intensifies. However, a shortage of skilled IT professionals and significant cybersecurity challenges in Colombia hamper the growth of this sector. By addressing these issues, Colombia can attract more Indian tech firms and foster innovation and technological advancement.
- Agro-industrial sector: This is the least developed sector in the bilateral relationship, despite being a central component of Colombia’s export economy. Modernizing the industry and expanding the number of trade partners for Colombian exporters is a top priority for Colombia’s export promotion agency; collaborating with India, which has a wealth of experience in agricultural innovation and a growing demand for food to feed its population, is an opportunity for Colombia to increase farming productivity and attract investment. Colombia needs to adopt advanced farming technologies and techniques, improve security in rural areas, and implement bolder policies to promote agricultural exports to the Indian market.
The bilateral relationship is full of potential. However, Colombia’s failure to adopt a strategic and proactive approach has prevented it from capitalizing on the opportunities, and we do not think Colombia’s current government has the disposition or interest to capitalize on its relationship with India fully. Just as Colombia missed the train with China’s rise, we fear that unless Colombia develops a coherent and consistent strategy, the same will happen with India.
Sergio Guzmán is the Director of Colombia Risk Analysis, a political risk consulting firm based in Bogotá. Follow him on Twitter @SergioGuzmanE and @ColombiaRisk.
Carolina Gonzalez is a Junior Analyst at Colombia Risk Analysis. Follow her on Twitter @cgonzaleztatis.
This piece was adapted from Colombia Risk Analysis’ most recent Special Report on Local Perceptions Of Indian Investment In Colombia, available online at https://bit.ly/IndianInvestment-Colombia
All opinions and content are solely the opinions of the authors and do not represent the viewpoints of Global Americans.
