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Post-COVID: Indian Companies look in the direction of three Central American nations for enterprise alternatives

In the Healthcare & Hygiene Expo, which was organized with trade physique FICCI, prime 15 Indian firms together with BPL, Dabur, Raymond UCO and Sri Sri Tattva had made their shows.

Indian mission in Guatemala was maybe the one mission in Central America which in the course of the international lockdown organized six main digital conferences and exhibitions showcasing varied sectors of India.

“Indian business establishments should look at this region with a strategy to expand market share and not just look at this region as small countries with small populations. “Minimum population and Maximum business share” must be the strategy. Our merchandise provide good high quality at inexpensive costs. With sustained efforts, we can improve our market share in these nations and that can present enough returns on investments,” Indian envoy to Guatemala, El Salvador and Honduras, BS Mubarak, tells Financial Express Online.

Between June-September these digital conferences and exhibitions gave insights to patrons from Guatemala, El Salvador and Honduras in sectors like Healthcare & Hygiene; Indian Textiles; Food, Agriculture and Agro; Technology, FMCG Supply Chain; and SRTEPC Textiles.

Why so many conferences throughout international lockdown?

Ambassador BS Mubarak, says, “The lockdown due to COVID-19, gave us an opportunity to use the virtual platform to showcase various sectors. Large companies from various sectors here in Guatemala, El Salvador and Honduras showed interests and through these virtual meetings concerns related to distance, language etc were addressed.”

In the Healthcare & Hygiene Expo, which was organized with trade physique FICCI, prime 15 Indian firms together with BPL, Dabur, Raymond UCO and Sri Sri Tattva had made their shows to greater than 100 firms from three Central American nations. “The response we got was very encouraging and through such BSMs and meets virtually, one gets not only networking without stepping out but is also able to network with companies in these countries, with tangible business transactions,” the Indian envoy to Guatemala, El Salvador and Honduras mentioned.

According to Ambassador Mubarak, “The first virtual meet the mission organized was early June and it was for showcasing Indian Textiles. In fact, Textiles is one of the major export items in the region. The purpose was to give an insight into how the Indian companies are ready to do business post-COVID.”

Around twelve sellers together with Britannia, Axess Seven, Jabs International, Dabur, Patson Foods and Swastik Gum Industries had showcased their merchandise to over 80 patrons from in the course of the Food, Agriculture and Agro meet in August. “Guatemala is a green country and they are already exporting to India. India based Jabs International is one of the biggest importers of commodity from Guatemala. This is the best time for Indian companies to be part of the supply chain in the region,” the envoy provides.

In an unique digital meet organized by FICCI for Central America, held in August the FMCG Supply Chain expo had the Guatemalan Minister of Economy, Tony Malouf, because the chief visitor. “Around 15 companies from India and more than 100 companies from Guatemala, El Salvador and Honduras had participated in the event. There are opportunities for Indian companies for ready to eat products, allied products, packaging, agritech, diesel engines and other machines. The countries in the region prefer Indian machinery.”

Last month, main textile firms from India together with Aditya Birla Group, Nagreeka Group, Rachna Art Prints, Raymond, Reliance Industries Limited and Rughani Brothers introduced their textile merchandise to 60 patrons from the three nations which fall underneath the India mission. The shows had been made in the course of the Synthetic and Rayon Textile Export Promotion Council (SRTEPC) on-line expo.

“Preferential trade agreements with individual countries and or creating Joint Economic Commissions to sort out trade-related issues and issues related to tariff and non-tariff barriers would help the companies to increase the footprints of the Indian companies,” a prime diplomat instructed Financial Express Online.

Issues that must be addressed

There can also be an pressing want to scale back the time of transit for items which might be being exported from India. Presently it takes roughly 70 days for containers from India to achieve Central America and The Caribbean. This have to be introduced down by partaking all stakeholders together with transport and logistic firms. Countries from the Far East are in a position to ship items in 30 days.

To set up warehousing facility as this may offset the problems associated to time taken for Indian items to achieve Central America and the Caribbean. This technique of holding inventory has actually helped some firms increase their market. “Until we have a solution for fast transport of goods, warehousing the facility can help us tackle this issue.”

Expert View

Sharing her views on the rising alternatives in Central America, Dr Aparaajita Pandey, Asst. Prof, Institute of Public Policy, Amity University, NOIDA, says, “As India finally has begun looking to the far west as a potential opportunity for growth in trade and investment, our trade relations with Latin America and the Caribbean are on an upswing. However, most of the trade, investments, and political focus revolves around the larger South American nations like Brazil, Argentina, Chile, in limited context even Venezuela and Mexico in the north. The inherent bias of being a larger country gives India a tunnel vision in a region that we have just started to explore for possible partnerships.”

“This prejudice is in no way unique to India as most international trade partnerships around the world tend to focus on the geographical position of the country, it’s historical and present political position, and most importantly the size of its economy. This along with perpetual ignorance about the region has led India to overlook the potential that Central America has for investment, trade, and trade agreements,” she opines.

According to Dr Pandey, PhD from Centre for Latin American Studies, JNU, “Central American countries, though much smaller in size than their South American neighbours and admittedly with lesser resources have for the past half a decade consistently registered a higher growth rate than other sub-regions of Latin America. The nations of the region, even those riddled with violence have seen not just a growth in GDP higher than the rest of the region; they have also managed to grow immensely in the services sector, the same sector that is steadily becoming a shining beacon of the Indian economic matrix. In addition to a burgeoning services sector, the Central American region is also witnessing a digital revolution and is increasingly adopting IT and It solutions, thereby, providing India with convenient investment opportunities.”

“Another feature of the Central American region is its unification under the Central American Integration System (SICA). Unlike their South American brethren, who have a spaghetti bowl of intertwining regional organisation, each claiming to be representative of all of South America and each failing at it spectacularly; Central American countries are grouped under the umbrella organisation of SICA. This makes it easier to not only establish politico-economic relations but also negotiate trade pacts and agreements with the entire region as a whole. This is something that India has been trying to effectively manage in South America with limited success. Central America has propped itself quite well on the opportunities pedestal, that India must explore,” Dr Pandey concludes.

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