India turns eyes to Latin America - India is increasing its presence across Latin America and the Caribbean with investments in a wide range of projects

Indian investors turn eyes to region

Copper ventures in Bolivia. Telecommunication partnerships in Brazil. Construction endeavors in Trinidad and Tobago. Even oil exploration investments off the coast of Cuba.

These are just a few of the financial projects funded with Indian capital as part of a new and expanding trend across Latin America and the Caribbean. India, it seems, is gaining momentum with trade, competitiveness and foreign investments in the Americas, creating a name for itself among some experts as "the next China."

"India is a growing power investing in areas in which it can obviously reap returns," said Anthony Bryan, a senior associate of the Americas Program at the Center for Strategic and International Studies, based in Washington.

"India is utilizing its overseas constituencies to establish itself in retail and financial areas," he said. "It's a big player in the region, as much as China intends to be."

India has long had business ties with Trinidad, for example, where people of African and Indian descent make up most of the population. But the infusion of Indian capital elsewhere in the Americas began in earnest within the past five years, experts said.

Exports from India to Latin America stretch from Argentina to Uruguay and include auto parts, drugs, textiles and machinery.

The trade expansion is the result of India's relaxation of rules for foreign investment, an increasing interest in raw materials, a lucrative information-technology industry and a vibrant economy. India is now the world's fourth-largest economy, with an estimated growth rate of about 7.5 percent a year.

"India now boasts highly competitive private companies, a booming stock market and a modern, well-disciplined financial sector," according to a recent analysis published by the Council on Foreign Relations, a think tank with offices in Washington and New York.

"And since 1991 especially, the Indian state has been gradually moving out of the way -- not graciously, but kicked and dragged into implementing economic reforms," the analysis stated. "It has lowered trade barriers and tax rates, broken state monopolies, unshackled industry, encouraged competition and opened up to the rest of the world. The pace has been slow, but the reforms are starting to add up."

In Brazil, joint ventures include healthcare, information technology services and auto parts. Plans also are underway to tap the growing market for alternative fuels. Mexico has joined forces with Indian pharmaceutical companies. Argentina has signed agricultural agreements. And Venezuela's state oil giant, PDVSA, reportedly has agreed to deliver crude oil to India as part of a policy to diversify its oil trade.

"India is focusing on the technology of the future," said Maria Velez de Berliner, president of Latin Trade Solutions, an international business development and consulting firm in Alexandria, Va.

Velez said savvy Indian investors used to working around corruption, political instability and bureaucracy have used their expertise to make inroads in the Americas, where many of the same problems exist.

"Whereas the United States is concerned with instability in Latin America, India and China see the region as familiar territory," Velez said. "They are dealing with Latin America as is, not trying to change it."

She points to a new $2.3 billion investment by an Indian firm for a copper smelter in Bolivia as evidence of the growing trend.

"I believe that the most significant investment by India in Latin America is this $2.3 billion initial investment at a time when nobody wants to invest in Bolivia," Velez said. "They are going to create close to 1,000 direct jobs and about 16,000 indirect jobs. It's the largest investment in the Andean region."

In the Caribbean, India has the most investments in Trinidad.

Projects include steel, construction and retail investments. Last October, in what was dubbed as Trinidad's largest single foreign investment, Indian conglomerate Essar unveiled plans for a $1.2 billion steel complex at Point Lisas, on the west coast of central Trinidad.

When fully commissioned, scheduled for 2010, the project is expected to have an annual turnover of $800 million and provide direct employment for 1,400 people and indirect employment for more than 6,000.

Perhaps the riskiest of business ventures involves oil exploration in Cuba.

India has purchased 30 percent interest in the share of blocks held by Spain's Repsol-YPF energy company for oil exploration off the coast of Cuba.

"We are hopeful we will find oil," Rao Inderjit Singh, a former junior foreign minister, told reporters at the end of a visit to Havana last year.

Cuba has been identified as having potentially oil-rich Gulf of Mexico waters off the island's northwest coast. The government opened to foreign exploration in the 1990s. During the first deep-water well drilled in Cuba in 2004, Repsol reported the discovery of noncommercial quantities of good quality oil.

"India saw something in the data that was worth the risk," said Jorge Pinon, an oil expert at the University of Miami. "Clearly, they saw an economic opportunity."