Indian companies have, over the last decade or so, invested $3 billion in the Caribbean region, and Trinidad and Tobago, in particular. The region, rich in natural gas and oil, as well as in mineral reserves, apart from its focus on sugarcane and ethanol, has immense opportunities for Indian business.
The country that has attracted the largest Indian investment in the entire Latin American and Caribbean region is neither Brazil nor Mexico. It is Trinidad and Tobago, which has drawn a total of $3 billion of Indian investments. Mittal Steel has invested $1.8 billion, while Essar Steel is setting up another steel plant costing $1.2 billion.
Trinidad and Tobago offers greater investment opportunities in petrochemicals, chemicals, methanol, ammonia, fertilisers and downstream industries, using the abundant and inexpensive natural gas and oil produced by this energy-rich country.
A 20-member business delegation, led by that country's Minister of Trade and Industry, Mr Kenneth Valley, visited Mumbai and New Delhi in March to interact with business persons and attract more Indian investment.
Shapoorji Pallonji, the Mumbai-based engineering and construction major, just completed building a $25-million cricket stadium in Guyana. Larsen and Toubro has built a $30-million stadium in Barbados. Earlier, L&T had executed a power transmission line project in Suriname. Kirloskar has bagged irrigation project contracts in Jamaica, Guyana and Suriname, while BEML has supplied earthmoving and mining equipment to Suriname.
These companies are now exploring more opportunities of getting more projects and business, making use of their presence in the region. A Reliance delegation was in Suriname last month looking at the possibility of oil exploration and production as well as mining.
Some of the Caribbean countries have rich reserves of minerals. Guyana, Jamaica and Suriname have vast bauxite reserves, while Guyana has gold and Suriname has gold and diamond mines.
Suriname and Guyana have extensive forests where Indian companies can make investments and bring wood and pulp to India. Some Indian companies are already importing timber from the region.
Sugar and ethanol
The sugar sector is emerging as a new area of opportunity. Many Caribbean countries are facing a crisis in this sector following the end of privileged access to the European Union for their sugar with high prices and assured quotas. Indian sugar companies can invest in this sector for production of ethanol. The Dhampur Sugar Mill group, which is undertaking a project for modernisation of a Jamaican sugar mill, is exploring such opportunities.
The ethanol produced in the Caribbean can be brought to India, which has started the programme of ethanol addition to petrol. The success story of Brazil's ethanol fuel programme has inspired even the US to take this route seriously. The Brazilians are pushing for commoditisation of ethanol, like crude oil and natural gas, so that a global market can be created. This is, therefore, the right time to make a move in this area.
Exports to Caribbean
India's exports to the Caribbean are modest, but growing. The total imports of the Caribbean countries are worth $22 billion and Indian exporters can get at least one per cent share of this, which would amount to $220 million, if they take this market seriously. The largest importers are Trinidad and Tobago and Jamaica, which in 2006 imported goods worth $8.8 billion and $4.7 billion respectively.
Although the Caribbean countries are small individually, they are integrating their markets, infrastructure and institutions, forming a common market called the Caribbean Community (Caricom). It has 15 member-states with a total population of 15 million and a GDP of $45 billion. Caricom provides for free movement of goods, services, capital and people.
A Common External tariff is in force since 1993. It is now moving towards the next stage of its integration called CSME, Caribbean Single Market and Economy by 2008. A single currency and harmonisation of national economic policies are part of CSME goals.
Caricom plans to have a common passport and visa as part of the integration. Eight countries have started issuing Caricom passports. During the World Cup, special Caricom visas are being issued by designated countries. The West Indies cricket team itself is a manifestation of Caribbean integration.
Regional entity
Caricom has come to stay as a regional entity with collective strength. It takes common positions on regional and global issues and expresses itself often as a single voice. Caricom has signed cooperation agreements with other countries and regional groups.
Recognising the importance of Caricom, India has established institutional cooperation with individual countries and the Caricom organisation. An Indo-Caricom Foreign Ministers meeting was held in Suriname in 2005. It is proposed to hold such Ministerial meetings periodically.
The Government of India gives 160 training scholarships every year to Caricom nationals and has computerised the Caricom Secretariat with a grant of Rs 8 crore. India has provided project assistance to a number of countries, the latest being the cricket stadium built with a grant of Rs 27 crore and a concessional Line of Credit of Rs 85 crore.
The Indian Government has given concessional Lines of Credit of over Rs 450 crore to Guyana, Suriname and Jamaica for promotion of economic cooperation.
The Caricom region should be a comfort zone for Indian business because of two factors: the language is English and there are about a million people of Indian origin in Guyana, Trinidad and Tobago, Suriname and Jamaica.
R. Viswanathan
(The author is with the Ministry of External Affairs)
This Article was Published in The Hindu Business Line on Tuesday, Apr 24, 2007
----------------------------------------------------------------------------
World Economic Forum on Latin America on 26 April 2007
--------------------------------------------------------------------------------
Davos Annual Meeting 2007-Latin America Broadens its Horizon
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment