At first glance, India and South America may appear to be two distant regions, geographically far apart and with few elements in common. However, there is growing convergence between the two, along with significant potential for further deepening their ties. In recent years, relations between the two sides have undergone a process of expansion centered primarily on economic exchange.

What characteristics define the patterns of trade relations between India and the countries of South America? What opportunities and challenges do both sides face in strengthening their economic ties?

India-South America Trade Relations

In line with India’s growing weight as an international actor and the increasing relevance of its participation in the global economy, its trade relations with South American countries have deepened over the course of the present century, following decades during which bilateral trade remained relatively limited.

The importance of South America to India was underscored by Prime Minister Narendra Modi’s recent tour of the region in July 2026, which included official visits to Brazil and Argentina. This development demonstrated that, although the economic and trade dimension remains the main pillar of relations, ties between the two sides are progressively extending beyond this sphere, with a growing political and diplomatic dimension.

One of the aspects highlighted by both India and South American countries is the complementarity between their respective economies, which creates favourable conditions for trade. India’s vast population and high demand for commodities make the Asian country a highly attractive market for Latin American exporters, while South America represents an important source of natural resources, energy, and minerals for India. Trade figures reflect this trend: during the 2024–2025 period, India’s total trade with Latin America and the Caribbean reached USD 39.19 billion.

In general terms, India–South America trade is characterized by a pattern in which India supplies manufactured industrial goods and services related to information technology, while South American countries primarily export commodities and other primary products. Indian exports to these countries consist primarily of pharmaceuticals, chemicals, agrochemicals, machinery, mechanical and electrical equipment, vehicles, auto parts, petroleum products, textiles and yarns, rubber and plastic products, among others.

The current dynamics of India’s trade relations with the different countries of South America can be examined on a country-by-country basis. The countries are grouped into three categories according to their membership in regional economic integration arrangements: (a) countries belonging to MERCOSUR; (b) countries belonging to the Pacific Alliance; and (c) countries belonging to neither of these blocs.

India-MERCOSUR trade

Established in 1991, MERCOSUR include Argentina, Bolivia, Brazil, Paraguay, and Uruguay among its members, while Venezuela is currently suspended. These countries maintain a joint external negotiation mechanism, meaning that any Free Trade Agreements (FTA) to be concluded with third parties must be negotiated and signed jointly within the framework of the bloc.

India and MERCOSUR signed a Framework Agreement in 2003 and a Preferential Trade Agreement in 2004, which entered into force in 2009. In 2025, trade between the two sides reached USD 20.84 billion. Although these instruments are often considered limited in scope and economic ties are widely regarded as having significant untapped potential, there have recently been statements expressing a desire to deepen and expand them.

India’s main trading partner within MERCOSUR is Brazil, with which it has maintained a Strategic Partnership since 2006. The two countries also share important points of convergence from a political perspective, particularly in their views on the international order. Both are members of BRICS and have maintained sustained cooperation in multilateral forums. Brazil is a significant actor to consider in India’s engagement with South America, given its status as a regional power with considerable political weight at the international level and global ambitions, as well as its population of approximately 214 million people.

Bilateral trade between India and Brazil reached USD 15.21 billion in 2025, representing growth of more than 25% compared to 2024. This trend intensified during the current year: in the first seven months of 2026 alone, bilateral trade reached USD 10.1 billion, registering year-on-year growth of 32.9%. Regarding the composition of bilateral trade, whereas Indian exports —as mentioned above— consist primarily of manufactured and higher value-added goods, Brazilian exports to India, meanwhile, consist primarily of crude soybean oil, sugar, crude oil, and cotton. In 2025, Brazil imported nearly USD 700 million worth of pharmaceutical products from India.

Trade relations with Argentina are smaller in scale compared to those with Brazil, but this does not make them any less significant. This was demonstrated by the elevation of bilateral ties to the level of a Strategic Partnership in 2019, as well as by the recent visit of PM Modi to Argentina, the first official visit by an Indian head of government Buenos Aires in 60 years.

Exchange between the two countries amounted to approximately USD 6.56 billion in 2025, with Argentine exports to India reaching USD 5.472 billion and imports from India amounting to approximately USD 1.09 billion, which resulted in a significant trade surplus for the South American country. According to official sources, India became Argentina’s fifth-largest trading partner that year, while Argentine exports to India recorded significant year-on-year growth of 39.1%. Argentina’s export basket to India is dominated by agro-industrial products, particularly those derived from the oilseed complex, most notably crude soybean oil and crude sunflower oil. India is, in particular, the main destination for Argentine soybean oil exports.

Third place is occupied by Bolivia. The most recent available data indicate that bilateral trade reached USD 1242 billion in 2023–2024, while in December 2025, Bolivian exports to India reached USD 145 million, representing year-on-year growth of 662% compared to December 2024. Bolivian exports to India are concentrated primarily in gold, fertilizers, mineral residues, leather and wood. It is worth noting that India is the main destination for 60% of Bolivian gold exports, making the Asian country a particularly important trading partner.

With Paraguay and Uruguay, trade is of smaller magnitude, amounting to USD 529.65 million in the case of Paraguay —which runs a significant bilateral trade deficit— and USD 238.44 million in the case of Uruguay. Paraguay’s main exports to India include fats and oils, aluminum, iron and steel, leather and wood, while Uruguay’s exports are concentrated primarily in wood, wool and copper products. Once again, India’s export profile to these markets remains relatively diversified and concentrated in manufactured and higher-value-added products.

India-Pacific Alliance Trade

The Pacific Alliance was established in 2011 and comprises Chile, Colombia, Mexico and Peru. These countries are characterized by a trade policy oriented toward free trade, with limited use of trade policy instruments and “deep integration into global markets”. The Alliance does not currently have a bloc-level trade agreement with India. Unlike MERCOSUR, its member states retain the ability to independently negotiate and conclude FTA with third parties.

Chile is the only member of the Pacific Alliance that maintains an agreement of this kind with India, which has been in force since 2007 and was expanded in 2017. Currently, the two countries are also negotiating a Comprehensive Economic Partnership Agreement. In 2025, Chile became India’s fifth-largest trading partner in the whole Latin America region, with bilateral trade reaching USD 5.38 billion, representing year-on-year growth of approximately 40%. Copper constitutes the core of Chilean exports, although in recent years there has been some diversification of the export basket, particularly through products such as pulp, fruits and chemical industry manufactures.

Peru and India are also currently engaged in negotiations aimed at concluding a FTA. India is Peru’s third-largest trading partner, while Peru ranks among India’s top five trading partners in Latin America. In 2025–2026, bilateral trade reached USD 10.02 billion, with Indian exports to Peru amounting to USD 1.15 billion and Indian imports from Peru totaling USD 8.87 billion. Peru’s export basket is highly concentrated in gold, followed by products such as copper, grapes, fishmeal and calcium phosphates.

With regard to Colombia, its trade relationship with India is also characterized by complementarity, with petroleum playing a central role. Bilateral exchange adopted an upward trend from 2017 onward, driven primarily by the increase in Indian purchases of this commodity. In 2023–2024, it reached USD 4.31 billion, with Indian exports to Colombia amounting to USD 1.22 billion and Indian imports from Colombia totaling USD 3.10 billion. The South American country’s exports to India consist mainly of petroleum, coal, precious stones, aluminum, zinc and wood.

Trade Relations With Other Countries

Among the remaining South American countries that are not members of either MERCOSUR or the Pacific Alliance, commercial relations with India are also significant, particularly in the energy sector, given the importance of oil resources in several of these countries. Suriname constitutes an exception: despite the presence of a large population of Indian origin, trade remains relatively modest. In 2023–2024, exchange between the two countries amounted to USD 51.85 million. Surinamese exports to India include wood, aluminum, textiles, herbal products, garments, spices and electrical machinery.

Venezuela represents a substantially different case. Although it formally remains a member of MERCOSUR, it has been suspended from the bloc since August 2017, when the member states invoked the Ushuaia Protocol on Democratic Commitment. Venezuela possesses the world’s largest proven crude oil reserves. Historically, hydrocarbons have therefore played a central role in India–Venezuela relations. Bilateral trade reached USD 6.397 billion in 2019–2020, of which Indian imports from Venezuela accounted for USD 6.057 billion. Exchange subsequently declined sharply, reaching only USD 424 million in 2021–2022, before recovering to USD 1647 billion in 2024–2025. After a period in 2025 during which India ceased importing Venezuelan oil, the South American country once again became one of India’s major oil suppliers during 2026, having shipped 178.000 barrels per day in July 2026 alone.

Commercial relations between India and Guyana have also gained increasing importance in recent years. Bilateral trade rose from USD 223.36 million in 2021–2022 to USD 430.88 million in 2025–2026, largely driven by India’s purchases of Guyanese crude oil. India began importing oil from Guyana in 2021, while a second shipment was made in November 2025. The two countries also signed a five-year Memorandum of Understanding on cooperation in the hydrocarbon sector in 2024, evidencing the growing centrality of hydrocarbons to the recent development of bilateral relations.

Oil is also at the core of the commercial relationship with Ecuador, accounting for more than half of bilateral trade in value terms. Ecuador also exports gold and teak wood to India, although to a lesser extent. Overall, bilateral trade has experienced a recent decline, falling from approximately USD 1.31 billion in 2021–2022 to USD 668.53 million in 2024–2025. It is worth noting that both countries began working towards a Preferential Trade Agreement in 2017, although the negotiating process has remained stalled, despite the two countries’ expressed intention to resume it in September 2023.

Opportunities and Challenges

The deepening of commercial ties between India and South America is acquiring strategic importance for India in light of its need to diversify its sources of supply amid disruptions to global supply chains and the broader international economy.

The Russia–Ukraine war increased the need to identify alternative suppliers of vegetable oils. In this context, Argentina and Brazil gained importance as sources of supply and as commercial partners, benefiting from increased Indian demand for their products. A similar dynamic can be observed in the energy sector. Recent disruptions and geopolitical tensions in the Middle East have highlighted the risks associated with excessive geographical concentration in energy supply. 

Given India's high dependence on imported oil, these circumstances encourage greater engagement with South American producers such as Venezuela, Brazil, Colombia, Ecuador and Guyana. The increase in Indian imports of Venezuelan oil during the current year provides a clear example, following a period in which imports from this country had been practically discontinued.

Against the backdrop of a turbulent global economy, South America can therefore be viewed as a geographically diversified alternative source of supply, with substantial availability of agricultural, energy and mineral resources and comparatively lower direct exposure to some of the world’s major conflict zones.

For South American countries, meanwhile, diversifying their range of economic partners can also be beneficial, particularly as a means of reducing excessive dependence on external actors such as China. This consideration becomes increasingly relevant amid growing strategic competition between the latter and the United States, as diversification may provide South American countries with greater room for manoeuvre and reduce pressure to align exclusively with either power.

Economic complementarity constitutes another important variable. India has a growing demand for energy, food and raw materials, sectors in which several South American economies possess significant production capacities. At the same time, India's productive structure has a strong manufacturing component. From the perspective of comparative advantage, these different production structures create opportunities for trade based on specialization.

However, the deepening of these ties is not without challenges. For South American countries, the same complementarity that creates trade opportunities also revives debates concerning deindustrialization, dependence, autonomy and development. A relatively limited share of India–South America trade is associated with global value chains, while a substantial part continues to involve traditional exchanges of primary commodities and manufactured goods. The specialization of South American economies in commodities, combined with India's stronger position in higher-value-added products, raises the question of whether expanding commercial relations could reinforce existing patterns of “primarization”, potentially constraining local industries. Despite the promising potential of expanding India–South America trade, these developments may also generate broader debates over whether such ties will contribute to local development and economic diversification or, conversely, reproduce historical patterns of centre–periphery relations in the region's international economic integration and trade with external powers.

Geographical distance, reflected in higher logistics costs and longer transportation times, also represents a challenge for both sides. India must also take into account the considerable heterogeneity of the region, as South America encompasses different integration arrangements, political orientations and economic realities.

In the case of MERCOSUR, external trade policy is formally coordinated at the bloc level, but differences among member states in their approaches to international economic integration, trade liberalization and relations with major external powers can limit the degree of coordination achieved in practice. The situation differs in the Pacific Alliance, whose members retain greater autonomy to negotiate trade agreements with third countries and have developed stronger links with international markets and production networks. Indeed, despite the relatively limited participation of India-South America trade in global value chains, a significant share of this interaction is concentrated in Pacific Alliance economies.

India–South America trade presents both opportunities and challenges that need to be managed as the relationship continues to develop. Despite certain obstacles, growing economic complementarity and the need for greater diversification create important opportunities for deeper engagement. The relationship therefore holds considerable potential, provided that both sides address these challenges and work towards mutually beneficial economic ties.

(The author holds a BA in International Relations from the National University of Rosario, Argentina, and is currently an Editorial Intern at South Asia Monitor. The views expressed are personal. He can be reached at santisosa30@hotmail.com.)