Latin America and India have been emerging as significant trade, investment and political partners to each other since the beginning of the new century. The old assumption that these two are marginal to each other because of distance and other barriers is no longer valid.
India exports more to the distant Guatemala than to the nearby Cambodia. Brazil takes more exports from India than Thailand or Japan. Latin America is the destination for one third of India’s global exports of vehicles. Mexico is the second largest market for India’s car exports while Colombia is the number two destination for motorcycle exports. India’s trade with Latin America was 45 billion dollars in 2021-22 and is poised to reach 100 billion in the next five years. India was the third largest market for Latin America’s exports in 2014 and was the seventh in 2021. A Mexican company Cinepolis is the fourth largest operator of multiplexes in India and another Mexican firm Grupo Bimbo is one of the top bread makers in India. UPL, the largest Indian agrochemical company does more business in Latin America than in India. Latin America and India have many common development challenges and aspirations. The two sides work together on many global issues of interest to each other.
But the Indians and Latin Americans have been getting information and opinion about each other through western media such as CNN, BBC, New York Times and Financial Times as well as through books and article of western authors who give biased and condescending picture. There is need for direct study and exchange of opinions about each other. It is in this context, I welcome the book India from Latin America: Peripherisation, State Building and Demand-led Growth by Manuel Gonzalo, the Argentine author and Professor of Development Economics. Gonzalo gives a Latin American perspective of the history of India’s economic development.
This is the first academic work of its kind. Gonzalo has seen India with his own eyes and read Indian books. He has direct experience of having lived in India and working with Indian scholars. He was visiting researcher at the Centre for Development Studies, Jawaharlal Nehru University, Kerala. Gonzalo’s book has a Foreword from Dr. K.J. Joseph Director, Gulati Institute of Finance and Taxation and President of Globelics, Thiruvananthapuram, Kerala.
Gonzalo’s view of India is shaped largely based on the Latin American Structuralist theory of a fellow Argentine economist Raul Prebisch, who was also known for the Dependence Theory of the 1950s. Gonzalo has looked at India from three angles: Peripherisation, State Building and Demand-led growth. He has narrated the development path of India comprehensively with extensive research and detailed data. He has placed the economic development within the context of historical, political and social history as well as the foreign policy of India.
Centre-Periphery divide is the essence of the Latin American Structuralist theory with focus on the consequences of the external sector constraints: the relevance of terms of trade, the structural inflation dynamic and “import” inflation and the challenge of achieving industrial competitiveness.
India was the second-most important manufacturer with 25% share of global manufacturing and the main textile producer of the world. The British reduced India into a periphery during the colonisation. But since independence, India is moving steadily back to the centre with increasing emphasis on manufacturing. On the other hand, Latin America has been turned peripheral since its independence by a process of forced peripherisation. India’s per capita endowment of natural resources is extremely low unlike Latin America which has pursued an export-led model of growth
During colonisation, the European powers had structured the global trade network determining the peripheral role of the Southern Hemisphere in line with their financial and trade needs. They inserted Latin America into their global trade network as a mineral exporter. These minerals went first to Europe but were then re-oriented in the form of bullion to Asia, to pay for the Chinese tea and porcelain and the Indian textiles. it was silver from the Americas that greatly contributed to the making of Asian trade. The Spanish conquest had made silver cheaper in Europe than in Asia. These events, together with the almost inexhaustible demand for silver from India, made it possible to continue the purchases of Asian goods until the mid-eighteenth century.
The second part of the book analyses the emergence of the Indian state and the Indian National System of Innovation. These are divided into three phases: Nehruvian phase, Indira Gandhi’s phase and the third by her son, Rajiv Gandhi.
The author has highlighted the direct interest taken by Nehru in science and innovation. Nehru had created the Ministry of Scientific Research and Cultural Affairs in 1948 and took on the portfolio himself. The building of Science and Technology infrastructure with new universities, science agencies and national laboratories came under the control of this ministry. Nehru had used his annual full-day attendance at the Indian Science Congress every year to strengthen his association with the scientific community. Some of the main science agencies created and expanded were the Council of Scientific and Industrial Research (CSIR), with a network of 38 national laboratories in physical, biological, mechanical, and chemical sciences; the Department of Atomic Energy; the Defence Research and Development Organisation (DRDO), the Indian Space Research Organisation and the Indian Institutes of Technology (IITs). Gonzalo says, quoting some experts, that such large number of institutions for science and technology had no rival in the third world and even among several developed countries.
The third part deals with the period since liberalisation of 1991. The author has done a scholarly analysis of the different dimensions of India’s higher growth based on consumption, global capital inflows and government and private investment in infrastructure factors. He has also highlighted the revolution in the IT and Telecom sectors and their contribution the economy.
More India-Latin America studies
Gonzalo’s book is an eye-opener for Latin American policy makers and academics to see India based on their own experience and perspectives. It would be good if it gets translated into Spanish and Portuguese to reach out to a larger audience. I hope this book would inspire more Indian books on Latin America and vice versa. India and Latin America, faced with many common developmental problems have much to exchange experience and learn from each other. For example, India could learn from Brazil’s success with the use of sugar cane ethanol as fuel and the country’s iconic firm Embraer which has become the third largest passenger aircraft manufacturer in the world. Latin America could get inspiration from India’s space research and IT success.
Gonzalo hopes that his book will help not only to a better understanding of India by Latin Americans but will also contribute towards the development of a common economics development research agenda oriented to the Global South. The Ukraine crisis has highlighted the need for a louder neutral voice of the Global South in these days of repolarisation of the world by US, Europe, China and Russia. The election of Lula in Brazil and India’s G-20 presidency are timely for the Global South to advance its own agenda.
The author is an expert in Latin American affairs