Indian and Chinese Engagement in Latin America and the Caribbean: A Comparative Assessment

• In Event: India and Latin America

Abstract

This paper makes a comparative assessment of activities of the governments and companies of the Republic of India, and the People’s Republic of China (PRC) in Latin America and the Caribbean It examines the content and country focus of high-level diplomacy for each of the two actors, as well as the volume and patterns of trade, the activities of Indian and Chinese companies in the region, and their relationship to their respective governments there in eight sectors: (1) petroleum and mining, (2) agriculture, (3) construction, (4) manufacturing and retail, (5) finance, (6) logistics and port operations, (7) telecommunications, space and high technology, and (8) military systems. It finds that trade with, loans to, and investment in Latin America and the Caribbean by India is significantly less than that of the PRC, and concentrated on a more limited subset of countries and sectors. Moreover the Indian government has not been as proactive as the PRC in providing coordinated support to its companies and financial institutions. Yet India possesses a number of structural advantages over the PRC that could facilitate the expansion of its position in the region in the future: (1) a structure of engagement that is less “threatening” than that of the PRC, with less competition from Indian than Chinese products in low-end manufactured products in the region, greater concentration of Indian investments in the region on high-value added technology and service sectors, and the perception that the PRC (not India) is the principal challenger to the Western-dominated global order. (2) at the corporate level, the tendency of Indian firms to employ relatively more local labor and management, and to relate more effectively than Chinese counterparts with local communities, labor forces, and interest groups.

Author

• Robert Evan Ellis, US Army War College Strategic Studies Institute