It looks like a silver lining for the Indian textile industry, which is one of the worst hit sectors by the global financial crisis.
Argentina is eyeing investments into India’s textile industry and 34 Indian companies received orders at the recently concluded exhibition and buyer and seller meet in Buenos Aires.
Indian ambassador to Argentina, Uruguay and Paraguay, R Viswanathan, told FE that, “
Everyone is concerned about the international financial downturn. There is lack of credit, liquidity has decreased. A textile delegation of 34 companies sponsored by all the textile promotion councils of India, which was recently in that country, received orders from the Argentine companies. Our textile exports in 2008 were $90 million dollars, but we are hoping to increase it to $300 million in the next three years.”
Since the companies need innovative strategies to reduce the costs of production and be more competitive, as part of this new strategy, the Argentine textile industry expressed keenness to explore partnership with the Indian textile industry, explained Viswanathan.
According to the envoy, during the buyer-seller meet at the end of April, the businessmen from the Argentine textile industry took the opportunity to explore possibilities of imports, exports and collaborations to succeed in the argentine market, the gigantic Indian market, and also in the global markets.
India’s exports to Argentina have gone up by 28%in 2008—$492 million in 2008—from $384 million in 2007. India’s imports from Argentina in 2008 were $836 million as against $859 million in 2007, he said.
Argentina is the third largest market of Latin America after Brazil and Mexico and is well integrated in Mercosur. And there is a good potential of cooperation between India and
Argentina in the manufacturing sectors.
Argentina’s industrial production includes automobiles, steel, aluminum, paper, sugar, PVC and polyethylene in which India also has strong manufacturing base and technological capabilities.
Exports to Argentina constitute only 0.18% of India’s total exports; while imports from Argentina constitute 0.36% of India’s total imports.
Preferential Trade Agreement (PTA) with Mercosur, of which Argentina is a member, which will come into force on June 1, is expected to facilitate greater market access of Indian products in Argentina.
Besides exports, there is good scope for Indian investment in Argentina in sectors such as petroleum, mining, manufacturing, information technology, agriculture, forestry, etc.
According to Ficci officials, Indian companies are acquiring companies in Argentina and also setting up manufacturing bases there to create greater market.
Currently, there is ten Indian companies, which have established operations in Argentina. They provide employment to about 1300 Argentines. Six of them are in IT, two in agro-chemicals, one in pharma and one in mining, officials added.
In pharma sector, Argentine regulatory agency currently does not allow import of finished formulations of pharmaceuticals from India.
A few Argentine companies have also set up operations in India in the engineering and pharma sectors.
Weaving opportunities
• 34 Indian companies received orders at the recently concluded exhibition and buyer and seller meet in Buenos Aires India's textile exports in 2008 were $90 million dollars
• India’s exports to Argentina have gone up by 28%in 2008—$492 million in 2008—from $384 million in 2007
• India’s imports from Argentina in 2008 were $836 million as against $859 million in 2007, he said
• Argentina is the third largest market of Latin America after Brazil and Mexico and is well integrated in Mercosur
• Preferential trade agreement with Mercosur, of which Argentina is a member, which will come into force on June 1, is expected to facilitate greater market access of Indian products in Argentina
• Currently, there are ten Indian companies, which have established operations in Argentina.
