Indian investors prefer Mexico, a study reveals

MEXICO happened to be the largest recipient of Indian investment inflows in the Latin America and Caribbean (LAC) region, followed by Brazil, Peru, Uruguay, and Chile.

This was revealed in the EXIM Bank’s study analysing the current investment scenario in the LAC region and the opportunities that the region presents for Indian businesses. The study highlights the regions significant economic progress in the last few decades and the continued implementation of reforms which have improved the prospects of doing business in the region.

Among the sectors, communications remained the biggest capital investment attracting sector followed by alternative and renewable energy, metals, coal, oil and natural gas; and paper, printing, and packaging. Also, the top investors in the LAC region are dominated by developed countries, with the recent emergence of Asian countries like China, and India.

The LAC region is considered as one of the top investment destinations in the world due to its growing industrial and manufacturing strength, and continuous improvements in the ease of doing business parameters. As a result, the FDI inflows into the LAC region have grown by 22 percent to reach US$ 142 billion in 2016 from US$ 117 billion in 2007.

The study identifies that during the period April 2011 to November 2017, India’s overseas foreign direct investment (OFDI) to LAC region cumulatively stood at US$ 14.9 billion, and the sectoral composition of these investments have been tilted towards agriculture and mining sector, followed by the manufacturing sector. The Indian investments are concentrated in a few LAC countries like the British Virgin Islands, Cayman Islands, Panama, Bermuda, Brazil, the Bahamas, Chile, Mexico, and Colombia. The study suggests that Indian investors could seek out other potential countries in the region to diversify their investment portfolios, in line with the potential identified.

The investment promotion agencies of the countries in the LAC region have put forward their priority sectors, taking into account the capability of each country. Considering the natural resources and other technological advancements that the region possesses, a majority of the countries have identified the following areas as potential investment sectors viz. agribusiness, power and renewable energy, IT-enabled services, manufacturing, tourism and mining, among others.

The study analyses the potential for Indian investments in the LAC region and finds out that essentially, the sectors like communications, automotive, alternative/ renewable energy, metals, business services, financial services, food and tobacco, and hydrocarbons, among others, present opportunities for the Indian investors for enhancing investments in the LAC region.


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