MEXICONOW Staff Report
India-Mexico relations have consistently been friendly, warm and cordial, characterized by mutual understanding and growing bilateral trade and all-round cooperation. Antipodes as they are on the globe, they have striking similarities and commonalities of geography, history, physiognomy, culture and civilization, even of attitudes, mindsets and values of the people.
Both countries are large emerging economies, with similar socio-economic development priorities and constraints, and have democratic, secular, and pluralistic systems, as well as convergent worldviews. Both are at somewhat comparable levels of economic and technological development, and are members of the important G-20, Mexico graduated from G-77 to joining OECD in 1994, and also joined NAFTA in 1995. Mexico was the first Latin American country to recognize India after her independence, and both established diplomatic relations in 1950.
Impelled by their commonalities, convergence of worldviews, and an issues-free relationship, India and Mexico have collaborated together closely on most major global issues, such as nuclear disarmament, climate change, trade, and global economic architecture.
They elevated their ties to ‘Privileged Partnership’ during President Calderon’s state visit to India in 2007. The two countries have exchanged as many as 11 visits at the level of Head of State or Government, the last bilateral visit being former President Pratibha Patil’s in 2008. Prime Minister Manmohan Singh attended the G20 Summit hosted by Mexico in Los Cabos on 18-19 June 2012.
Their regular and high-level bilateral interactive mechanisms include a Joint Commission that last met in April, a High Level Group on Trade, Investment and Economic Cooperation, Foreign Office Consultations, and an array of bilateral agreements including for investment promotion and protection, double taxation avoidance, extradition, air services, and for cooperation in several sectors.
India – Mexico Business Chamber (IMBC) was formally launched in Mexico by Foreign Minister Dr. Luis Ernesto Derbez on 27 October 2006 with the objective to play a vital, catalytic role towards full realization of the potential of bilateral trade and economic relations through enhanced business-to-business contacts and interaction with the concerned governmental authorities.
A delegation from IMBC accompanied the Mexican Economy Minister to India in May 2007. IMBC was also instrumental, in coordination with ProMexico (The Mexican promotional agency), in organizing a large business delegation from Mexico to India that accompanied the President of Mexico to India in September 2007, and coordinated the meetings of the CII delegation that accompanied the President of India on her visit to Mexico in April 2008. IMBC has been expanding fast and opened a chapter in Guadalajara.Exhibit 1
summarizes the Trade Balance between Mexico and India. It shows that commerce between the two countries reached its maximum level in the year 2013 (US$6.6 billion). This certainly reflects the excellent moment that the bilateral relation is now having. The bilateral commerce has experienced many ups and downs, leaving Mexico for many years with a negative trade balance. In the years 2008, 2012 and 2013 that trend has been reversed.
Several important factors in the trade balance between Mexico and India are revealing. Take, for instance, the fact that during the 13 year time span from January 1999 to December 2013, total exports from Mexico to India increased from US$19.7 million to US$3.8 billion. And at the same time, imports from India to Mexico also showed an impressive growth from US$232 million (1999) to US$2.9 billion (2013). These are impressive rates of growth in international trade.
Total commerce between the two countries and reciprocal action brought in US$6.7billion during 2013 in trade between the two partners and has consistently shown important improvements. This has been especially true of the period since 2007. This was when, for the first time, that total commerce “stats” were available identifying the US$2 billion. And another interesting detail is that in 2013 there was an increase of 6% in commerce (US$6.7 billion) in comparison with (US$6.3 billion) in 2012.Exhibit 2
shows India Investment in Mexico. During the period from January 2000 through June 2014, companies with capital from India invested US$76 million.
According to the Ministry of the Economy, since 1999 there has been 169 Companies from India investing capital in Mexico.
Most of the leading Indian companies in IT/software (TCS, Infosys, Wipro, NIIT, BirlaSoft, HCL, Aptech, Hexaware, Patni, etc.) and pharmaceutical (Claris Life Sciences, Wockhardt, Sun Pharma, Dr. Reddy’s Laboratories, Torrent Pharmaceuticals, etc.) sectors have set up joint ventures in Mexico taking advantage of its strategic location, large market and investment friendly policies.
TCS Mexico started its operations in the city of Mexico in 2003. It has rendered advanced and specialized IT services, consulting, testing, software development, Business Processes Outsourcing (BPO), contact center, IT infrastructure solutions, industrial and engineering services and solutions based on TCS exclusive products for current and prospective clients. Operations are currently carried out in three modern centers.
The oldest is the Guadalajara center which opened in 2007. Another one is in Monterrey, and the third one is in the city of Querétaro, which were opened in 2007 and 2009, respectively. Mexico is one of the most important links for the expansion strategy of TCS in the region for many reasons, such as the closeness in distance and time zone to the United States and political and economic stability, as well as the high academic level of graduate professionals.
JK Tyre – one of the leading tire manufacturers in India that provides tyres with an array of products including car/bus/truck tires and bias/radial tires acquired the Mexican Tornel for US$67 million back in 2008.
Torrent Pharma, the flagship company of Torrent Group, is ranked amongst the top pharma companies of India. It is a dominant player in the therapeutic areas of cardiovascular (CV) and central nervous system (CNS) and has achieved significant presence in gastro-intestinal, diabetology, anti-infective and pain management segments. Torrent Pharma has a strong international presence spanning over 70 countries across five continents with over 1200 product registrations. It has wholly owned subsidiaries in USA, UK, Germany, Brazil, Russia, Philippines, Australia and other major markets including Mexico.
Patni Computer Systems is a leading global IT and BPO services provider and has established a state-of-the-art IT business Centre in Queretaro, Mexico, that helped to expand Patni’s global delivery initiative and serve as the hub of the company’s expansion efforts in Latin American markets.
Mexico-India Bilateral Agreements:
- Cultural Agreement (1975)
- Agreement for Cooperation in Science &Technology (1975)
- Cultural Exchange Programme (2005)
- Educational Exchange Programme (2005)
- Agreement on Visa Exemption on Diplomatic & Official Passports(2005)
- Memorandum of Understanding on Cooperation in SMEs (2006)
- Extradition Treaty (2007)
- Mutual Legal Assistance Treaty in Criminal Matters (2007)
- Double Taxation Avoidance Agreement (2007)
- Bilateral Investment Promotion and Protection Agreement (2007)
- Air Services Agreement (2008)
- MOU on Cooperation in the Field of New and Renewable Energy (2008)