Gino Demeneghi
Business Center Director
Mexico Pavilion at the World Expo Dubai 2020
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Expert Contributor

The Great Economic Duo: India and Mexico

By Gino Demeneghi | Mon, 06/27/2022 - 13:00

When we talk about India, a population of 1.3 billion comes to mind, along with the growing Bollywood film industry, one of the world’s seven wonders the Taj Mahal lavish weddings that last for days and many other very particular details of that latitude.

But let's look at some important economic data that demonstrates the country is one of the world’s economic leaders, has balanced macroeconomic figures that are generating an economy that is growing quickly and with great prospects for the future. In 2020, gross domestic product was US$2.623 trillion. GDP per capita was US$1,900.71 and its GDP growth rate posted a COVID-hit contraction of 8.0 percent annually. 

Its demographics, its natural resources and the well-known entrepreneurial spirit of its citizens are some of the factors that influence this situation.

On the other hand, if we talk about similarities with Mexico, perhaps the taste for spicy food, colorful outfits and the tendency to emigrate would come to mind. However, India is more similar to Mexico than we can imagine. We have a lot in common and an economic potential with a great future between both countries, which was confirmed by the visit in March by Mexican Foreign Minister Marcelo Ebrard and a group of officials and businessmen to the Republic of India.

Ebrard led a high-level Mexican delegation in which authorities from the health sector, representatives of educational institutions and businessmen participated. Within the framework of this tour, Mexico and India agreed to add a strategic nature to their bilateral relationship and strengthen their collaboration in the areas of trade, health and technological innovation. A timetable was established for the transfer of technology to the Mexican health sector for the manufacture of medicines and vaccines in our country, and the minister announced the forthcoming opening of a consulate in Mumbai.

Following this visit, in the first two weeks of April, we had the opportunity to follow up on Ebrard's visit to India, we held meetings that allowed us to learn more about the great opportunity that the Indian market represents for Mexico and vice versa.

With this knowledge, I would dare to place India as one of the priority markets for the internationalization of Mexican companies. Some priority sectors would be:

Infrastructure: construction and maintenance. There is a great opportunity to actively participate in the development of communication routes in the country and housing projects.

Energy: Energy technology, both in renewables and in the gas sector. India highlights a future of technological application in the energy sector and the great demand offers opportunities worth evaluating.

Food: Agriculture, aquaculture and organic farming, biotechnology, as well as a food and seafood processing industry. With a population of 1.3 billion, it is the second-most populous country in the world only behind the Republic of China. Agriculture, processed foods and, particularly, vegetables due to the great vegetarian tendency of its population open a range of opportunities for Mexico in the food export sector.

Machinery: mechanical tools, auto parts, machinery, biodegradable plastics. Their industry is large and growing and they are looking for more and more. Mexico can be a great ally to export machinery and services to India.

Water management: water-saving and purification technology and urban waste management are topics of global interest that allow companies specializing in the field to find great opportunities in the Indian market.

Information technologies: application, development and integration of new technologies. India's affinity with technology is recognized worldwide. It allows us to acquire applied technology as well as transfer it, develop alongside the best in the world at a more competitive price than in the US.

Telecommunications: India is the third-largest in the world and one of the fastest-growing telecommunications markets in the world.

Pharmaceuticals: the transfer of technology to the Mexican health sector for the manufacture of medicines and vaccines in our country. This was very evident during Ebrard’s visit to India.

The film industry: Bollywood, the most important film industry in the world, produces many more films than Hollywood per year, totaling more than 1,000 films a year2 compared to about 500 that are made in Hollywood. That is, between 80 and 90 releases each month. It has a lot to show Mexico but we also have spectacular locations to offer as well as exchanges for students and professionals in the field.

Service industry: in India, the service sector as a whole contributed 68.6 percent to global average GDP growth.

Tourism: with India's growing appetite for travel and one of the best travel budgets, Mexico has much to gain from promoting the country's tourism to the Hindu community. Our destinations are also an excellent option for attracting the already famous "Hindu weddings," in which large budgets are invested and would allow gatherings not only from India, but from the United States and Canada. The subject is very specialized but those who exploit it will be amply rewarded.

India's natural resources are minerals (iron, manganese, coal, mica, titanium, chromite, bauxite, limestone, thorium), arable land, fisheries and renewable energy. Its agricultural production is rice, wheat, oil seeds, cotton, jute, tea, sugar cane, milk, potatoes, cattle and poultry. While its main industries are textiles, chemicals, processed foods, steel, pharmaceuticals, transportation equipment, cement, mining, machinery, software, and cinematography.

In 2018, Mexico was India's main trading partner in Latin America, ahead of Brazil. Trade relations between the two countries have increased by 240 percent in the last 10 years. Exports from Mexico to India are around US$5 billion.

India is a polychronic culture; words are less important and context is more important; legal documents are slow processes; the word is decisive, which means negotiations take more time. Social position is definitely a factor to consider. Punctuality is not part of their culture; delays can be expected. Personally, I recommend being cautious, do not do business without investigating who you are dealing with. Previous due diligence is recommended. However, India is a great destination for doing business, a destination that I highly recommend.

India today offers Mexico the opportunity to generate a commercial duo that could be key to the industry of our country; its consolidation of a middle class with greater purchasing power is a reality. In addition, India has a young population, more than 40 percent of whom are under 35 years of age, and they are eager to live the global experience.

Photo by:   Gino Demeneghi