Delhi and Buenos Aires:The road to prosperity

Even as 30 countries confirmed their participation at the Brics summit in Kazan, Russia, one country made headlines for declining a formal invitation to join the grouping — Argentina. Argentine foreign minister Diana Mondino had said so much when she was visiting India between October 5-9. Mondino’s statement should not come as a surprise. Even before taking office as foreign minister in December 2023, Mondino had asserted that the incoming government would not join the Brics, and Argentina’s President Javier Milei made multiple remarks to the same effect. The reasoning behind the incumbent Argentine government’s decision is simple. Milei, a self-proclaimed libertarian, is more politically aligned with the United States (US) and Europe than a grouping which includes China and Russia.
That said, Mondino’s visit to India was not about the Brics. While Milei may seem more ideologically aligned to the West, India remains a valuable economic ally for Argentina. The India-Argentina relationship enjoys bipartisan support, regardless of which party is in power in either country — though it certainly helps when governments on both sides see eye-to-eye on many issues. Both countries have seen a spate of interactions at the levels of heads of government and through multilateral groupings like the G20. Still, the India-Argentina relationship is driven by economic diplomacy, where food and energy security form the main pillars of engagement.
An analysis of trade data from the past decade, from 2014 to 2023, shows that India is Argentina’s fifth largest export destination; excluding Argentina’s neighbours, the country exports more only to the US and China. India is, by far, Argentina’s largest export destination for soybean and sunflower oil, accounting for 42% of the country’s total exports of these products over the past decade. More recently, Argentina has increased its exports of gold, timber, leather, barley and legumes to India — albeit in small quantities. On the other hand, India exports mostly finished products to Argentina, such as motorcycles, diesel and agrochemicals. Perhaps more valuable is the Indian investment in Argentina, which includes tech companies like TCS, Infosys, and Mahindra Comviva, as well as automotive ones like Bajaj, TVS and Royal Enfield. The Indian pharmaceutical company Glenmark installed a 30,000 sq. ft.manufacturing unit in Buenos Aires in 2011 to produce two million vials of oncology injectables per year. More recently, Argentina’s health ministry has confirmed that Indian pharmaceutical products with European or American certifications can enter the Argentine market without any barriers. This move will likely boost pharmaceutical exports from India to Argentina while reducing the cost of public health care in the country.
While trade and investment form the base of the bilateral relationship, politicians and diplomats on both sides widen the fray by including elements of nuclear power, defence cooperation and, most recently, critical minerals like lithium. India’s government-owned KABIL has begun leasing five lithium blocks in Argentina’s Catamarca province, and Hindustan Aeronautics Limited will also be supplying helicopter spares and providing maintenance for Argentina’s Air Force. The engagement on critical minerals like lithium will expand in the coming years as India prepares to participate in the global lithium and battery value chains, assisted by the fact that Argentina remains home to about 15% of the world’s lithium reserves.
Despite these advances in bilateral ties, India and Argentina remain preoccupied by more consequential issues at home. Both countries share developmental challenges. While India’s developmental issues have historic roots, Argentina’s are more recent (in 1913, Argentina was richer than Germany or France). According to Argentina’s statistics agency, 52.9% of people in the country fall under the poverty line; inflation in September 2024 stood at 209%, and yearly inflation for 2024 is expected to slow marginally to 124%, still amongst the highest in the world. Milei faces considerable political challenges, in large part due to his party’s minority in both houses of parliament. Still, Milei’s plans are ambitious. Upon taking office, he devalued the Argentine peso by 50%, cut major subsidies and in an audacious step, cut the number of government ministries from 19 to nine. For example, four previous ministries — labour, education, culture and social development — were collapsed into the ministry of human capital.
Regardless of its domestic issues, Argentina will continue to chart its own path in engaging with India. As the Latin American saying goes, the road is built as you walk on it.
Hari Seshasayee is co-founder of Consilium Group and a visiting fellow at the Observer ResearchFoundation. The views expressed are personal