Chile and India: The relevance of being the first mover

Machine translation of the original guest column, written in Spanish

By Loreto Leyton, executive director of Fundación Chilena del Pacífico, an organization in charge of supporting Chile's economic insertion in the Pacific basin.

With an increasingly dynamic and diversified economy that has been growing at a rate close to 6% annually for two decades (7.6% in 2023, and is projected at 7% for this year, according to the ADB) and a GDP At more than US$3.5 trillion (billion, fifth in the world), India offers great opportunities for our exports. In the context of a declining global economic situation and rising geopolitical tensions that trigger the risks of economic fragmentation, it is strategic that we diversify markets and India is one of the most attractive.

Chile has a strategy focused on India more than any other country in Latin America, which positions us as a first mover . So much so that, as of the first quarter of 2024, that country represented the sixth largest market for our exports. We need to consolidate ourselves as first mover. For example, being the first to fully enter the retail market, where we are presented with a tremendous opportunity if we consider that the growth rate of Indian consumption is around 20% annually (today Falabella has operations in Bangalore, but rather back office ). This extends to agricultural products. Today, Chile is among the three main suppliers of nuts, apples, pears, kiwis and cherries, which can grow if we consider that nuts, fresh fruits, prepared foods and dairy products are among the imports that grow the most in India . Although we are the number one supplier of copper, molybdenum and iodine, no concrete steps have yet been taken regarding lithium. Like other countries, India will need to supply lithium and it will be important to position itself as its main supplier over other alternatives. The privileged status we have today as first mover will not last much longer.

The moment to expand trade with India is good because that country is progressively opening up to the world thanks to a more assertive trade policy and investment attraction. It is one of the great beneficiaries of the relocations of global supply chains and in the last decade alone it has signed 14 FTAs, all very different in nature and scope. In this context, the efforts to deepen the current Partial Scope Agreement between India and Chile, something that no other country in the region has, is a decision with strategic sense that helps the “Chile brand” continue to gain space and recognition among the Indians. Hand in hand with an emerging middle class of more than 220 million people looking for new experiences and products, we are facing a unique opportunity. If we manage to penetrate that market, even by just 1%, for any product, the impact would be enormous.

A new and attractive option has opened to insert our exportable offer in Asia. The government has understood this and an official visit by President Boric is already planned this year, as well as the holding of a ChileWeek. India can occupy the same space that China began to occupy more than a decade ago. It is essential to consolidate ourselves as “ first mover ”.

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