By R. Viswanathan - Yes… steady is the word to describe the growth of India's trade with Mexico, the second largest market of Latin America. The bilateral trade reached 6.29 billion dollars in 2012 from 4.15bn in 2011, 2.9bn in 2008 and 1.03bn in 2003.
India's exports were 2.95 billion dollars in 2012 increasing by 24% from 2.38bn in 2011. Engineering products topped the list of export items of India as usual. Exports of vehicles and parts were 466 million dollars followed by diesel- 439m, organic chemicals 306m, electrical and sound equipments290m, equipments and machinery 211m and garments 150m.
Crude oil imports in 2012 were 2.83 billion dollars (accounting for 88% of India's imports from Mexico) followed by electrical machinery and equipments, 242 m.
India was the eighth largest export destination of Mexico in 2012. Reliance was the importer of Mexican crude oil, as in the past several years.
Although Brazil is the largest market of Latin America, Mexico is the trade leader in the region. Mexico's trade in 2012 was 741 billion dollars while Brazl's trade was 408 billion.
Eighty percent of Mexico's exports go to US and Canada, with which Mexico is bound in NAFTA. Surprisingly the US accounted for only 49% of Mexico's imports. Mexico had a trade surplus of 89 billion dollars with US in 2012.
Mexico had a massive trade imbalance with China in 2012 as usual. Mexican exports to China in 2012 were just 5.7bn dollars while their imports were 57bn.
Mexico's macroeconomic fundamentals are strong with healthy indicators such as 3.57% of inflation, interest rate of 4.5%, current account surplus and ample forex reserves. GDP growth in 2012 was 3.8% and it is expected to go up in 2013.
The manufacturing sector is growing with a new vibrancy after having overcome the Chinese competition. Many American and foreign companies have started production of manufactured goods in Mexico for the markets of US and Canada. Mexico has become the fourth largest exporter of cars in the world after Germany, Japan and South Korea.
The taking office of Enrique Peña Nieto, the young, dynamic and visionary leader as the new President of Mexico augurs well for accelerated economic growth and prosperity. He has already implemented some reforms, which were considered as politically impossible even last year. He has shown courage and diplomacy to work with the opposition parties to bring about the reforms needed by the country.
Given the positive prospects of Mexico in the coming years, India's trade with Mexico could reach 10 billion dollars by 2015.