India’s Latin America moment: Building capacity in a volatile region

Latin America rarely feels urgent in Indian boardrooms—until a tender does. Argentina’s nascent LNG export push recently triggered what local headlines dubbed a “pipe war”: a consortium picked India’s Welspun to supply steel pipes for a roughly 500-kilometre pipeline linking Vaca Muerta’s shale gas to the Río Negro coast.

For Argentina, it became a bruising debate about local industry versus cost. For India, it is a marker: we are no longer only trading with Latin America. We are starting to build it.

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The region’s growth problem is not a lack of resources; it is a shortage of investable productivity. ECLAC estimates FDI into Latin America and the Caribbean rose to about US$189 billion in 2024, but cautions that the figure does not reflect a major surge in fresh greenfield projects.

The infrastructure gap remains the choke point: the IDB estimates the region must invest roughly 3.1% of GDP annually through 2030 across transport, energy, water, and telecom. The pipeline is vast—the real question is who can finance it and execute it credibly.

ECLAC’s own diagnosis is blunt: the uptick in inflows has been driven largely by transnationals already in-market—reinvesting profits—while “new money” has been comparatively less dynamic. That is precisely the opening for India: the region is not short of needs, it is short of dependable execution capital and long-horizon operators.

India’s opportunity lies in an asymmetry. China’s presence has often been associated with large, state-backed financing tied to strategic assets. India is more likely to arrive through globally competitive private firms—less geopolitically loud, often more flexible, and increasingly aligned with Western-facing supply chains. That can be attractive for governments looking to diversify partners.

In fact, the logic of this outward push was articulated long before today’s “de-risking” vocabulary. As Manmohan Singh put it in a business address two decades ago: “Indian firms are now part of global production chains—importing, sub-assembling, adding value and re-exporting.” Latin America is a natural next arena for that maturation, where Indian capital can move from market-seeking to capability-building.

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Money moves faster than policy, and emerging markets remain exposed to sudden shifts in global risk appetite. As economist Jayati Ghosh warned in 2021, “Once again, emerging markets are on the capital-flows roller coaster — one no less dizzying for being so familiar.”

That is the macro backdrop India must price in: FX volatility, rate shocks, regulatory turns, political cycles—and now the energy and shipping shock triggered by the war involving Iran, which has once again shown how quickly external conflict can reprice emerging-market risk.

Steel, seeds, IT and supply chains: India’s expanding presence in Latin America

Where is the Indian capital already scaling? Start with what India does best: code. Mexico has become a natural platform for Indian IT and business services serving North American clients in the nearshoring wave. The pattern is quiet but meaningful: delivery centres, regional offices, and local hiring—building managerial and technical ecosystems that outlast a single contract.

Then there is “the farm”—and the chemistry behind it. Agribusiness is Latin America’s comparative advantage and India’s strategic interest. Indian agrochemical champions have built deep operations in Brazil and beyond as core revenue engines, and this is where India can be more than a supplier—supporting productivity, yields, and resilience amid climate volatility.

Reuters reports UPL earns around 40% of its global revenue from Latin America and invests roughly US$100 million a year in Brazil, where it holds about a 10% market share.

Argentina is already central to India’s strategy. Through KABIL, India has moved from diplomacy to lithium exploration agreements in Catamarca—signalling New Delhi is willing to take upstream risk, not just buy processed inputs. Argentina, for its part, is signalling it welcomes big capital with investment incentives and an export-led pitch—lithium, gas, and a return to global markets. Welspun’s Vaca Muerta pipes order fits the same logic: export infrastructure and hard-currency earnings.

Peru is where the “India could take Chinese assets” question becomes concrete. Copper is the metal that electrifies everything at scale—grids, EVs, renewables, defense manufacturing. Indian groups have explored opportunities in Peru’s copper sector, including joint ventures and potential acquisitions, reflecting a strategic push to secure long-term supply. Unlike lithium, copper is a global knife-fight: valuations are high, projects are socially sensitive, and ESG execution is non-negotiable. And Peru’s scale explains the attention: Reuters points out that the country produced 2.7 million metric tons of copper in 2024 and drew nearly US$5 billion of foreign investment into the sector that year.

Chile, meanwhile, is where diplomacy becomes architecture. India’s push for deeper trade negotiations with Chile is the kind of framework companies need to scale beyond one-off wins—clearer rules for services, investment protections, and smoother pathways for minerals trade. Can India “take” Chinese assets in Latin America? Yes—but selectively. It works when host governments want diversification, when India can mobilise long-tenor finance, and when Indian operators can deliver with local value creation and credible ESG.

Speeches won’t define what comes next. More tenders, more lithium blocks, and more copper stakes will—and the real test is whether Indian capital can convert Latin America’s appetite for investment into durable capacity before politics and volatility intervene. If it can, Vaca Muerta’s pipes won’t just carry gas; they’ll signal that India has arrived as a long-term builder.