India, the other Asian giant

India is offered as a vast market, with opportunities and threats for Argentine exports. A brief review of Argentina-India bilateral trade. Soybean oil and its fundamental importance.

“If we reduced the world population to 100 people, 17 would live in India. The Republic of India is the second most populous country in the world, with more than 1,331 million people in 2020 (only behind China, with about 1,400 million inhabitants) ”, highlights the latest report from the Rosario Stock Exchange . According to World Bank projections, by 2021 it would be the third largest economy in the world, with a GDP of around 10 trillion dollars (measured at PPP values).

Despite maintaining a significant distance from the world’s two largest economies, China (with a GDP of 26 trillion dollars) and the United States (22 trillion dollars), it comfortably surpasses the economies that follow. In this sense, Japan and Germany have GDPs of 5.5 and 4.7 trillion dollars, occupying the 4th and 5th place, respectively.

Not satisfied with this, India is an emerging power, with its growth rate that has far exceeded the economic expansion of the United States, the European Union and Latin America. Its average growth is only surpassed by China, which since 2008 has been showing a slowdown in its economic expansion. There is one of the great assets of the Indian economy: its dynamism in the short and long term. «After a pandemic that has wreaked havoc on the population of the Asian country, in 2021 India expects to grow by 12.5%, above the 8.4% of China, which would make it the country with the highest economic growth in the world. year “, clarify the specialists.

An acceleration of economic growth would more than exploit the potential of the Indian economy. GDP per capita in 2020 was just US $ 6,454. To give a comparative dimension, the GDP per capita of our country was US $ 20,767, more than three times that of India (according to the World Bank, measured in PPP). For its part, China’s GDP per capita is around US $ 17,311.

In India, today more than 300 million people survive on less than US $ 1.9 / day, and about 21% of the population is below the poverty line, according to the World Bank. In this sense, the acceleration of the growth of its economy with the consequent improvement in the consumption levels of the population is likely to diametrically improve the levels of international demand, an excellent opportunity to expand the foreign market for Argentine agro-industrial goods.

Likewise, it is necessary to highlight the potential of this Asian giant in its population. 28% of the world’s youth live in India. More than half of the population is under 25 years of age, and more than 65% are under 35 years of age. However, about 70% of the total population lives in the countryside and does not have basic services, which reduces their quality and life expectancy.

How much does India harvest of wheat, corn and soybeans?

This Asian giant is self-sufficient in wheat, with a planted area that is more than four times the Argentine area. For this 2021/22 season, it expects to have a productive yield of around 3.38 tons / hectare, which will allow it to have a production of more than 108 Mt, more than enough to supply its internal consumption of 105 Mt and export a large part of the surplus. .

Regarding the yellow grain, India is also self-sufficient with corn. With a production of around 30 Mt, the high domestic consumption allows slight exports of around 2 Mt.

With regard to soybeans, the Asian giant expects to produce more than 11.2 Mt in this new season. In addition, a production of almost 8 Mt of soybean meal is projected, of which 1.7 Mt are expected to be exported.

However, the requirements were recently relaxed and the importation of genetically modified bean-based soybean meal to India will be allowed. Thus, it is expected to decompress the prices of the domestic market, which have increased considerably, at the same time that it seeks to supply inputs to the poultry sector. With projections of imports for 1.2 Mt, for now suppliers are being sought in Bangladesh, Vietnam and other countries of the ASEAN bloc. In the short term, Brazil and Argentina are discarded in view of their high logistics costs to India. In addition, India is a net importer of soybean oil, a product that crosses the Argentine prospects for the Indian market.

The Argentina-India bilateral relationship

Argentina opened a consulate general in Calcutta in 1920, more than a century ago, prior to the independence of India. With the Independence of our commercial partner (in 1947), by 1950 the Argentine embassy in India was created. A long way has been traveled in the bilateral relationship since then.

In October 2020, the India-Argentina Business Council (IABC) was created, under the auspices of both embassies. The Indian market offers vast opportunities. A few weeks ago the first yerba mate export to India was completed.

In the first seven months of 2021, Argentina had a trade surplus of US $ 8,310 million, 16% of which is explained by the bilateral surplus that our country has with India. Structurally, more than 90% of Argentine exports to India are made up of soybean oil, with the Asian giant being the importer of 30% of the soybean oil that is marketed worldwide, considering an average of the last 3 seasons.

India recently confirmed a reduction in effective import tariffs on some vegetable oils. It was reduced from 38.5% to 30.25% for crude soybean and sunflower oil, equaling them with that in force for palm oil, in order to limit the rise in prices that has occurred since the beginning of the pandemic . This measure has been effective since August 20, 2021, but its validity would fall at the end of September. CIARA-CEC asked the government of India that the measure be valid for at least one year, a request that was reaffirmed by Daniel Nasini, president of this Exchange, during the visit to Rosario made by Dinesh Bhatia, the Ambassador of India against Argentina.

Despite the bilateral trade surplus that our country enjoys with India, it should be noted that India’s exports to our country are much more diversified. With a wide variety of products, Argentina imports agricultural machinery, chemical industry products and fuels from India, among other products.

India and Argentina in the world soybean oil market

Argentina exported soybean oil to India for more than US $ 2,000 million in 2020 alone, and in 7 months of 2021 it has exported close to US $ 1,746 million. The average of the last 5 years shows exports of US $ 1,762 million.

For this 2021/22 business year, India is estimated to import 3.72 million tonnes of soybean oil, a slight uptick from 3.70 a year earlier, according to the USDA. With this data, India will import more than 67% of the soybean oil that it is expected to consume.
The bulk of world soybean oil production is spread over four countries. China, the United States, Brazil and Argentina concentrate more than 75% of the total oil production.

World soybean oil production can be estimated to exceed US $ 70 billion for the 2021/22 season. However, of the almost 62 Mt expected to be produced in the coming season, only 20% will be exported. The first three oil producers are demographic giants, with only Argentina being a country with a considerable exportable balance for world trade.

India is the world’s leading importer of vegetable oils, while Argentina is the world’s leading supplier of soybean oil. Their complementarity is essential, and for this reason bilateral relations have recently moved to a strategic level, with priority of Strategic Association according to the Ministry of Foreign Affairs since 2019.

The Republic of India is a fundamental partner of Argentina in this market, being the destination of more than 48% of the soybean oil that is exported from our country, taking an average of the last five years. Other destinations of relevance for Argentine oil are Bangladesh, China and Egypt, although considerably to a lesser extent.

On August 9, 2021, Prime Minister Narendra Modi launched a plan that seeks to boost the production of soybean oil from India, seeking to make the country self-sufficient in vegetable oils. With an investment plan for more than US $ 1,500 million, it will also seek to improve the quality of seeds and the modernization of agriculture. With this vision, they will seek to encourage a greater cultivation of oilseeds in reduction of cereals.

However, in view of the low exportable balance of cereals in relation to total production, it should be closely monitored to analyze whether self-sufficiency in wheat and other cereals is indeed being abandoned in order to seek potential self-sufficiency in vegetable oils.


India is emerging as an emerging power, gradually returning to its growth rate. A high demand for skilled labor combined with a robust private sector, as well as promotion and efficiency policies in the public sector, stand out as great strengths. However, there is still a deeper modernization of the national infrastructure, as well as a series of rigidities in various markets of the Indian economy. With an expectation of growing comfortably above China, various analysts discuss the medium and long-term prospects for this Asian giant, which has come to play a leading role in the global panorama in the coming years.

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