Economic Scenario of Guatemala:
Guatemala is the most populous Central American country and has a GDP per capita roughly half the average for Latin America and the Caribbean. The agricultural sector accounts for 13.5% of GDP and 31% of the labor force. Guatemala's economy is dominated by the private sector, which generates about 85% of GDP. The GDP (PPP) of Guatemala is estimated at US$ 138.1 billion in 2017 compared to US$ 134.4 billion in 2016. Most of its manufacturing is light assembly and food processing, geared to the domestic, U.S., and Central American markets. Guatemala is not only a country with wide cultural diversity, beautiful landscapes, and a highly developed capital city, it is also an excellent destination for investments in a wide variety of industries. Guatemala is the economic hub of Central America and meeting point for business thanks to competitive advantages such as geographic location, rich natural resources, quality of the workforce and high logistical performance, Guatemala has a solid infrastructure and increasing technological avidity, positioning itself as the metropolis of the region. Since 2003, the country shows a 375.6% growth in Foreign Direct Investment (FDI), which shows the strength of its economy and the confidence of large foreign and multinational companies.
India-Guatemala Economic Relation:
India and Guatemala enjoy cordial and friendly relations. The countries established diplomatic relations with each other in the 1970s, and have decided to open resident missions in the other country. An agreement for visa exemption for diplomatic and official passport holders was signed in 2015.
Besides, following the India-SICA Foreign Ministers' meeting that includes Guatemala, India announced enhanced Line of Credit facility to each SICA country from the US $ 10 million to the US $ 30 million in 2015 and agreed to share its experience to meet challenges of food security and energy security with SICA member countries. India also offered cooperation and assistance in priority areas such as agriculture, SMEs, pharmaceuticals, tourism, IT related activities, renewable energy, plantation, disaster management, distant education and supply of satellite imagery for development purposes, etc.
Both the countries have pushed the “complementary” relationship to a new high taking advantage of the emerging opportunities in both countries. India is keen about enhancing its engagement with Latin America and looks at Guatemala, the most populous and biggest economy in Central America, as the gateway.
India & Guatemala : Bilateral trade and product specific trend:
Guatemala is one of India’s top 100 trading partners globally and India is the eleventh largest import partner for Guatemala during 2017.(Source: Trade Map). India’s total trade with Guatemala increased from US$ 225.5million in 2013-14 to US$ 307.9 in 2017-18 at a CAGR of 8.1%. As per latest statistics, bilateral trade during April-January 2018-19 stood at US$ 1.88 billion enjoying a trade balance of US$ 1.7 billion during the said period. Trade is significantly biased in favour of India. India’s engineering exports to Guatemala stood at US$ 139.5 million in 2017-18 compared to US$ 104.86 million in 2016-17 registering a growth of 33%. At present it accounts over 4% of India’s engineering export to Latin America. Currently India’s total engineering exports with Guatemala during April-February 2018-19 recorded at US$ 111.53 million as against US$ 126.1million registering a negative cumulative growth of 11.6% compared to same period last fiscal and accounting for over 4% of India’s engineering exports to Latin America.
Engineering products like Two and three wheelers, Motor vehicles/cars, Auto Components and parts, Iron and Steel, Industrial machinery and parts, Electrical machinery and equipment are the top products exported to Guatemala while India mainly imports Wood & articles thereof, wood charcoal, Sugar and Sugar confectionery, Coffee, Cardamom and Aluminium & articles thereof from Guatemala.
Guatemala’s industry sectors primarily include food processing, publishing, mining and the manufacture of textiles, clothing, cement, tires, pharmaceuticals and manufacturing industry.
Opportunities for Indian Exporters at Guatemala:
India’s engineering exports to Guatemala is miniscule with a share of less than 1 percent of its global engineering exports. Indian engineering has achieved remarkable success globally over the years while Guatemala is one of the rising metropolis in the entire Central America with a capacity of going forward. Bilateral enhancement of trade and investment will bolster their relation further in the coming years. Exchange of ideas on promoting Indian engineering products and increasing the visibility of Brand India in Guatemala, El Salvador & Honduras is the need of the hour.
EEPC India have organized several fairs and exhibition in several Latin American countries, and also organized seminar on business opportunities with Latin American countries focusing on trade and investment. EEPC India also had high level interaction with the Ambassador of India to Guatemala, Honduras & El Salvador where it was highlighted that a field delegation on market study based should be proposed. The business delegations of Guatemala were invited to take part in Indian engineering show. There was a proposal to construct a warehouse facility in the region to enhance trade between India and this region. Therefore, trade in all possibilities is likely to grow further if adequate focus and measures are taken.