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Indian missions release guidelines for land buys in LatAm countries

With investors keen on acquiring land abroad for agriculture and mining, the government has taken the first step to smoothen land acquisitions in Latin American countries.

With investors keen on acquiring land abroad for agriculture and mining, the government has taken the first step to smoothen land acquisitions in Latin American countries. Indian missions in the region have posted a handbook detailing various aspects of land acquisition on their websites.

The handbook, prepared by industry body Assocham, provides information on various land policies and laws in 10 LatAm countries, including Brazil, Argentina, Costa Rica, Venezuela, Colombia, Peru, Panama, Ecudor and Trinidad & Tobago. The handbook has drawn on inputs provided by Indian ministries and the data collated from various missions and embassies located here.

Inviting investors to Costa Rica, minister of foreign trade Anabel Gonzalez told FE: ?Costa Rica offers interesting opportunities for Indian investors seeking to acquire property for agriculture and tourism projects. In fact, the government has a website which outlines the policies and laws for acquiring land in the country.?

Responding to a query on land acquisition laws in Colombia, Proexport Colombia Commercial Office director in New Delhi Augusto Castellanos said: ?According to the Institute for Management Development, Colombia ranks second in Latin America in providing adequate protection for private property. Both locals as well as foreign nationals have equal rights regarding real estate purchases. There are no additional taxes, legal or financial burdens on foreign investors for real estate transactions.?

The Indian government is planning to invest around $15 billion in farm upgradation over the next five years. Brazil, which has a mature agriculture sector and has the best performance indices for production per hectare, cost of harvesting and juice recovery percentage, molasses conversion rate and power generation or ethanol recovery, is in a good position to aid India.

Brazil?s trade with India has witnessed a tenfold rise in the last decade and is expected to reach $15 billion by 2015. According to Indo-Brazil Chamber of Commerce president Sanjiv Kumar Gupta: ?Though opportunities are immense from India’s perspective, Indian businesses must weigh many facts before jumping into land buys. It is not advisable to buy land as an investment, unless there is a project to be undertaken immediately. Also, an investor must also take into account the accessibility to ports from a pocket of land, as the region has irregular network and transportation costs are much higher than what Indian businesses are used to paying.?

Researchers say that land acquisition by foreign nationals or companies in LatAm is commonplace. Countries like Brazil and Argentina, which have 60 and 32 million hectares of arable land, respectively, are the most sought after by agro-businesses. Argentina and Brazil with urban population of 92% and 87%, respectively, surpass even the United States, which has a figure of 82%.

?Consequently, the acquisition of agricultural land will impact the broader population of Latin America less than that of rural, agriculture-dependent Africa. There are obvious monetary gains ? agri-business company Adecoagro recently sold its farmland in Brazil at 14 times of the $25 million it had paid for it in 2002,? observes researcher of Latin American Studies at Mumbai’s Gateway House: Indian Council on Global Relations Hari Seshasayee.

The region has extremely diverse resources, many of which have, as yet, been untapped. As a result, the mineral exploration industry has tremendous potential. Approximately 50% of the region is under forest cover and its seas contain rich marine life, the Assocham handbook says.

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First published on: 07-09-2012 at 02:35 IST
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