Mexico is the main Latin American destination for Indian investments and, in turn, the largest Latin American investor in India. And, both countries say they want to build on this relationship. ?In response to the growing demands of our bilateral relations, we have been trying to put in place and intensify existing cooperation programmes in every area of bilateral action: political, cultural, economic, and consular,? Jaime Nualart, ambassador of Mexico to India, told FE.
In the commercial and trade areas alone, there are 10 bilateral agreements in place between the two countries, ranging from reciprocal investment protection, avoidance of double taxation, customs cooperation, telecom, and SME promotion. Nualart said: ?Trade between our countries has been growing exponentially in the recent years, and this has spurred a great interest from both sides to come together. Although Mexico mostly exports crude oil to India, our country’s main exports are manufactured goods, which account for 80 % of our total global export capacity.”
Bilateral trade and investment have grown rapidly between the regions, ranging from automotive, IT and energy to entertainment. In 2011, trade reached $3.2 billion, with India exporting around $2 billion million and absorbing $1.2 billion in imports from Mexico. “Investment is expected to reach a combined $10 billion by 2015, and, by 2017, we will quite certainly be exchanging over $10 billion. Back in 2000, bilateral trade had not reach $400 million. Since then, it has grown over 10 times,? Nualart said. To further strengthen relations between the two countries, President Pranab Mukherjee recently congratulated Enrique Pe?a Nieto on his taking over as president of Mexico, and invited him to visit India.
?Mexico is the main destination of Indian investments in Latin America due to the 12 FTAs that we have signed with 44 countries as well as our vicinity with the US and preferential access to this market as a NAFTA country. There are currently 25 Indian companies operating in Mexico today. It is also worth noting that Mexican investors, among all Latin American investors, are the most active in India.?
There are currently 13 Mexican companies present in India, in sectors as varied as entertainment, manufacturing of auto parts, construction, electric converters and generators, foods and beverages. In the entertainment sector, Cinepolis of Mexico started its first multiplex in Amritsar in December 2009 and currently operates 49 screens in nine cities, including its recently opened Mangalore property. It has 100 screens under different levels of fit-outs and plans to complete 500 screens in the next four years. Mexico recently proposed the signing of an agreement to mutually protect industrial property in both countries. This proposal is being analysed by the ministry of commerce and industry.
Both countries are negotiating an agreement between the ministries of agriculture to constitute a high level group that would look at issues such as trade and research from the agricultural perspective. This initiative would be of great relevance, as both India and Mexico have large agricultural production.
“There are a number of different incentives at the federal level directed at motivating foreign investments coming to Mexico. Three of these programmes are most often being called upon by foreign investors: IMMEX, PROSEC, and PROSOFT. IMMEX allows for temporary import of necessary goods used in an industrial or services process required for the making, transforming or repairing of commodities of foreign origin temporarily imported for re-exportation,” the envoy said.
The PROSEC is designed to help those producing a certain commodity, which allows them to import with ad-valorem preferential duty the goods to be employed in the making of products, whether the commodities are destined for export or use in national market. PROSOFT is aimed at fostering the growth of the software industry and to enlarge the IT market in Mexico by helping software and IT sector companies and the academic sector through financing and training programmes. Additionally, there is a wide variety of state and municipal incentives given to foreign investors, which may provide incentives depending on specific sectors or potential of the investment to generate employment in their states and municipalities.
In Mexico, it takes a foreign investor nine days to open a company. All Mexican companies linked to IT need qualified personnel who speak English that is comprehensible to Americans, and who work in their same time zone. Banks and technology companies need someone to develop their software, not necessarily call centres.
Companies like Wipro, TCS and Infosys had around 100 engineers in Mexico two years ago. Now, they have 600. It is also important to note that those who work in these companies are Mexican. By law, no more than 10% of the employees can be foreigners.
Recently, ProM?xico director Carlos Guzm?n Bofill was in India to attract investment into Mexico in the fields of IT, renewable energy, chemical, infrastructure, hospitality, mining and automotive. He also sought to explore opportunities to do business in sectors such as financial services, processed food and beverages, furniture, auto parts, metals, mining, chemical, petrochemical, electronics and appliances.
A delegation of buyers from India will travel to Mexico in 2013. Representatives of Mexican companies, in turn, will visit India to participate in the ACMA Automechanika fair, to be held in New Delhi in February.
