Colombia is Latin America’s fourth largest oil producer and the world’s fourth largest coal producer, third largest coffee exporter, and second largest cut flowers exporter. This Latin American Economy has set a good example of prudent macroeconomic and fiscal management, anchored on an inflation targeting regime, a flexible exchange rate and a rule-based fiscal framework that enabled the economy to grow uninterrupted since 2000. The pandemic hit Colombia hard but prompt decisive measures by the government helped it to confront the menace. Private consumption is the main driver of the recovery, driven by a gradual pick-up of employment. Strong commodity prices have improved the terms of trade and are supporting fiscal outcomes, against the background of rising external demand. As per OECD, GDP is projected to grow by 6.1% in 2022 but to slow down to 2.1% in 2023.
India’s bilateral merchandise trade with Colombia reached USD 4.3 billion in 2021-22 where exports surged to USD 1.38 billion but imports more than doubled to around USD 3 billion in comparison to the previous fiscal due to quantum jump in oil import. India’s exports to Colombia include Automobiles, cotton, organic chemicals, pharmaceuticals, chemical products, Machinery and appliances, Plastics and Iron and Steel among others while India’s import basket comprises of mineral fuels, precious stones (pearls), aluminum, zinc, wood (teak) and plastics.
Engineering trade accounts for around 15% of bilateral merchandise trade between India and Colombia. Engineering exports to Colombia reached USD 0.65 billion in 2021-22 registering 62.3% growths over the previous fiscal and 12.06% growth over the exports in pre-pandemic time (2018-19). Engineering import from Colombia is not significant at all. Total bilateral engineering trade was recorded at USD 0.68 billion in 2021-22. India’s major engineering products exported to Colombia include Two and three wheelers, Motor vehicle/cars, Auto components/parts, Iron and steel, Products of iron and steel, Industrial Machinery and Electric machinery and equipment among others. Industrial machinery include machinery for Industrial Machinery for dairy, agriculture, food processing, textiles, paper, chemicals, etc, IC engines and parts, Nuclear reactors and broilers, Pumps of all types, Machine tools and Machinery for ATM, refrigeration among others. Subcontracting units like small and micro enterprises play an instrumental role in production of machineries in India by working as outsourcing units of large engineering firms.
Electric machinery and equipment, Industrial machinery and mechanical appliances, Automobile and auto components are the top three product groups in the global import basket of Colombia. Iron and Steel and Aircrafts &spacecrafts also come within the top ten. Therefore, Indian engineering producers and traders have ample scope to explore the Colombian market as India exports products of all these segments in a good quantity. Moreover, Automobile is one of the major sectors of India’s investment interest in Colombia.