“Uruguay identifies India as a priority partner in several areas. Its market has the potential to further develop and enhance bilateral trade and investment.”
In the upcoming G20 summit to be hosted by Brazil, Uruguay has been invited as one of the MERCOSUR countries. How do you see this development and what role does Uruguay plan to play in the G20 Summit?
Uruguay is grateful for Brazil’s initiative to invite us to participate in the G20 meeting. Since we are not a member state, our participation was based on the essential respect owed to those who offer their opinions as external parties.
Foreign Minister Omar Paganini, who represented Uruguay at the meeting, focused on the G20’s role in addressing current international tensions. He emphasized that the only solid foundation for multilateral institutions is “human rights and the basic principles of international law, such as respect for territorial integrity and the peaceful settlement of disputes.”
Additionally, in another session, he addressed the challenges facing current international institutions, which stem from a prior crisis of multilateralism. Uruguay believes that issues of efficacy and legitimacy must be addressed while respecting the sovereignty of different countries. These often difficult-to-solve tensions arise in a world where the line between local and international problems is increasingly blurred. It is a complex reality where G20 countries must provide leadership to improve global governance.
In this regard, India plays an important role in repositioning global leadership and making the post-1945 architecture relevant to current problems.
Indian-Uruguayan bilateral partnerships were solidified further with your visit to India in March 2023. What are the highlights of your visit to India?
The IV Meeting under the ROU – India Consultation Mechanism, held in Montevideo on November 29, 2021, set a benchmark in our already strong relationship. Held seven years after the last meeting, it evidenced the good level of relations between Uruguay and India in the political, commercial, investment, cultural, and cooperation areas. We had a substantive discussion on issues of mutual interest for our bilateral relationship as well as regarding the multilateral and regional agendas.
The long list of agreements between our countries is a symbol of the quality of this relationship. We have a double taxation agreement; an agreement on customs cooperation; MoUs for five-year visas for business people; a Memorandum for consultations between our Ministries of Foreign Affairs, a Joint Commission on economic affairs and agreements on cooperation on renewable energies. Furthermore, we also have agreements between different private institutions.
We are ambitious and want to continue developing and expanding our relationship based on these and new agreements. There are areas to increase our cooperation such as investments, trade – including by moving forward on the SPS habilitation process for products of our interest – and cooperation on IT and audiovisual services. Also, concluding the negotiations for a Bilateral Investment Agreement is, in my view, essential to strengthen our relationship.
In March 2023 you were hosted by India for the 5th round of Foreign Office Consultations. What were some of the key takeaways from these consultations?
As mentioned, this past meeting set a benchmark; Uruguay identifies India as a priority partner in several areas. Its market has the potential to further develop and enhance bilateral trade and investment.
India is a logistic hub with routes to the South Asian market, particularly for global services, especially those associated with ICTs. At the same time, Uruguay can act as a gateway to our region. There is clearly enough room to identify opportunities for the benefit of both economies.
In 2022, India ranked 14th in the list of Uruguayan export destinations and number 7 as the origin of national imports. Nevertheless, we foresee potential for an increase in the trade relationship.
In terms of investments, India is a significant partner for Uruguay. Our country has a safe investment environment, an attractive and stable legal regime, and a regulatory and institutional framework that listens to the needs of investors. As a consequence, FDI flows from all over the world have grown significantly in recent years, and India is no exception, with investments in the services sector standing out.
Currently, there are 14 companies with Indian capital operating in Uruguay. Among them, the following stand out: TATA Consultancy Services LTD, TATA Motors, and Interactive Networks.
This adds to the fact that a new IT company such as Infogain has also started doing business in Uruguay in 2022 and we see that this company has opened new horizons.
2023 marked 75 years of the establishment of Indian-Uruguayan diplomatic relations. What are your views on the future of this bilateral partnership?
There is a vast potential for deepening the economic and commercial ties between India and Uruguay. India has witnessed consistent structured reforms and liberalization, relaxation of FDI norms, relentless focus on improving both digital and physical infrastructure and advancing social and financial inclusion over the past two years, which has ensured sustained economic growth.
India and Uruguay have many things in common: both are leading democracies, committed to innovation and high-tech advancement, with a special focus on food security and responsible environmental goals. Despite being far apart, distance should not be a barrier to good business relations. The inauguration last year of the Indo-Uruguayan Chamber of Commerce has a bright future ahead of it. The private sectors of both countries can accelerate the process of identifying complementary areas, thus creating a significant flow in our trade relationship.
Despite both countries having developed extensive cooperation in various areas, the bilateral relationship still has much room to deepen. We understand that our bilateral relations grow stronger by the year, and we intend to strengthen trade relationships, support the increase in investment flows, and reinforce social and cultural exchanges between the two countries.
In this line, we propose and evaluate together the prospects of cooperation agreements between the Uruguayan Agency for Cinema and Audiovisual and its Indian counterpart to strengthen the linkage between the Uruguayan and Indian audiovisual sectors, particularly through participation in festivals, applying the “Uruguay Audiovisual Program,” and encouraging international co-productions.
Last, but not least, a number of Indian companies including Reliance and Sakti use the facilities that the ´Ras’ Group provides in its logistic Montevideo compound which also gives services to Indian companies, as well as support in marketing.
Connectivity is another issue that should have a closer outcome. In this direction we offer Air India the only free airport in the region to establish an air route to connect Delhi and Montevideo.
I am enthusiastic about what the future can bring and wish a positive expansion of our trade and a much closer and realistic approach, in sensitive matters, between each other.
Information Technology is one of the major sectors of cooperation and investments between India and Uruguay. In your view, what are the sectors for developing such closer cooperation?
For sure there are great opportunities and doors to be opened by this relationship. Uruguay is a small country but strategically located in the heart of the most dynamic and developed part of the continent. With the best, updated to modern standards, free natural harbor in the region and also a free airport that complements the free zones, Uruguay is fully open for business. The country has the best road network in South America and transport, already being electrified, with the first electric highway in the region, reliable companies make it an important logistic hub that is called to be the main entrance to promising South American markets.
Uruguay is a pioneer in the region in ICT and a destination for international companies seeking quality, efficiency, experience, and new opportunities in the most stable and reliable business environment in Latin America. Several factors, such as connectivity, the technological and innovation ecosystem, macroeconomic and institutional stability, respect for contracts, human talent, and good performance in ESG factors, project Uruguay as a technological hub in the region and an ideal ecosystem for global ventures.
The ICT industry is one of the most promising and important sectors in our country, accounting for 3.4% of our GDP and showing continuous growth over the last years. It enjoys important tax exemptions and the possibility of operating in an export-oriented Free Trade Zone Regime.
Uruguay has a solid and first-class IT infrastructure, resulting from an intensive public investment strategy that positioned the country among the first in Latin America in internet penetration (ITU) and in the percentage of households and companies connected with optic fiber.
We assure big data storage for all companies in the world. The country is totally accessible through Wifi, 5G, optic fiber and we have the largest number of mobile phones per inhabitant in the region. Uruguay also holds the fastest data transmission speed in all South America. We made our goal to deliver mobile phone, internet, and other data signals in a quick and efficient manner. It is also the first and only country in South America to be part of the D10, the group of the world´s most advanced states in digital governance. It is, at the same time, well known that Uruguay is the biggest software producer from Latin America. It also has the most recent technological advances in the audiovisual industry and we already have ongoing associations between Uruguayan and Indian production companies preparing to release a film during this year.
Many international technology firms and global companies, such as Google, Globant, TATA, and Microsoft, choose the country as a base for their international or regional headquarters.
In November 2022, the government launched the Uruguay Innovation HUB program, aiming to transform the country from a business hub to a regional innovation hub. This program focuses on attracting and accelerating national and international startups, attracting investment funds, and encouraging the installation of laboratories that strengthen the national ecosystem by accessing technology and attracting professionals from all over the world.
To wrap up, we understand that these are the areas were India and Uruguay could mainly cooperate in ICT.
India and Uruguay are parties to the MERCOSUR Preferential Trade Agreement (PTA). How do you see both countries utilizing this agreement to foster deeper trade ties?
The relations between MERCOSUR and India have almost two decades of history, framed through the Preferential Trade Agreement (PTA) signed in January 2004. The purpose of the Agreement is to strengthen relations between MERCOSUR and India and promote trade by exchanging reciprocal fixed tariff preferences. Ultimately, the aim of this Agreement is to create a free trade area between the parties.
However, as the number of tariff concessions is limited to a few lines, the PTA does not reflect the true potential for trade between both sides, given the complementarity between the economies. This is why Uruguay firmly believes in the importance of deepening the Agreement.
We believe there is enough room to explore complementarities and benefits for a more robust and deeper trade agreement. This semester, the MERCOSUR States Parties will have internal discussions to decide on the steps to be taken regarding the MERCOSUR-India Preferential Trade Agreement.
Finally, I would like to emphasize that Uruguay has played an active role among MERCOSUR State Parties, promoting India as a key partner.
How important is the Indian diaspora in the socio-economic development of Uruguay in your view, and what are some of its contributions to Uruguayan society?
In the last decade, the number of immigrants from India arriving in Uruguay has doubled, from 637 in 2008, to 1238 in 2017, according to data provided by the National Directorate for Immigration.
To understand why these citizens from the world’s most populous country crossed half the globe to reach Uruguay we have to revert to my previous reply about the role of the Information Technology sector and investments.
The landing of Tata Consultancy Services in Uruguay in 2002 led to the company expatriating several workers from India to Uruguay, and many of them deciding to stay in our country and developing their lives here.
We are a country of immigrants, so there is no better news than having a new influx from such a rich and diverse culture as it is the Indian one, which we receive with open arms.
Would you like to give any message to our Envoy Excellency readers?
Uruguay deeply values the longstanding friendship and updated partnership we share with India. As we celebrate this valuable relation, we look forward to further strengthening our bonds in trade, investment, technology, and cultural exchanges. Together, we can harness our shared values and mutual interests to create a brighter future for both of our nations. Let us continue to build on our achievements, foster innovation, and drive sustainable development for the benefit of our peoples. Uruguay is committed to working closely with India to explore new opportunities and deepen our collaboration in the years to come.