Colombia

Colombia pushing hard for Indian investment

Colombia, the main reformer in the Latin American region according to the World Bank,i s going full steam to attract Indian investments with a horde of agreements including double taxation and free trade to further enhance an investment friendly environment. Prior to the arrival of Colombia's Minister of State for Industry, Mr. Carlos de Hart, the Colombian Ambassador in New Delhi, Mr. Juan Alfredo Pinto has indicated that there are “intense talks with India” on increasing trade.
“The balance of trade between the two countries is at par; we import from India goods worth USD 700 million and we export for equal amount making the total trade at USD 1400 million,” Mr. Pinto said. Colombia has finished negotiations on Double Taxation Agreement (DTA) with India and “it is expected to be signed soon.” Further talks on a Free Trade Agreement (FTA) will be held in second half of this year.
Mr. Pinto said, “In the mining sector a government-to-government agreement was being looked into. The number of Indian companies is expected to rise to 30 in Colombia from four in the past.”
The Colombian Ambassador said, “There are immense possibilities for Indian IT companies to invest in Colombia as the population of 45 million has 45 million phones and the connectivity is very high.” He indicated that other visits, including the Minister for External Affairs coming for talks on bilateral relations, will be consolidated into agreements in the second half of the year.
Concession to Industry
Mr. Alejandro Pelaez, Director, Proexport Colombia, outlining the concessions to the industry has said that industry could import hardware into Colombia without paying VAT. Their buying was also exempt from VAT and there were no restrictions on exporting from Colombia. According to him, there are tremendous opportunities for the IT sector in the local market in Colombia. “It is the second country in Latin America to spend USD 3.6 billion in IT sector.”
Growth in Banking
Mr. Pelaez said that the banking sector has been growing intensely in Colombia. “Ten years ago 40 per cent of the population had access to banking and today the number has risen to 60 per cent.” Since last year the Indian company Infosys has been working in the banking sector with the largest contract in Latin America. Tata Consultancy Services (TCS) started operations in 2005 in Colombia with Finance Ministry. Since then they have been growing constantly in the banking and insurance sector. The Proexport Director says that there is wide scope for the insurance companies as the sales of cars touched 300000 last year and they all need insurances.
Airlines Welcome
Airlines too have a scope to invest. There is only one state-owned carrier – SATENA. “Colombia will try to contact airline companies in India for joint ventures,” he noted. While China is the second largest trade partner of Colombia, India stands at the 12th place. This could be attributed to hurdles in freight movement between Colombia and India. Movement of sea freight between the two takes at least 60 days as the shipping lines go via Europe and Atlantic Ocean. On the other hand, China uses the Pacific to reach Colombia faster. The Proexport Director said Colombia has been exporting petroleum and coal to India so far. “We want to export processed foods and confectionery now. We have the presence of Hero Honda and Bajaj and a lot of pharmaceutical companies exporting, but we want the pharma industry to invest as a hub and not simply export to Colombia. We have no corporate taxes for hospitals for next 30 years. We need investments in infrastructure. The business climate has improved in Colombia.”
“Colombia is the second largest producer of bio-fuels after Brazil in the region, but all machinery we use for the production comes from India. We have large investments from China in oil, gas and coal sectors.”