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What more to expect from Paraguayan President's visit
A lot can happen over a maiden visit of a State leader. Paraguayan President Santiago Peña's three day long maiden visit to India from June 2- 4 presents a momentum in turning point in the ties of New Delhi and Asuncion, the capital of the landlocked, riverine nation. An economist by degree and occupation, President Peña brings a data-driven perspective to governance, viewing society through analytical metrics not just by his political ideology and preconceived principles, drawing from office. Prior to assuming the presidency, President Pena was the finance minister and once led the Central Bank of Paraguay.
President Peña's maiden visit after a brief gap of any leader's visit to India occurs at an time when China has almost no naysayers in Latin America. Paraguay is the only country in South America that maintains diplomatic relations with Taiwan. Strategically, India and Paraguay share a common outlook on supporting Taiwan's autonomy. In December, Paraguay expelled Chinese envoy Xu Wei for alleged interference in its internal affairs.
During his visit to New Delhi, President Peña held comprehensive talks with Prime Minister Narendra Modi on a wide range of issues. He emphasized that Paraguay produces enough food to feed ten times its own population. The nation possesses an intimate knowledge of the soil, yet remains bereft of technological acumen. Agritech and high-tech collaboration are essential between two aspiring nations. India is a perfect match in advancing its ambition for global food security through such partnerships.
Interestingly, Paraguay also produces stevia, a natural sweetener permitted in India; however, Indian importers currently rely mostly on China and the US. There is clear scope for Indian players to tap into Paraguay as a new and reliable source.
Paraguay's export portfolio is traditionally reserved to the periphery, with most of its trade directed to China, Brazil, and Argentina. However, it is now actively seeking to diversify its partners. As a landlocked nation with no coastline to secure, Paraguay benefits from a relatively low defence burden. It borders Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest—all trade partners, not threats. Given its strategic central location in South America, Paraguay could serve as a valuable regional hub for India to access broader Latin American markets. Both countries are eager to strengthen and expand their existing trade links under the India-MERCOSUR Preferential Trade Agreement. However, consensus among all five MERCOSUR member states is required to expand any talks between India and MERCOSUR.
Paraguay's trade with China is about $5 billion plus whereas with India time to time differs from $130 million to $470 million. India wouldn't be in a position to reach anything near that China's export but it should rapidly increase the trade volume. India's advances in IT, digitalisation, innovation, and platforms like UPI and UIDAI have drawn interest from many South American countries, including Paraguay.
Paraguay has historically maintained modest defence expenditures, but recent years have seen a shift in strategy. As India begins producing AK-203 assault rifles in Uttar Pradesh in collaboration with Russia, there is growing interest in expanding defence cooperation. Paraguay may consider imports of defence and surveillance items for traditional as well as cyber threats, including Indian-manufactured small arms and police equipment.
Paraguay has overcome its traumatic past marked by two wars - the War of the Triple Alliance (1864–1870) against Brazil, Argentina, and Uruguay, which resulted in the loss of a large part of its territory and left the nation devastated for decades. And the other, Chaco War against Bolivia (1932–1935).
Despite being landlocked, Paraguay is crisscrossed by large rivers and generates nearly all its electricity from hydroelectric sources. The Itaipu Dam, a joint operation with Brazil, supplies about 90% of Paraguay's electricity. India's capabilities in riverine and flood data management, as well as weather prediction, could be of immense value to Paraguay's hydro-focused energy sector. Given Paraguay's extensive river systems, there may also be opportunities for India and Paraguay to exchange knowledge or develop initiatives related to riverine connectivity - benefiting from each other's experience as major riverine nations.
A member of the Lima Group, Paraguay is a vocal supporter of reforming the United Nations Security Council and other multilateral institutions, including global financial systems. India, with its rich civilizational heritage and growing global influence, is well-positioned to build a deep and enduring relationship with Paraguay—one that spans not just trade, but also for a defiant advocate of multipolarity.
For an economist or a social scientist, society is the largest laboratory. During his visit, President Peña has already engaged with numerous leaders and heads of institutions. He showed particular interest in the Vande Bharat trains and connectivity projects, signalling plans to explore and possibly collaborate in these areas.
Paraguay, a nation of around seven million people is a vast agrarian country, with approximately 40% of its territory covered in forest. It also possesses rich mineral resources, including critical minerals such as uranium and lithium which are in demand in India. Paraguay has had its share of challenges despite being a high performer in the agriculture sector. India should come forward identifying and helping to eradicate them. With its brigade of travel influencers, India must promote the nation's civilisation-based tourism and Spanish speaking youtubers bring more visitors to India.
Paraguay is dire need of applied technology especially IT. Business ties between India and Paraguay could expand beyond meat and soybean exports. Major Indian automobile companies are already present in Paraguay, but there is scope for exporting superior tech-driven mobility equipment such as two-wheelers, lifts, elevators, and goods transporters.
This article is authored by Ayanangsha Maitra, journalist, Center of Geoeconomics for the Global South, UAE.
