Published On : 16-Nov-2021
Bolivia is one of the two landlocked countries in South America, the second being its close neighbour Paraguay. The fact that Bolivia’s frontiers do not consist of a seaport monumentally increases the transport cost that it has to bear on imports. Nonetheless, after overwrought legal battles and negotiations, Bolivia has managed to retain its access to the two Chilean ports of Arica and Antofagasta. It is estimated that if Bolivia had sovereign access to the Pacific, its GDP would be a fifth higher.
India and Bolivia share a cordial political relationship with extensive bilateral exchanges, trade and investment agreements. In 2019, President of India Ram Nath Kovind made a state visit to Bolivia. India imports a substantial amount of precious metals from Bolivia. However, the trade relationship between the two countries is defined by Bolivia’s extensive Lithium reserves. The production of Electric Vehicles(EV) requires Lithium as a key raw material. The ‘Lithium Triangle’ that includes Bolivia along with Chile and Argentina is home to about 75% of the world’s reserves. Chinese mining and battery companies have set off on a splurge to acquire lithium mines and reserves. With the culmination of the COP26 summit and climate change taking a centre stage in world politics, the Lithium race will determine the trade metrics between Indian and Bolivia in the coming years.
Jindal Steel and Power Ltd. had invested in a Bolivian iron ore mine and steel plant in the past. Indian automobile sector giants such as Tata Motors, Bajaj Auto, Hero Motors and Mahindra & Mahindra have retail outlets and dealerships in Bolivia. Besides, Tech Mahindra also provides software and integration solutions to Bolivian firms.
Bolivia’s imports in 2020 stood at an estimated value of $7.1 Billion while the per capita import value was $600. Due to the Coronavirus pandemic, the import numbers have fallen by 27.6% compared to 2019.
Bolivia’s top imports include Mineral Fuels, the value of $918 Million, at a total of 13% of all imports. The other top imports include Machinery ($813.5 Million), Vehicles ($676.7) and Electrical Equipment ($389.5 Million).
The top import partners that Bolivia trades with are other Latin American nations like Brazil($1.19 Billion), Argentina($719 Million), Peru($560 Million) and Chile($313 million). Although China($1.58 Billion) is Bolivia’s top importer, standing at about 22% of its total imports.
Since the onset of the 21st century, Bolivia has managed to become a major exporter of Natural gas($2.04 Billion in 2020,), which accounts for almost a third of its total exports. Other top exports include Ore Slag and Ash ($1.48 billion) and Pearls and Precious Stones ($1.48 Billion).
Brazil($1.12 Billion) is Bolivia’s top export partner, at 16% of the total exports. Behind Brazil come Argentina($1.03 Billion) and India($717.58 Million). Reports suggest that Bolivian gas is headed to become scarce in the oncoming years, which will present a formidable task for Argentina and Brazil. Bolivia’s domestic demand for gas is rising and its production is steadily declining. Argentina and Brazil will struggle to replace the import volume as the gaping supply gap will not be fulfilled by their domestic production. With climate concerns becoming more pressing, the two countries might look to switch to cleaner modes of energy and mobility.
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