The bilateral relationship between Costa Rica and India is undergoing a significant transformation, with a steady growth in trade and investment across multiple sectors. As global economies look towards diversification, Costa Rica has emerged as a strategic partner for India in Central America, offering opportunities in sectors ranging from medical devices and biotechnology to renewable energy and tourism.
Bilateral Trade Overview
Bilateral trade between India and Costa Rica has shown consistent growth in recent years, standing at USD 301 million in the 2023-2024 period. India’s main exports to Costa Rica include motor vehicles, agrochemicals, pharmaceuticals, iron and steel, and medical devices. Meanwhile, Costa Rica’s exports to India are centered around wood products, surgical and medical instruments, computer hardware, and iron and steel.
However, this is only the beginning. “There is immense potential for further expansion in textiles, agriculture, renewable energies, biotechnology, and information technology,” notes Sofia Salas M., Charge d’ Affairs at the Embassy of Costa Rica in India on the eve of her country’s national day later this week. These sectors, which align with both nations’ strategic goals, present ripe opportunities for enhancing trade and investment relations.
Joint Economic and Trade Committee (JETCO)
Established in 2021, the India-Costa Rica Joint Economic and Trade Committee (JETCO) has been a catalyst in fostering economic cooperation. “Both governments are actively working to identify new avenues for growth while addressing non-tariff barriers that hinder trade expansion. Pharmaceuticals, medical devices, e-vehicles, tourism, and space technology have emerged as key areas where joint ventures could flourish,” the Costa Rican envoy tells FinancialExpress.com in an exclusive interaction.
Although a formal trade agreement has yet to be finalized, the collaborative initiatives between the two nations hint at the positive trajectory towards an eventual agreement. “Our goal is to build a gateway for Indian businesses to Latin America through Costa Rica,” says Salas M., indicating the country’s strategic positioning as a bridge to the broader region.
The Booming Medical Device Industry
According to her, one of the most promising sectors for collaboration is medical devices, where Costa Rica is a global leader. Over the past decade, the country has evolved into a hub for high-tech medical device manufacturing, exporting over USD 7.4 billion worth of medical products in 2023 alone. Costa Rica ranks as the ninth-largest exporter of medical devices globally, with many international firms such as Abbott, Medtronic, and Boston Scientific establishing significant operations in the country.
“With India’s robust pharmaceutical and life sciences sectors, there is a clear opportunity for partnerships in R&D, manufacturing, and the joint production of medical equipment. The medical devices sector could benefit from technology exchange and co-investments, strengthening the supply chains of both nations,” she adds.
Climate Change and Renewable Energy Cooperation
Both India and Costa Rica have strong commitments to addressing climate change and promoting renewable energy solutions. “Costa Rica is a global leader in environmental sustainability, generating over 98% of its electricity from renewable sources like hydropower, wind, and geothermal energy. By 2050, Costa Rica aims to achieve net-zero emissions, a goal that is aligned with India’s own environmental targets,” she explains.
India, on the other hand, has committed to installing 500 GW of renewable energy capacity by 2030. This mutual focus on sustainable development has created ample room for collaboration in areas such as renewable energy projects, biodiversity conservation, and reforestation. Costa Rica has already shown its interest in working closely with India’s Ministry of Environment, Forest and Climate Change and the Ministry of Earth Sciences to explore joint initiatives.
One such initiative was the Blue Talks, co-hosted by Costa Rica and India in New Delhi, which focused on ocean health and governance. “Our countries are strongly aligned on environmental protection and the fight against climate change, and we believe these partnerships are crucial for the Global South,” remarked Sofia Salas M., emphasizing Costa Rica’s role as an environmental leader.
Technology, Innovation, and Green Economy
Costa Rica’s prowess in technology and innovation makes it an attractive partner for Indian companies, especially in sectors like IT services, cloud computing, and cybersecurity. The country’s strong intellectual property protection regime and focus on digital transformation provide a fertile ground for Indian tech firms to invest in or form joint ventures.
Additionally, Costa Rica’s green economy, bolstered by its leadership in sustainability and eco-friendly policies, offers opportunities for Indian businesses. The two countries could collaborate on projects focused on renewable energy, circular economy practices, and urban green initiatives, setting an example for sustainable development in the Global South.
Tourism and Cultural Exchanges
Tourism, particularly eco-tourism, is another sector with significant potential for collaboration. Costa Rica, known for its biodiversity and sustainable tourism practices, attracted over 11,000 Indian tourists in 2023, surpassing the number of visitors from China and Japan. Indian travel companies could benefit from promoting Costa Rica’s unique eco-friendly destinations, which are becoming increasingly popular with Indian tourists.
In her view, “The growing film industry in Costa Rica also presents an exciting opportunity for Bollywood. With its stunning natural landscapes and a supportive Film Commission offering attractive tax incentives, Costa Rica could soon become a top destination for Indian filmmakers.”
A Gateway to Latin America
Costa Rica’s strategic location in Central America makes it a natural gateway for Indian businesses to expand into Latin American markets. The country’s stable political environment, free trade agreements with major economies like the USA and the EU, and its focus on nearshoring make it an ideal partner for Indian companies looking to enter new markets.
Free Trade Zone
Costa Rica’s Free Trade Zone Regime offers significant tax incentives for foreign investors, including exemptions on income taxes, import duties, and property taxes, among others. This regime has successfully attracted multinational corporations to set up regional hubs, creating a conducive environment for Indian businesses to explore the region.
In the words of Sofia Salas M., “Our relationship is built on shared values, mutual respect, and the common goal of fostering development through trade, investment, and sustainability. The future of India-Costa Rica relations is full of promise.”
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Publish date : 2024-09-09 21:18:00
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