Mexico emerging as hotspot for Indian destination weddings, envoy Lotfe says

Indian destination weddings in Mexico are surging, Mexican envoy Frederico Salas Lotfe said, while highlighting a trend that has become popular with the Indian diaspora in North America, especially Canada.

This trend not only boosts cultural and economic ties but also mirrors the deepening relationship between the two countries, intensified by strategic diplomatic efforts over the past decade, Lotfe said in an interview.

The nearshoring trend, in which companies especially in the information technology sector in the US move some business operations to a nearby country to save on costs, has also played a key role in strengthening economic ties between India and Mexico, the ambassador said.

The diplomat, who hails from Mexico City, also shone the spotlight on diversifying bilateral trade and India’s increasing thirst for tequila, even in the face of high tariffs.

Edited excerpt:

What is the latest on trade between India and Mexico?

The trade relationship between India and Mexico has been showing positive growth. This trend indicates a recovering and strengthening economic bond, with trade volumes nearing the pre-pandemic mark of almost $10 billion. The resurgence highlights not just recovery but also an important diversification in the trade relations between the two nations.

How extensive is the investment relationship?

Investment ties between India and Mexico are robust and diversified, involving about 200 Indian companies that have been established across Mexico. These companies span a variety of sectors, including the automotive industry, pharmaceuticals, and technology sectors like IT and innovation, exemplified by companies such as Tata Consultancy Services Ltd and Mahindra. Then there is recycling firm Uflex and also JK Tyre. This shows a strong Indian business footprint in Mexico. Conversely, Mexico has about 15 companies in India, venturing into various sectors, including entertainment with Cinepolis, the food industry with Bimbo, and KidZania chain of indoor family entertainment centers, indicating a reciprocal interest in investments and economic cooperation.

Mexico is also building the Isthmus of Tehuantepec rail corridor that could complement container movements along the Panama Canal. Many global companies are looking at that, and are also looking to take advantage in terms of building warehouses and distribution facilities.

Which sectors are of specific interest to Mexican companies?

Mexican companies are showing a keen interest in exploring investment opportunities in India, particularly focusing on sectors such as retail, automobiles, and chemicals. Their operations often revolve around importing a diverse array of products from India, ranging from textiles to electronics, suggesting a broader interest in leveraging India’s manufacturing and export capabilities. Additionally, some Mexican companies are considering more strategic sectors for investment, reflecting a broader and more nuanced approach to economic engagement with India.

Is the increasing economic engagement behind the recent opening of a consulate in Mumbai?

The consulate will do two things. One is to act as promoter of economic opportunities in Mexico, complimenting the work that we’re doing here in Delhi. It will also help alleviate some of the backlogs that we have in the consular section here at the embassy. Because of the growth of business presence in Mexico, many more businesses and people are requesting visas.

What is driving this increasing economic engagement in recent years?

Over the decades, India and Mexico have enjoyed a vibrant relationship marked by high-level visits from leaders of both countries, including several Mexican presidents visiting India, and notable Indian leaders such as Prime Minister Jawaharlal Nehru and Prime Minister Indira Gandhi, and more recently, Prime Minister Modi in 2016, visiting Mexico. These visits have been crucial in fostering a strong political and diplomatic relationship. The cultural exchanges between the two countries have been significant, with India being the guest of honor at the Guadalajara Book Fair in 2019, the largest of its kind in the Spanish-speaking world. This event was not just about literature but also showcased India’s rich culture through dance, music, and food. Moreover, the first-ever meeting of university presidents from both countries took place, emphasizing the deepening ties in education and research, with plans for further meetings to strengthen this relationship.

How has the tourism sector evolved, and what efforts are being made to improve connectivity?

Tourism between India and Mexico has seen considerable growth, with increasing numbers of Indians visiting Mexico and vice versa. Despite the geographical distance and current lack of direct flights, efforts are underway to enhance connectivity and make travel between the two countries more seamless. Discussions with airlines are ongoing to improve flight connections, aiming for a future where direct flights might become possible. Additionally, the trend of destination weddings has become popular, with Indians, including those from the diaspora in Canada, choosing Mexico for their celebrations, bringing significant cultural and economic interactions. This growing tourism reflects the broader, more profound bilateral relationship that has notably intensified in the last decade, especially under the influence of focused diplomatic efforts and cultural exchanges.

What is the potential of the tequila market in India?

The tequila market in India is experiencing rapid growth, with consumption rates doubling, attracting significant attention from Mexican tequila producers. Despite the high tariffs and taxes on alcohol imports making tequila an expensive choice for Indian consumers, the demand continues to rise. This interest has not only boosted tequila sales but also opened avenues for mezcal, indicating a vibrant market for Mexican spirits in India and showcasing the potential for cultural and economic exchanges between the two countries.

Are there opportunities for producing tequila or similar spirits in India?

India has begun producing spirits similar to tequila from agave, but due to denomination of origin rules, these cannot be officially labeled as tequila. Only 100% agave tequila, representing the highest quality of this spirit, must originate from Mexico. While India experiments with agave-based spirits, the distinction remains clear, and high-quality tequila imports from Mexico continue, highlighting the unique cultural and product-specific regulations that define the global spirits market.

How does nearshoring affect Mexico’s economic relations with Indian IT companies?

The concept of nearshoring plays a key role in strengthening economic relations between Mexico and Indian IT companies, particularly due to Mexico’s strategic location adjacent to the North American market. This geographical advantage makes Mexico an attractive base for Indian companies aiming to serve the US market more efficiently. The trend towards nearshoring is indicative of a broader strategy by Indian IT firms to optimize their operational footprint, leveraging Mexico’s position to enhance service delivery to North American clients.

Is there momentum towards establishing a free trade agreement (FTA) between India and Mexico?

There is interest in enhancing bilateral cooperation through an FTA between India and Mexico, which could potentially unlock new economic opportunities. However, the proposal requires detailed analysis to identify beneficial sectors and understand the potential impacts. Despite the absence of an FTA, trade between India and Mexico is flourishing, suggesting that an agreement could further amplify these economic ties. The ongoing discussions and considerations about an FTA reflect the mutual interest in deepening economic relations.

Are there any defense collaborations in the works?

Currently there are no significant defense deals or collaborations between India and Mexico. The focus of Mexico’s defense strategy is primarily on addressing internal security challenges. This status reflects the nature of bilateral relations, which are heavily weighted towards economic and cultural cooperation rather than defense and security alliances.

How do political and economic challenges in Mexico influence Indian businesses setting up there? Mexico is going to polls this year, so will there be policy continuity? The US is doubling down on immigration from Mexico, and then there is the drug cartel problem.

Despite the challenges, Indian businesses continue to actively invest and expand in Mexico, showing confidence in the Mexican economy and the broader Latin American market. This ongoing engagement suggests that Indian companies view Mexico as a strategic partner with significant potential for growth and collaboration. The resilience and expansion of Indian businesses in Mexico demonstrate a positive outlook on the part of Indian investors, undeterred by these challenges, and focused on long-term growth opportunities.