Indian investors enter the Caribbean

The fact that ethnic Indians constitute significant proportions of the population of some of the Caribbean nations has facilitated Indian investment and fostered close political ties. It’s perhaps no coincidence that Indian companies have been most successful in Trinidad and Tobago where Indians account for 40 per cent of the population; Guyana where they account for 51 per cent; and Suriname, 31 per cent. India’s fast economic growth and subsequent hunger for energy resources and other raw materials will likely contribute to further Indian interest in the region.

India is not alone with such interest and anticipates stiff competition from China and other players. While China’s presence in the Caribbean is impressive, India may enjoy some advantages over its neighbour: the Caribbean’s large ethnic Indian population offers India the possibility of building deeper, more solid economic and political networks that, could, in the long term, offer significant advantages.

The fact that India is a democracy with stable relations with United States, the region’s dominant power, may facilitate its presence.

In contrast, China has complex relations with the US and close ties with countries hostile to American interests, including Venezuela and Cuba, creating some apprehension over China’s growing presence in the Caribbean and Latin America. Venezuela, too, is now an observer member of CARICOM and recently opened embassies in the region.

Most of India’s investment is carried out by private firms, while China is represented by state-owned companies, closely directed from Beijing. As a result, Indian investment in the Caribbean depends less on its government’s policies towards the region. Should New Delhi lose interest in the region, Indian business would be in a better position to survive without much government backing. If deprived of government support, Chinese businesses might struggle to maintain an advantage over their Indian counterparts.

Not tied to government political objectives, Indian businesses enjoy greater flexibility. The Indian presence in the Caribbean, just like the growth of India, is taking place at a less impressive pace than that of China. But India has some advantages for the long term, so while China is winning the Caribbean sprint, India could win the marathon.