The relationship between Uruguay and India has gained renewed momentum in recent years, driven by an increase in bilateral trade, investments in key sectors, and an active diplomatic agenda. According to a report published by Uruguay XXI in July 2025, the bond between the two countries is built on a foundation of shared history, technological cooperation, and a steadily expanding economic horizon.
In the context of global transformation, where geopolitics and trade flows are being reshaped, India is emerging as a key partner for Latin America. Uruguay, with its institutional stability and open trade policies, aims to establish itself as a reliable platform for Indian investment and as a strategic supplier of raw materials and agricultural goods.
During the recent BRICS Summit held in Rio de Janeiro, Uruguayan President Yamandú Orsi held a bilateral meeting with Indian Prime Minister Narendra Modi, reaffirming the mutual interest between Uruguay and India in strengthening political and economic ties.
Diplomatic relations between the two countries were formally established in 1948. Still, it was in the 2000s that the relationship took on a more strategic character—particularly after Tata Consultancy Services (TCS) established operations in Uruguay in 2002. Since then, Indian investments have extended to sectors such as information technology, pharmaceuticals, manufacturing, and logistics, consolidating India as one of Uruguay’s key Asian partners.
India: A Rising Economy and a Key Trade Partner
India has transformed into a major player in global trade. Despite the impacts of the 2020 pandemic, its economy rebounded strongly and reached historic highs in both exports and imports in 2022—evidence of its deepening integration into the global economy. This sustained expansion has made India a strategic source of industrial goods and an increasingly attractive destination for exporters worldwide.
For Uruguay, India represents a gateway to a market of over 1.45 billion consumers with increasingly diversified demand. In recent years, Uruguayan exports to India have grown significantly, reaching $93 million in 2024—more than six times the pre-pandemic level.
Approximately 79% of these exports consisted of forest products, primarily wood. The remainder included barley, wool, textiles, and, to a lesser extent, chemicals and leather. India’s growing demand for barley, linked to the post-pandemic development of its brewing industry, has created a new opportunity for Uruguay’s agricultural sector.
On the other hand, Uruguay imported goods worth $230 million from India in 2024. The majority of these imports were concentrated in mineral fuels (30%), vehicles and auto parts (17%), organic chemicals (11%), and industrial and electronic machinery. The textile sector also stood out, with over $7 million in imports of garments and fabrics.
Productive Complementarity and Growth in Trade
The trade landscape reveals a high degree of complementarity between the economies of Uruguay and India. India serves as a key supplier of industrialized goods, while Uruguay provides raw materials, agri-industrial products, and wood—essential components for India’s construction, energy, and food sectors.
However, the relationship still faces challenges. There is an asymmetry in the trade balance that could be addressed through greater export diversification by Uruguay, as well as through agreements that reduce tariff barriers and promote value-added trade.
Existing Agreements and the Path Toward a Trade Deal
- Currently, the legal framework governing bilateral relations includes three main agreements:
- The Bilateral Investment Agreement was signed in 2008 and is currently being updated.
- The Double Taxation Avoidance Agreement has been in force since 2011.
- The Preferential Trade Agreement between Mercosur and India, implemented in 2009, provides for tariff reductions ranging from 10% to 100% on select products, including pharmaceuticals, machinery, processed foods, and textiles.
Despite these advances, the agreements remain limited in scope. Both Montevideo and New Delhi have expressed interest in moving toward a Free Trade Agreement (FTA). According to the Uruguay XXI report, India does not require prior approval from Mercosur to negotiate a bilateral FTA—creating a real opportunity for Uruguay to expand its international integration independently.
Indian Investment in Uruguay: Technology, Services, and Energy
Indian investment in Uruguay has made a significant impact, especially in Zonamerica, where TCS established one of its main regional technology service centers. Other notable companies such as Infogain Latam, Deciral, and Oliva Garden have also expanded India’s presence in areas like IT services, pharmaceuticals, and textile manufacturing.
There has also been investment in renewable energy, through Suzlon Wind Energy, and in maritime transport, with the Avvashya Group. These investments align with the global expansion strategies of Indian multinationals, which in 2024 increased their foreign direct investment stock to $260 billion—10% more than the previous year.
Uruguay’s selection as a gateway to Latin America is no coincidence. Its reliable legal framework, investment incentives, and political stability make it an ideal destination for companies looking to establish regional operations.
Tariffs: A Structural Barrier Limiting Potential
One of the main obstacles to expanding Uruguayan exports to India is the varying level of tariffs applied, which differ significantly depending on the product. While some sectors face moderate rates, others are hindered by peak tariffs that reach up to 300%—particularly on agricultural goods.
For example:
- Pepper and rice face tariffs ranging from 70% to 100%;
- Powdered milk, corn, and nuts: 50% to 70%;
- Fruits such as grapes, apples, oranges, and pears: 30-40%.
In 2023, Uruguay paid $3.9 million in tariffs on exports to India—mostly on wood ($3.2 million) and seafood ($252,000). These figures contrast with the more than $387 million Uruguay paid in global tariffs that year, indicating that while India represents a relatively small portion, there is strong growth potential if preferential agreements can be secured.
The Uruguay XXI report also identifies untapped export potential in products like scoured wool, semiprecious stones, and soybeans—sectors that could scale up if more aggressive commercial strategies are pursued and improved access conditions are negotiated.
A Bilateral Trade Relationship with Room to Grow
Bilateral trade between Uruguay and India already exceeds $320 million annually, but analysts agree this is just the beginning. There are numerous opportunities to deepen the relationship in areas such as:
- Export of value-added food products;
- Attraction of investment in technology and logistics;
- Integration into pharmaceutical value chains;
Tapping into opportunities in the education and scientific sectors, where India also has a strong offering.
The main challenge is to diversify Uruguay’s export portfolio, which is currently heavily reliant on wood, and to move toward a more balanced and sustainable partnership. Diplomatic cooperation, investment agreements, and an active trade policy will be essential for both countries to capitalize on their economic complementarity.
A 75-Year Relationship with a Forward-Looking Vision
Seventy-five years after establishing diplomatic relations, Uruguay and India now share a mature agenda that includes historical, commercial, and strategic components. The interest of both governments in deepening bilateral ties reflects a commitment to a development model based on openness, innovation, and market integration.
In an era of geopolitical transformation, strengthening relationships like this enables countries such as Uruguay to diversify their trade partners and reduce reliance on traditional markets. For India, establishing stable alliances in Latin America is crucial to its global outreach strategy.