By Shrenya Mallik and Sameer Acharya
When External Affairs Minister S. Jaishankar visited Panama in April 2023, the optics were modest, but the signal was clear. India was not merely engaging another Latin American partner but reaffirming a relationship that has quietly endured across history, migration, and evolving global priorities. The visit, marked by meetings with Panama’s leadership and a shared emphasis on expanding economic cooperation, underscored a partnership that is often overlooked but increasingly relevant.
India-Panama relations are not new. They are among the oldest in Central America, with roots stretching back to the mid-19th century when Indian workers travelled across oceans to participate in the construction of the Panama Railways and later the Panama Canal. These early migrants, largely invisible in official histories, laid the foundations of a connection that predates formal diplomacy, which was established in 1962.
The story of this relationship is, in many ways, the story of its diaspora. Today, around 15,000 Indians and people of Indian origin live in Panama, forming the largest Indian community in Central America. Over time, this community has transitioned from labour migration to economic participation, becoming deeply embedded in Panama’s commercial and social fabric.
Members of the diaspora have built businesses across sectors, particularly in trade and commerce, contributing to Panama’s economy while maintaining strong cultural ties with India. Indian cuisine, cultural institutions, and places of worship have become part of the country’s social landscape. There are also visible markers of this shared heritage, including statues of Mahatma Gandhi and Mother Teresa in Panama City.
Historical anecdotes from the Canal era illustrate how deeply this integration runs. Indian workers were part of the diverse labour force that contributed to the construction and functioning of the Canal. Over time, the community came to be associated with reliability and enterprise, even taking on services such as transport operations in and around the Canal Zone. These stories, though often informal, point to a legacy of trust and contribution that continues to shape perceptions of the Indian community in Panama.
Beyond history and culture, Panama’s strategic importance for India is significant. Located at the intersection of the Atlantic and Pacific Oceans, Panama controls one of the world’s most critical maritime routes. The Panama Canal is central to global trade, positioning the country as a gateway to Latin America and a key node in global supply chains. For India, which relies heavily on maritime commerce, this makes Panama a valuable partner.
Economic ties between the two countries reflect this potential. Bilateral trade is currently around US$600 million, with India exporting pharmaceuticals, textiles, automobiles, and engineering goods, and importing mineral fuels, metals, and timber. Panama also serves as a re-export hub, enabling Indian goods to access markets across Central and South America more efficiently.
The Panamanian economy, which is heavily oriented toward services such as logistics, banking, and trade, aligns well with India’s strengths in technology and digital services. The presence of a robust financial ecosystem and the widespread use of the US dollar make Panama an attractive platform for Indian businesses looking to expand into the region.
Cooperation between the two countries is also expanding into areas such as technology,
education, and development partnerships. India has contributed to capacity building in Panama through initiatives such as the establishment of an IT Centre of Excellence and training programmes under the Indian Technical and Economic Cooperation framework. More recently, the two countries have signed agreements to implement Quick Impact Projects aimed at delivering tangible benefits in sectors such as education, technology, and public welfare. These initiatives signal a shift toward more people-centric engagement.
Symbolic gestures have also reinforced bilateral ties. The illumination of a prominent building in Panama City in the colours of India’s national flag to mark Republic Day reflected both recognition of the Indian diaspora and the broader goodwill between the two countries.
Members of the Indian diaspora have also taken on expanded civic and leadership roles in Panama, contributing not just economically but also to public life, reflecting a deeper integration into Panamanian society. This evolving engagement is mirrored in the political sphere, with leaders such as the former Foreign Minister Janaina Tewaney playing an active role in strengthening bilateral ties. India and Panama also share a convergence of interests in multilateral forums.
Panama has supported India’s positions on several global issues, including its aspirations for a greater role in international institutions. This alignment reflects a broader partnership grounded in cooperation and mutual respect.
Despite these strengths, the relationship remains underdeveloped relative to its potential. Geographic distance, limited connectivity, and low awareness among businesses continue to constrain deeper engagement. However, as global supply chains diversify and countries seek new partnerships, Panama’s role as a logistics and financial hub is likely to grow. Caught between Washington’s coercive pressure and Beijing’s deep economic entrenchment, Panama has strong incentive to cultivate a more robust partnership with India as a strategic counterbalance to dependence on either superpower.
While Indiaspora’s work is primarily focused on countries with the largest Indian diaspora populations, we are equally eager to engage with Indian diaspora communities across the globe, from Panama and Iceland to Japan and beyond. We continually seek to cultivate relationships with leaders of Indian origin worldwide, united by a shared mission: empowering the diaspora to be a force for good.
India-Panama relations demonstrate how diaspora-led connections can evolve into strategic partnerships. What began as a story of migration and labour has transformed into a relationship encompassing trade, technology, culture, and diplomacy. The EAM’s 2023 visit was therefore not just a diplomatic engagement. It was a reminder of a partnership that has long existed beneath the surface. As India looks to expand its presence in Latin America, Panama offers both access and opportunity. The next step lies in building on this foundation with sustained and purposeful engagement.
(Shrenya Mallik is Senior Manager, Research and Events at Indiaspora. She can be reached via email at shrenya@indiaspora.org. Sameer Acharya is Marketing and Communications Manager, Indiaspora.)