Skills, not resources, will determine whether the AI and green transitions empower the Global South or deepen dependency
The question facing much of the Global South today is not so much whether they should embrace digitalisation and a green economy, but whether their economies can generate and retain the skills required to benefit from them truly. Both India and Latin America have learned through experience that economic growth without inclusion can breed instability, and technology without education just ends up in dependency. The convergence of their developmental trajectories therefore offers an opportunity to rethink how the Global South participates in the digital age.
Latin America has extraordinary renewable and mineral wealth, from lithium and copper through to hydropower and solar corridors. However, the structural question remains: will these resources drive industrial transformation, or will they instead lock the region into a new form of dependency? If Latin American countries focus on exporting raw minerals without building local processing, technological capability, or skilled labour, the region could fall into a “resource without skill” trap. This is a pattern already seen in several African economies, where raw materials are exported while value addition, technology, and decent employment accrue elsewhere.
Many Latin American governments appear more aware of this pitfall. Countries like Brazil, Chile, Peru, and Argentina have started negotiating agreements that stress local value addition, technology transfer, sustainable mining practices, and workforce development alongside foreign investment. This is an opening for India, which could allow it to distinguish its engagement through co-development instead of extraction. Rather than echoing the Belt and Road Initiative, India’s approach could aim to pair market access with capacity building, digital cooperation, and human capital development.
Over the last decade, Chinese state-backed firms and financial institutions have expanded their presence across Latin America’s critical mineral and infrastructure sectors. They have been investing heavily in lithium projects in Argentina, Bolivia, and Chile, copper operations in Peru, and in ports, railways, and energy infrastructure intended to secure longer-term supply chains for the green transition. While this model has boosted extraction capacity and infrastructure build-out across the region, it has also raised concerns about technological dependency, concentrated control over mineral value chains, and limited local manufacturing or higher-value industrial capacity within Latin America itself.
As the World Economic Forum (WEF) Future of Jobs Report 2025 found, 84 percent of employers in Latin America and the Caribbean plan to upskill their own workforce to meet rising demand for digital and technical skills. And nearly 2 to 5 percent of jobs face the potential for full automation. The Inter-American Development Bank has estimated that around 63 percent of rural households have stable internet access, and fewer than one in five workers have basic digital literacy. Even though countries like Brazil, Chile, and Uruguay have invested significantly in broadband expansion, the skills-development gap remains stubbornly visible.
The education systems in the southern hemisphere, even if they are relatively well-funded, averaging about 4.6 percent of GDP in 2020, have not really adapted to match the evolving demands of the labour market. Vocational and technical training still feels limited. In Brazil, for example, barely 11 percent of secondary students enter vocational tracks, while it is about 40 percent in OECD economies. Informal employment, which still covers over 50 percent of the region’s labour force, also works against the spread of skills. At the same time, there is a consistent outflow of qualified professionals to North America and Europe, which economists describe as human capital leakage. So Latin America ends up caught between an expanding digital frontier and a workforce that is not fully equipped, creating a situation that can harden into a two-speed economy—a split between those who can participate in the knowledge economy and those who cannot.
India’s path gives a sharper counterpoint by planning to scale renewable capacity to over 500 GW by 2030. India has invested in institutional and human capability to sustain the transition. Efforts like the Skill Council for Green Jobs and specialised institutes focused on solar and wind energy have built a pipeline of technicians, engineers, and project managers. These actions ensure that growth in renewables is matched by growth in domestic capability, and that’s the link Latin America urgently needs to construct before the gap becomes entrenched.
Over the past two decades, India has moved from being a service-outsourcing hub to becoming a global digital power.
Over the past two decades, India has moved from being a service-outsourcing hub to becoming a global digital power. With Digital India, Skill India, and Startup India doing the heavy lifting, the government has built an ecosystem that ties public digital infrastructure with private research, development, and innovation. India’s IT sector employs more than five million professionals and adds roughly eight per cent to national GDP. The country also produces around 1.5 million engineers each year, and it hosts over 100,000 startups, making it the world’s third-largest innovation ecosystem.
What’s also important is that India has shown that digital inclusion and efficiency need not be in opposition, because more than 1.3 billion people are registered under the Aadhaar biometric ID system, and over half a billion already use digital payment platforms like Unified Payments Interface (UPI). India has put together a low-cost, high-impact digital governance model that doesn’t feel like it has to choose one goal over the other. The ACI Worldwide Report 2024 said India made up 49 percent of global real-time payment transactions in 2023, which is a clear sign of leadership in digital payment innovation. And with UPI’s cross-border reach steadily growing, India seems to be setting new benchmarks for financial inclusion and digital empowerment worldwide.
Figure 1: Countries where UPI is operational
Source: Ministry of Finance
If Latin America adopts similar systems, perhaps through bilateral pilot projects with India involving Brazil, Mexico, or Colombia, it could boost financial inclusion and transparency while also reducing transaction costs.
This overall direction got more momentum during Brazilian President Luiz Inácio Lula da Silva’s state visit to India in February 2026, where digital cooperation became a central pillar of India–Brazil relations. Today, Brazil’s PIX system and India’s UPI are both among the biggest real-time payment systems on the planet. Their overlap hints at a broader Global South-led digital financial ecosystem, one built on interoperability, affordability, and technological sovereignty, rather than dependence on Western financial infrastructure. Discussions have also increasingly focused on connecting digital payment platforms and exploring interoperability between central bank digital currencies (CBDCs), particularly as countries across the Global South seek alternatives that strengthen financial inclusion and technological autonomy. Beyond payments, Lula’s presence at India’s AI Impact Summit 2026 also underlined a wider strategic convergence between the two countries around emerging technologies and inclusive digital governance.
For Latin America, India shouldn’t be a replica blueprint but a partner to co-develop frameworks that align sustainability with skills. A partnership based on human capital development could look like a few tangible steps, beginning with Indian edtech firms collaborating with Latin American universities and education ministries to build bilingual online learning ecosystems in English, Spanish, and Portuguese.
For Latin America, India shouldn’t be a replica blueprint but a partner to co-develop frameworks that align sustainability with skills.
Instead of relying on expensive proprietary systems. India’s digital platforms often rely on open-source architecture, as well as public-private collaboration. The Skill India Mission alone has trained over 150 million people across more than forty industrial sectors, with an emphasis on employability and entrepreneurship rather than formal credentials. That mix of institutional ambition and market engagement offers a blueprint for developing economies trying to widen access to technology and knowledge.
Instead of relying only on conventional scholarships, India and Latin America could set up joint centres of applied innovation, linking IITs with top regional universities. These hubs could work on renewable energy modelling, digital public infrastructure, and sustainable industrial design, creating a feedback loop where skills, technology, and research reinforce one another, supporting South-South cooperation through shared capacity-building.
At the same time, Indian technology firms could be encouraged to invest in Latin America through tailored tax incentives and public-private partnerships, helping create regional hubs for technology services and jobs. Financial institutions such as the New Development Bank and IDB Invest could also play a greater role in funding joint work in digital infrastructure, green industrialisation, vocational training, and technology incubation. In that way, economic cooperation would connect with broader developmental goals, not just narrow, transactional trade relationships.
Latin America, historically characterised by its peripheral place in global decision-making, is also trying to diversify its partnerships and push for a more autonomous international presence. For India, this strategy likewise serves its broader geopolitical aspiration, which includes an effort to reorient global economic governance toward the Global South. Both regions share democratic values, multilateralism, and social justice, even if their paths look different. A deeper partnership between India and Latin America would therefore embody the wider project of rebalancing power toward the Global South, not via confrontation but through cooperation in sectors that directly advance human welfare. India’s affordable and adaptable development model, combined with institutional cooperation in areas such as digital economies, skills, renewable energy, and emerging technologies, could also help shape a more collaborative Global South response to the challenges of digital transformation, artificial intelligence, and green industrial transitions.
Prakreeti Chaudhary is a Research Intern at the Observer Research Foundation.
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Prakreeti Chaudhary is a Research Intern at the Observer Research Foundation. ...
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