India – An Active Partner in Africa’s Development

Africa Diary

India tries to promote its image as a development partner of Africa. Unlike previous colonial experiences that have created the image of foreign engagements in Africa as the ‘scramble for Africa’, India’s development assistance to the continent is seen in the light of South-South Cooperation.

By the beginning of the 21st century, India established itself as one of the main actors on the African economic scene. India enjoys well-deserved authority in the region and on world arena, as a whole. New Delhi plays an important role in solving pressing international and regional issues, possesses mighty economic potential and rich cultural heritage. The growing economic power, a balanced foreign policy, as well as traditional historical ties and excellent prospects for the future make India more and more attractive in the eyes of Africans. India and Africa share a lot in terms of history and culture. They have common development challenges and goals.

The last two years also proved that India’s economy, though smaller today than that of China, may in certain respects prove to be more capable to adjust itself to negative impacts of global development trends. In 2015, out of all the BRICS countries, the Indian economic growth was the least affected by them. This factor unites India with some of the leading economic performers on the African continent – the so called African Lions. In 2015, according to preliminary estimates, India and six countries of the African continent were among the world’s top ten leaders by measure of the annual GNP growth rate.

India has officially declared promoting relations with Africa a priority goal. Assurances made by Indian officials in their statements during the 1st India Africa Summit back in 2008 have been substantiated from year to year by systematic practical activities. India has turned into a very important trading partner for Africa, its fourth largest after the EU, China and US. Although the scale of its trade is far behind that of the three biggest partners, it has grown rapidly during this time, though at a pace slightly slower than China’s.

India is currently a very important trading partner for Africa, its fourth largest after the EU, China and US. Although the volume of its trade is still far behind that of the three leading partners, the commerce has grown rapidly in the last ten years, at a pace only comparable with China. Thus, India is the second most important partner for Africa from among the BRICS countries.

In 2012–2013, trade turnover between India and African countries reached $70.25 billion. In 2015, the value of mutual trade was expected to reach $90–100 billion, but due to a steep slump of the world prices for oil and many other primary commodities (Indian chief imports from the continent) during the last quarter of the year, the figure will be lower. A few African countries - Nigeria, South Africa, Angola, Egypt, Algeria and Morocco - account for 89 percent of total African exports to India by value. They maintain a trade surplus with India that is largely driven by exports of oil, gas, ores and gold. In 2013, they had a total of $24.5 billion in trade surplus. According to the estimates of the Confederation of Indian Industries (CII), the latter was expected to reach $67 billion in 2015. The top six commodities, of oil 60 percent, gold 15 percent, phosphoric acid 3.8 percent, coal 3.5 percent, liquefied natural gas 2.7 percent and shelled cashew 2.6 percent, together constitute 87 percent of total imports from Africa.

India-Africa Summits

The India–Africa Forum Summits (IAFS) play an important role and provide the official platform for the African-Indian relation. IAFS will be held once in every three years. Heads of state and government of India and 14 countries of Africa chosen by the African Union met together from April 4-8, 2008 in New Delhi to discuss the problems and the future of Indo-African economic dialogue. The second forum was held in Addis Ababa in 2011. It was at the Summit in Ethiopia that the Indian side confirmed its earlier promises to introduce a system of duty free goods transport from 34 African countries and set up the Export Import Bank of India with a credit line of $30 billion to finance Indian exports to Africa. In addition, African countries were allocated $5 billion in loans and $700 million to support education and infrastructure programmes.

The Third Summit, which took place in October 2015, proved to be a real breakthrough and had the broadest and most impressive participation. The 2015 Summit adopted two documents – the ‘Delhi Declaration’ and the India Africa Framework for Strategic Cooperation to chart a new course of engagement in diverse areas with Modi describing it as a historic day for both sides.

Prime Minister Narendra Modi assured 41 heads of state and government and hundreds of senior officials from 54 African countries that India will extend all possible assistance to them including in areas of defence, security, trade and infrastructure development. PM Modi emphasised that it would not be possible for the world to effectively end extreme poverty by 2030, without focusing its strategy and resources on India and Africa. By 2030, Africa and India will jointly be home to more than one-third of the global population. Unless serious development work is undertaken, this may also be the poorest part of the global population. India is ready to take its share of responsibility and effort. Since the 1st Summit in 2008, India has already provided or pledged to grant $7.4 billion in soft loans and $1.2 billion in aid. The premier promised Africans $10 billion in new credit over the next five years. In addition, India will offer grant aid of $600 million. Of that, $100 million would go toward a new India-Africa Development Fund and $10 million to an India-Africa Health Fund.

Hydrocarbons Conference

Today, Indian companies generally focus on oil and gas resources. African imports cover about one-fifth of India’s oil needs. Indian state-run enterprises have invested in acquiring hydrocarbon assets in Africa in countries such as Sudan, South Sudan, Mozambique, Gabon and Egypt.

In 2014, the Indian state oil and gas company ONGC Videsh and the Angolan Sonangol signed an agreement on the joint development of oil on the Angolan continental shelf. The country also participates in the development of coal and gas deposits in Mozambique. The Essel Group ME, a wholly-owned subsidiary of Essel Group India, has signed an agreement for acquiring 60 percent participating interest in the portfolio of African oil and gas exploration projects owned by Simba Energy Inc, a Canadian publicly traded oil and gas company.

In January 2016, the fourth India-Africa Hydrocarbons Conference was held in New Delhi. As many as 25 African nations have been invited for the conference. Nine of them were represented by their minister. The participants were working to align and initiate future collaborations between India and Africa in hydrocarbons. It is believed that the current continuing slump in global oil prices is an ‘opportune time’ for forging partnerships between importers and exporters from India and Africa.

Development Work and Financial Assistance

It is primarily non-state corporations, large and medium-sized businesses that operate in the continent. A significant proportion of Indian investments in Africa is largely driven by India’s food and energy security, water shortages, demand for natural resource. India also tries to promote its image as a development partner of Africa. Unlike previous colonial experiences that have created the image of foreign engagements in Africa as the ‘scramble for Africa’, India’s development assistance to the continent is seen in the light of South-South Cooperation.

India plans to focus on technology to transform lives of the weakest in the remotest parts of Africa. The Tata Group, whose interests are spread across numerous sectors, including information and communication technologies, is arguably one of the leaders in this field. India is also stepping up investment in agriculture; African farmers are being taught how to use modern techniques and agricultural technologies; and Indian companies are taking out long-term leases of agricultural land, which is seen as somewhat controversial inside Africa. The Indian government plans to strengthen the monitoring system on India’s development works in Africa, to ensure effective implementation of the projects.

The important thing is that India invests in the development of human capital in Africa. In 2012, New Delhi announced plans to create more than one hundred research and innovation centres and human resource development institutions – planning and management in education, information technology, etc. The quota for African students studying in India has been increased to 22,000, an Indian–African ‘virtual university’ has been set up as part of the 2008 Pan-African Network Project, with the quota for Indian experts teaching African students using distance learning methods being increased to 10,000.

The Strategic Perspective

In the next decade, prioritising Indian-African relations will only gain momentum. Strengthening the multi polar (polycentric) system of international relations and the increased number of international actors and diversification of national interests necessitating their protection on the international arena will intensify foreign activity of African states. A slackening of the guardianship on the part of traditional partners provides African countries with better opportunities to successfully champion their national interests and promote their initiatives. India will play a more important role in the efforts to reform the United Nations, modernise the global financial institutions and other structures, and shape norms and rules of international relations and it hopes to find the understanding and support on the part of African governments.

Africans are determined to build partnerships with emerging new centres of power in world politics and their associations, such as the BRICS, ASEAN, etc. In line with traditions laid down in the times of their struggle for national liberation and Non-Aligned Movement, Africans welcome India’s ascend to club of the most influential actors on the continent and the strengthening of the New Delhi’s role in world affairs. Most Africans perceive India as their natural and privileged partner.

Compared to its BRICS partners, India’s competitive advantages include the development of information technology and the services sector. These are based on the experience of cooperating with African countries in providing technical aid and assistance in training specialists as part of the Indian Technical and Economic Cooperation programme.

Indian companies have integrated themselves into African society and the African economy more effectively than their Chinese counterparts, and they are more willing to hire local staff. The presence of large and deeply rooted Indian diaspora in Africa makes it easier for Indian companies and enterprises to find local partners.

Maintaining mutually beneficial Indian-African political, economic, trade and cultural ties is a complex and multifarious challenge, which promotes the interests of India on the African continent and the world over.

Currently, the scope for Indian-African partnership is significantly expanding. This process is unlikely to end in breakthroughs, but there is little doubt that India will try hard to intensify its full-scale cooperation with African countries, the success of which would assist the mutual interests of both sides and contribute to the establishment of a just and multi polar world order under the complex and contradictory conditions of the 21st century.

This article is based on the results of Research Project No 16-07-00010 ‘African Vector’ of the Fundamental Transformation of Russia’s Economic Structure in the New Geopolitical Environment, executed by the authors with financial support of the Russian Foundation for Humanities.

Bio Notes

Professor Leonid Fituni, DSc., is Director of the Centre for Strategic and Global Studies and Deputy Director Institute for African Studies Russian Academy of Science. He is President of the Independent Centre for Documentation on Liberty, Democracy and Justice (Moscow). He is also Full Professor, Chair of Asian and African Economies, Lomonosov Moscow State University (MGU)

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