In a discussion with G. Rathinavelu, Chairman and Co-Founder of the Africa India Economic Foundation (AIEF), we explore the foundation’s vision and its role in strengthening economic ties between India and Africa. With a keen focus on enhancing collaboration across sectors, AIEF aims to transform African economies and bolster India-Africa relations through innovative partnerships and strategic investments. Rathinavelu also shares his perspectives on how AIEF is facilitating growth, supporting private sector and MSMEs, and leveraging major agreements like the African Continental Free Trade Area (AfCFTA) to drive mutual benefits.
Diplomatist: Could you elaborate on the vision of the Africa India Economic Foundation and its primary objectives?
G Rathinavelu: The Africa India Economic Foundation (AIEF) envisions transforming African countries into a global manufacturing hub by leveraging their natural resources alongside Indian expertise, experience, and technologies. AIEF provides a platform to support African and Indian entrepreneurs, fostering commerce, investments, technology, industry, trade, and knowledge exchange between the private and public sectors, as well as MSMEs of both regions. The foundation focuses on socio-economic and cultural development, aiming to create national wealth through advancements in science, technology, infrastructure, skill development, education, healthcare, agriculture, and ICT. AIEF is dedicated to bridging the digital divide and promoting inclusive growth.
Diplomatist: The private sector and MSMEs are crucial for economic growth and development. What specific efforts is the AIEF making to engage and support private sector businesses and MSMEs in both India and Africa? How do you envision these efforts contributing to the overall economic collaboration between the two regions?
G Rathinavelu: The Africa India Economic Foundation (AIEF) fosters business links between the private sectors and MSMEs of India and Africa. It provides a platform for entrepreneurs to collaborate and create sustainable businesses, promoting business-to-business interactions and cross-border synergies.
AIEF offers members opportunities to participate in seminars, conferences, and meetings, facilitating brand promotion and interactions with international delegations and agencies. It also provides tailored training, management development, and strategic mentorship programs.
AIEF promotes not only business and trade but also cultural networking, enhancing people-to-people interactions. It symbolizes seamless interaction and unity between Africa and India, building on strong government links and progressive economic policies to create a dynamic and vibrant Africa.
High-level visits by African and Indian leaders have laid a strong foundation for advancing Africa-India relations. Strong Government-to-Government (G2G) ties have paved the way for increased Business-to-Business (B2B) links. Recent bold economic initiatives and progressive policies in many African countries have opened new business opportunities. AIEF has identified investor partners to help create a strong, dynamic, and vibrant Africa.
Diplomatist: How does the AfCFTA impact the economic relationship between India and Africa, and what role is the Africa India Economic Foundation playing in leveraging this agreement to enhance trade and investment between the two regions?
G Rathinavelu: The AfCFTA presents Indian companies with a significant opportunity to expand their market reach and diversify investments in Africa through preferential market access and regional value chain integration. The agreement is projected to boost Africa’s exports and foreign direct investment by 160% in the coming years. This partnership can drive economic development, reduce poverty, and diversify India’s import of raw materials, such as minerals and crude oil, from Africa. AIEF will work to leverage this agreement to promote free trade between Africa and India, benefiting the combined 3 billion people in both regions.
Diplomatist: How do you see the economic relationship between India and Africa evolving in the next five years? What are the key opportunities and challenges that you anticipate?
G Rathinavelu: India’s trade with Africa is set to reach nearly $180 billion by 2030 with Indian investors becoming major players. However, challenges such as neocolonialism, resource exploitation, and aggressive competition from global and Chinese firms with state-backed policies are significant.
African nations face critical issues like rapid population growth and resource scarcity, demanding strategic and sustainable development. AIEF will tackle these challenges by championing planned development and leveraging Indian expertise, supported by robust governmental policies.
Despite the potential, Indian private sectors and MSMEs remain reluctant to engage. AIEF, in partnership with African governments and the African Union (through an MOU established in 2023 following the AU 2020 summit decision), will facilitate genuine Indian investments, honour local entrepreneurs, and enhance India-Africa business relations.
Diplomatist: In your opinion, which sectors offer the most significant potential for growth in India-Africa economic relations? How is the Foundation addressing these areas?
G Rathinavelu: AIEF is committed to enhancing food security and advancing agricultural technology in both regions. India’s private sector and MSMEs provide crucial expertise in energy security, with investments in African oil fields and mining fostering further collaboration through tailored financial support. Indian knowledge of the blue economy and renewable energy can drive Africa’s growth and address food security challenges.
The key to India-Africa economic growth lies in leveraging Indian experience, expertise, and technologies with targeted government support across sectors such as: Electric Vehicles (EV), Healthcare and Insurance, Renewable Energy, Information Technology (IT), FMCG, Infrastructure, Service Sector, Agriculture, IT & BPM, Gems and Jewellery, Gold Refining, Electronics Manufacturing, Diamond Cutting and Polishing, Consumer Durables, Defence Manufacturing, Aerospace, Engineering and Capital Goods, Shipbuilding, Healthcare Manufacturing, Pharmaceutical Manufacturing, Auto Components, Heavy and Light Engineering and Food Processing.
AIEF will drive Africa’s development with transparent, inclusive growth by integrating Indian expertise and securing international investment support, aiming to build a multi-trillion-dollar economy in the next five years.
Diplomatist: What are the Foundation’s strategic priorities for the coming years, and how do you plan to measure the success of your initiatives in promoting economic development and bilateral relations?
G Rathinavelu: AIEF’s Strategic priorities in the coming years would be for the setting up of the Africa India business centre in Mumbai (AIBC) as per the African Union Summit 2020 historic decisions which is aimed at substantially enhancing and strengthening not only India-Africa trade, commercial, economic and investment relations, including in the field of small and medium enterprises and private sectors but also with the rest of the world.
In the last few years, there has been a great spurt in political, economic and commercial engagement between India, Africa and the rest of the world as well as an all-round enhancement of this relationship in a variety of fields.
The number of visits at the highest level by the leaders of both countries attests to the growing bonhomie between the leadership of these countries as well as highlights the strong foundation that the leadership has laid to take MSMEs and public and private relations to greater heights.
AIEF will promote Indian private sector investments in Africa. The strong G2G links, including through development partnerships, has paved the way for increasing B2B links. The bold economic and commercial initiatives taken in the last few years as well as the progressive economic policies adopted by Governments of many African countries in the recent past have opened up new vistas of business cooperation. The business communities of both countries are ready to take these B2B links to the next level. Many African countries have also voiced the need to have a strong trade representation in India in order to take advantage of the various initiatives taken in the last few years.
The Africa India Business Centre will house Trade Representatives from African countries, which will be done through various channels. It will also house private and public sector and other business entities from Africa and will also have a special segment for MSMEs. It will have adequate space for business meetings, exhibition and display space and for holding large business conferences. At the same time, Indian businesses, which are not exposed adequately to African markets, will greatly benefit by interacting closely with the Trade Representatives of African countries.
The African and Indian Business Chambers and their business communities will form part of the Africa India Business Centre along with governmental policy support. Africa India Business Centre has the potential to transform Africa into a manufacturing hub and further, this concept is the first of its kind.
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