India-Africa Trade Corridors – Building Supply Chains Beyond Raw Materials

Introduction

In recent years, the contours of global trade have been reshaped by shifting geopolitical realities, the restructuring of supply chains, and an increasing emphasis on South-South cooperation. In this dynamic landscape, India and Africa enjoyed a relationship connected through a shared history of ancient trade routes, demographic dynamism, and development aspirations that predate the era of globalisation. Over the last decade, Africa has been one of the world’s fastest-growing regions. By 2030, it will be home to nearly 1.7 billion people and an estimated USD 6.7 trillion worth of consumer and business spending.¹

India-Africa ties have significantly strengthened in recent times, this deepening of the bilateral relationship is visible with increased Indian diplomatic missions in Africa as well as the inclusion of the African Union as a permanent member of the G20 during the G20 summit held in India in 2023, marking a milestone for the continent in joining the global discussion platform and fostering new, stronger partnerships with India as well as with the world. India-Africa trade stands at USD 83 billion, with Indian exports to Africa at USD 45 billion and imports at USD 38 billion.²

Trade between India and Africa has grown significantly from USD 68.5 billion in 2011-12 to USD 83.34 billion in 2023-24, making India Africa’s third-largest trading partner after the EU (European Union) and China.³ India is also the second-largest lender in Africa. India has invested USD 75 billion in Africa, aiming to raise this figure to USD 150 billion by 2030.⁴ The trade basket mainly includes raw commodities. Over time, India and Africa seek to redefine their partnership beyond traditional commodity exchange.

Shift from commodity-driven trade to strategic engagements

Historically, the Indian-African trade relationship has been primarily driven by Africa’s export of raw materials, primarily agricultural produce and hydrocarbons, and India’s export of pharmaceuticals, textiles, and automobiles. While this pattern creates a mutually beneficial exchange, it also reinforces dependency on low-value commodities from Africa and limited value addition on both sides. Recognising this severe imbalance, India and African nations are presently prioritising a major shift from a commodity-driven model to strategic engagement encompassing manufacturing, digital services, and skill development. India’s engagement with Africa has expanded beyond bilateral trade of goods and services to capacity building, credit lines, and private sector investments. The African Continental Free Trade Area (AfCFTA), launched in 2021, has expanded India-Africa trade, ensuring economic progress, increasing job opportunities, and reducing poverty. The development partnership between Africa and India has been multifaceted and evolved across areas in trade and investments, capacity building, technology transfer, grants and concessional finance, and Lines of Credit (LoC).

• Capacity Building Initiatives: India’s development assistance heavily relies on capacity building efforts prioritising skills, technology, and knowledge transfer. India has provided LoC to Africa for infrastructure development, agribusiness, healthcare, and other capacity-building initiatives. Moreover, India offers various scholarships and training programs to support cultural and educational endeavours in Africa. More than 40,000 African students have received the benefits of the ITEC (Indian Technical and Economic Cooperation) programme, under which training programmes are provided to students in India. More than 15,000 students from 22 African nations have received scholarships under the e-Vidya Bharti and e-Arogya Bharti tele-education projects.⁵
• Agriculture and Food Processing: Agriculture has been a crucial aspect of the India-Africa connection. Indian skills and agricultural technologies have significantly improved African output and food security. Indian firms are partnering with African counterparts to set up food processing units that reduce post-harvest losses, implement sustainable irrigation methods, boost exports, and create jobs locally.
• Healthcare: India and Africa have a long history of working together on health improvement. Indian pharmaceuticals have established production facilities in African nations like Nigeria, Kenya, and South Africa, contributing to affordable healthcare access while prominently reducing Africa’s import dependency. During the COVID-19 pandemic, India sent medications, vaccinations, and healthcare equipment to 32 African nations. ⁶

Tackling Vulnerabilities in the Supply Chains

One of the critical elements of strengthening India-Africa trade corridors or supply chains is improving maritime and logistics connectivity. There is also a need to focus on maritime security in the IOR (Indian Ocean Region) as crucial shipping lanes pass through the region, and persistent threats from piracy, terrorism, arms, and drug trafficking lead to inflation in insurance costs and deter shipping.

Other risks, such as IUU (Illegal, Unreported, and Unregulated) fishing and illegal resource exploitation, further disrupt coastal economies and trade routes. For instance, since late 2023, Houthi attacks in the Red Sea forced container ships to reroute around the Cape of Good Hope, adding approximately 10 extra days to voyages and imposing up to USD 1 million in fuel costs per journey. This rerouting triggered a 90% drop in container traffic through the Red Sea, causing global freight disruptions valued at nearly USD 1 trillion and sharply inflated logistics expenses.

India’s exporters, particularly textiles, leather, and confectionery, face mounting cost pressures and delivery delays.⁷ As a counterbalance, India is deepening security ties with Africa with focus on SAGAR (Security and Growth for All in the Region), which has now evolved into MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions), signalling India’s ambition to offer a maritime partnership model that is inclusive, consultative, and development-driven.

Two flagship efforts made by India under MAHASAGAR to ensure its presence in the IOR region are, the Africa India Key Maritime Engagement (AIKEYME) 2025, which is a six-day multilateral naval exercise in Dar-e-Salaam designed to enhance interoperability, anti-piracy readiness, and joint maritime operations among India and nine African partner States and the Indian Ocean Ship (IOS) SAGAR deployment, featuring INS Sunayna sailing with a multinational crew to ports like Dar‑es‑Salaam, Nacala, Port Louis, Port Victoria, and Malé, conducting EEZ (Exclusive Economic Zone) surveillance and joint drills across the western Indian Ocean ⁸ highlighting India’s evolving approach to maritime diplomacy and regional security as well as positioning India as a reliable maritime security partner and first responder in the IOR, especially vital amid growing threats in crucial shipping lanes. India is also advancing this vision by investing in fisheries, supporting development in port and coastal infrastructure, digital connectivity, and maritime transport corridors in Africa and India, laying the groundwork for co-developing resilient Indo-African supply chains.

Future Opportunities

Given the huge synergies between Africa and India, ample opportunities exist for the Indian industries to explore prospects in Africa’s development. A private investment-led economic cooperation model can produce the finest outcomes. Possible areas of collaboration are:

• Infrastructure Development: Infrastructure development is the backbone of resilient supply chains, and between India and Africa, it plays a foundational role in transforming their economic partnership from a primary commodity exchange into a sophisticated, integrated value chain system. More than 90% of the trade occurs via sea, investment and upgradation of African ports, and linking them to Indian ports will massively improve transit speed, reduce congestion, and increase container capacity.
• Technology Transfer and Digital Backbone: Technology transfer from India to Africa will result in enhanced productivity, self-reliance, and adaptability of African industries. This will promote localised supply chains rather than relying on imports. Transferring of Indian expertise in low-cost, high-efficiency manufacturing in fields like pharmaceuticals, agro-processing, textiles, and light engineering provides aid to African industries to reduce input costs and meet export quality standards.
• Trilateral Partnerships: India is also exploring triangular cooperation with countries like Japan, Germany, the UK, and the UAE to co-invest in African infrastructure and expand farming opportunities, thereby creating a multi-stakeholder model of engagement.
• Focus on Services: The ITEC initiative, which has expanded engagements to over 44 African countries, promotes capacity creation, as does the Pan-Africa e-Network, which connects 54 African countries to India and shares expertise in telecom, medicine, and health. Continuing and growing such programs is critical for producing skilled professionals and boosting bilateral relations. A services-driven regional development strategy is vital for integrating services into larger national development goals.

Conclusion

As India aspires to become a global manufacturing hub and Africa positions itself as a continent of the future, the time is ripe to transform India-Africa trade corridors from resource extraction to shared value creation. Supportive policy frameworks and institutional linkages are essential to unlocking the full potential of Indian-African corridors. By building robust, resilient, and inclusive supply chains, India and Africa can redefine their partnerships, not as that of donor and recipient, but as equals working towards sustainable growth and development. This transformation will not only boost trade but also help both the regions to achieve their strategic goals — whether it is Atmanirbhar Bharat or Agenda 2063.

 

References

[1] Confederation of Indian Industry. (2024). Pathways for Shared Progress: India‑Africa Economic Cooperation. CII International Research.

[2] Ibid 1

[3] Ibid 1

[4] Nantulya, P. (2023, December 12). Africa-India cooperation sets benchmark for partnership. Africa Center for Strategic Studies. Retrieved from https://africacenter.org/spotlight/africa-india-cooperation-benchmark-partnership/

[5] Ministry of External Affairs, Government of India. (2024, June 25). Remarks by EAM, Dr. S. Jaishankar on the occasion of Africa Day Celebrations. Retrieved from https://www.mea.gov.in/SpeechesStatements.htm?dtl/37907/Remarks+by+EAM+Dr+S+Jaishankar+on+the+occasion+of+Africa+Day+Celebrations

[6] Ibid 5

[7] Retrieved from https://www.financialexpress.com/policy/economy-red-sea-crisis-trade-volumes-to-be-adversely-impacted-in-new-fiscal-asia-africa-and-europe-to-face-most-disruption-says-gtri-3437297/?utm_source=chatgpt.com

[8] Pant, H. V., & Bhattacharya, S. (2025, April 9). MAHASAGAR is the next step in India-Africa collaboration. Retrieved from https://theprint.in/opinion/mahasagar-is-the-next-step-in-india-africa-collaboration-it-addresses-maritime-security/2582844/?utm_source=chatgpt.com