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India’s Economic Engagement of Africa: Partnering Africa

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  • January 02, 2009
    Fellows' Seminar
    Only by Invitation
    1030 to 1300 hrs

    Chair: Arvind Gupta
    Discussants: Dilip Lahiri and Shipra Tripathi

    Historically, the principal tenet of India’s policy towards Africa has been support for the struggle for decolonization and racial discrimination in South Africa. Economic engagement between India and Africa is increasing like never before though it is not new. During the colonial period, India played a significant role in terms of supplying personnel for middle level services such as duka. At present the scale and swiftness of India’s economic engagement with Africa is expanding. This has been facilitated by the changing African outlook in recent years. On the political side there has been an end in sight for some of the debilitating conflicts that have ravaged the continent. At the same time there is a move by Africans to take charge of their own destiny. For its part, the Indian government laid out its broad economic cooperation frame work during the India-Africa Forum Summit in April 2008. This conference gained significance because of an attempt to forge a closer partnership between India and African countries and address the common goals and challenges they face. An important element of India’s approach towards Africa is the growing presence of the private sector in African countries.

    India does not have the financial capacity to match the grants in aid by China and the West to Africa. However, India recognizes the African countries’ focus on capacity building and human resources development. As a result, Africa today is the largest recipient of India’s technical cooperation programme. India’s growing synergy with Africa is quite visible in the recent trade trends. Bilateral trade has increased from US $967 million in 1990-91 to $25 billion in 2006-07. India has institutionalized its relationship with African countries by launching the India-Africa Forum in April 2008. During the summit, Prime Minister Manmohan Singh announced a number of initiatives including a duty-free trade preference scheme for 34 African countries. India has also enhanced its relations with African countries in the energy sector. Currently around 24 per cent of India’s crude oil imports are sourced from Africa. Indian national oil companies like the Oil and Natural Gas Corporation Videsh Limited (OVL) has invested in equity assets in African countries.

    However, China’s booming investment in Africa has provoked a heated debate on the continent and around the world. One of the challenges that India faces is the penchant among the Western media and intellectual to mention in the same breath both the Indian model of engagement with Africa and the very different Chinese economic approach to Africa. African countries have acknowledged the growth of Indian economy and have expressed a desire to emulate the Indian model.

    Points raised during the Discussion

    • The India-Africa economic engagement needs to be examined carefully with specific data.
    • There is a need to create a centre or an institution to study India-Africa engagement.
    • There is a need to check where India should be focused and to know what when and where Africans really want to engage us.
    • Private sector involvement in Africa is very important.
    • People to people contact should be enhanced.
    • Non-Alignment is important for maintaining good relations between India and Africa.
    • There isn’t much Indian scholarship on Africa and this needs to be rectified.
    • India’s engagement in Africa’s social domain must be looked into.
    • India should identify areas in which more positive relations with African countries can be developed such as health, medicine, etc.
    • India should understand the sensibility of Africans.
    • In terms of investment competition between India and China, Africa welcomes both of them.
    • African countries believe that their problems can be better understood by Asian countries than others.
    • There is a need to promulgate a new policy towards Africa along the lines of the ‘look east policy’.
    • There is no need to compare China’s influence in Africa with that of India.

    Prepared by Dr. M.Mahtab Alam Rizvi, Research Assistant at the Institute for Defence Studies and Analyses, New Delhi.