India is looking to increase its economic and diplomatic visibility in Africa and elsewhere once again – and the West, other Asian competitors and particularly African leadership, need to wake up and take stock of what this means.
India’s non-oil trade with West Africa stands at more than $3-billion and is rising rapidly, accounting for 1,2% of India’s world trade. Since the re-establishment of diplomatic relations in 1993, Indo-South African trade has increased to more than $4-billion, with a target of $12-billion in the next three years. Along the East African coast, cultural and trade relations continue to grow and India retains active relations with Mauritius and the Seychelles.
But, India’s economic links are moving beyond its traditional Indian Ocean and Commonwealth partners. Indian investment in Côte d’Ivoire is expected to grow to $1-billion by 2011, representing 10% of total Indian foreign investment in the past decade.
Last August an Indian diplomatic mission reopened in Kinshasa, while Gabon and Burkina Faso will follow soon. India has expanded its embassy in Senegal and Indo- Senegalese trade has grown to $400-million, due largely to exports of phosphoric acid. Indian firms are increasingly visible across Africa, seeking to buy diamonds for Mumbai’s vibrant polishing industry.
India neglected its Africa efforts in the Nineties and until 2003 the Indian foreign ministry had only a single Africa division. It now has three: West and Central Africa, East and Southern Africa and West Asia and North Africa.
The aim is to increase India’s role in Africa significantly. India’s quest for energy in West Africa is not a core component of its government’s energy policy: rather, it is part of its bid to diversify energy sources. India is prepared to offer package deals, including infrastructure investments, in addition to cash bonus payments on signature of contracts.
Unlike China, India does not have the focus of containing Taiwan or the weight of having a permanent seat on the United Nations Security Council to provide a political spine to its Africa policy.
India’s business engagement in Africa attracts mixed opinion.
Zambia opposition MP Guy Scott said: “People are saying, ‘The Whites were bad, the Indians were worse, but the Chinese are worst of all,'” a clear warning to learn from past mistakes.
India should not regard Africa as simply a source of natural resources.
Instead, it needs to invest in the region’s human capital and share Indian know-how. Many Indian goods have much greater suitability for African, than Western, markets. Sales of Tata cars, for instance, are booming in many African countries.
But the shared know-how should move beyond economic links. The working of India’s democracy in a post-colonial setting could provide relevant lessons for Africa.
Whatever role India ultimately plays in Africa, perhaps the most important element it introduces is competition. We need to watch carefully how its companies and others rise to this challenge.
Alex Vines is head of the Africa programme at Chatham House, the Royal Institute of International Affairs in London
Indo-African potential
According to a study by the Federation of Indian Chambers of Commerce and Industry, there are five main sectors that can act “as engines of growth” to boost Indo-Africa trade:
- pharmaceuticals and the health sector;
- information technology;
- water management;
- food processing; and
- education.