India entices Africa with generosity to boost trade

India is setting up a diamond processing facility in Botswana. In Uganda, it’s building a centre to train businesses about global markets. In four of Africa’s poorest countries, Indians are helping cotton farmers improve their yields.

Across Africa, India is reaching out with a generous mix of aid, education and technology transfers it hopes will pay rich dividends in the global scramble for natural resources.

Over the weekend, India Prime Minister Manmohan Singh and scores of business leaders flew to Ethiopia for a meeting with African leaders aimed at prying open doors for greater business opportunities.

India’s interest in Africa is not surprising. The country has long-standing ties to the continent and a serious energy shortage for its rapidly growing economy. And it has a rival, China, that has become a major player in many African economies.

While New Delhi insists its goal in Africa is not to counter Beijing’s moves, India clearly wants to broaden its footprint on the continent, trying to make sure its growth is not hobbled by a shortage of raw materials.

India is also looking to Africa to bolster its foreign policy goals, especially its bid for a seat on an expanded United Nations Security Council. New Delhi also wants closer defence ties with African states bordering the Indian Ocean in the fight against terrorism and piracy.

It’s not just about India
Publicly, though, India’s efforts are not only about self-interest.

“India is interested in Africa not just because of its resources; it is also actively participating in the economic development of Africa,” said Shyamal Gupta of the Confederation of Indian Industry.

Indian investments in African countries have been growing at a fast clip, with around 250 Indian companies investing mainly in telecommunications, chemical and mining companies.

But in the past decade, China has plowed billions of dollars into Africa, building roads, bridges, railways and power installations in return for access to markets and resources. China’s trade with Africa is expected to top $110-billion by the end of this year.

India hopes to increase its current $46-billion trade with the continent to $70-billion by 2015. The government is also doubling its credit lines to Africa to $5.4-billion.

New Delhi is particularly interested in energy. India imports around 70% of its oil and is seeking new suppliers in oil-rich Africa. Also, India is looking for uranium to power its ambitious civil nuclear program.

But while India’s goals may be similar to China’s, New Delhi says it has chosen a softer, more nuanced path.

‘Enhancing skills’
Officials in New Delhi stress that India’s links with Africa are centuries-old, with trade well entrenched across the Indian Ocean and buttressed by a million-strong Indian diaspora across Africa. And thousands of Africans have earned degrees from Indian universities and technological institutes on scholarships funded by the Indian government.

Indian officials say New Delhi’s engagement with Africa is focused on helping African companies improve their skills by sharing technology and processing metals locally rather than merely exporting the raw ore.

“India’s commitment to Africa mainly involves enhancing human skills and capacity building,” said Ruchita Beri, an Africa specialist at New Delhi’s Institute for Defense Studies and Analyses.

India’s expertise in information technology, production of inexpensive medicines, and lower manufacturing costs make it an attractive place for African businesses to seek partnerships as they try to modernise and diversify their economies, most of which depend on exporting raw materials.

But India’s outreach also has its critics, who accuse New Delhi of turning a blind eye to corrupt and dictatorial regimes.

Advantage India
India’s state-owned oil company has invested in Sudanese oil, and New Delhi avoided criticising Khartoum at the height of the Darfur crisis.

“India has enjoyed less Western scrutiny over its Africa policy than China,” Alex Vines, Africa expert at the London-based think tank Chatham House, said in a report on India’s engagement with the continent.

Africa’s resources are drawing not just China and India. Apart from the United States and the European Union, Beri says other players are also muscling in, with Malaysia, Brazil and Turkey investing in African countries in return for markets.

But India’s decades of assistance should give it an advantage, Beri said. — Sapa-AP

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