Global Insight Perspective | |
Significance | India is looking to gain access to resources in Africa and balance China's growing influence in the region, while Africa looks to India for development assistance. |
Implications | Both sides are likely to expand trade relations, forge a joint approach in addressing several mutual areas of concern, and seek to raise their profile on the world stage. |
Outlook | As India steps up its engagement with Africa it is likely to come under growing international scrutiny over its policies in the region, and notably its engagement with the region’s pariah regimes. |
The first India-Africa Forum Summit opened in the Indian capital New Delhi today. The two-day summit is being attended by representatives from India and 14 African countries—Algeria, Libya, Egypt, Ethiopia, Uganda, Kenya, Tanzania, the Democratic Republic of Congo, Ghana, Senegal, Nigeria, Burkina Faso, Zambia and South Africa. Of these, 10 African countries will be represented by their heads of state, as well as by the current and future chairs of the African Union Commission. The summit will culminate in the signing of two documents: the Delhi Declaration and the Africa-India Framework for Cooperation. The former will identify areas of common interest to India and Africa, including United Nations reform, climate change, food and energy security, pandemics, cooperation at the World Trade Organization (WTO) and international terrorism. The latter will highlight areas of cooperation between both sides, including on human resources, institutional capacity building, education, science and technology, agricultural productivity, food security, and the development of the health sector and infrastructure.
Speaking at the opening of the summit, India's Prime Minister Manmohan Singh noted that the summit marked a “new chapter in the long history of civilisational contacts, friendship and cooperation between India and Africa”. Dr Singh pledged to provide over US$500 million in development grants to Africa over the next 5-6 years, as well as to double India’s line of credit to the region to US$5.4 billion. Singh also announced a Duty Free Tariff Preference Scheme for Least Developed Countries, under which India will provide preferential market access for exports from 50 of the world’s least developed countries, including 34 countries in Africa. The scheme will cover 94% of India’s total tariff lines. He also proposed the establishment of an India-Africa Volunteer Corps to address development issues in both regions, and doubling student scholarships for African students in India.
Embedded in History
India’s relations with Africa are embedded in their shared history. Trade between the two dates back to the 14th century. During the period of European colonialism these links were strengthened as both regions shared colonial masters. Following independence in 1947 India’s first prime minister, Jawaharlal Nehru, became a leading voice of the anti-colonial struggle in Africa, which was supplemented by the Non-Aligned Movement during the Cold War. Beyond history, the regions share several cultural links through the presence of approximately 2 million people of Indian origin in Africa.
Rediscovered by Trade and Resources
Bilateral trade between India and Africa has grown from US$967 million in 1991 to over US$30 billion in 2007/08, and there are plans to double this to US$50 billion by 2012. Africa’s share of India’s global trade increased from 5.8% in 2002-03 to 8% in 2006-07. African states have sought to learn from India’s development experience, given its rapid growth and success in a number of sectors such as information technology. For instance, the India-backed Pan-African e-Network Project seeks to digitally connect 53 countries of the African Union. Meanwhile, Mauritius is the largest offshore investor in India, while South Africa accounts for two-thirds of Africa’s exports to India. Ore and metals continue to dominate India’s imports from Africa, although uranium may emerge as an increasingly important resource from the region, as India expands its civilian nuclear programme. In February, India announced a 60% increase in aid to Africa over the next financial year to 800 million rupees (US$20 million).
Beyond this, India has looked to Africa to meet its growing energy consumption needs, given that imports account for more than two-thirds of India’s oil consumption and that its energy demands are expected to double by 2030, according to the International Energy Agency. India’s state-owned Oil and Natural Gas Corporation Videsh (OVL) has invested US$2 billion in eight African countries, including Libya, Kenya, Nigeria, Sudan, Cote d’Ivoire and Gabon. Notably Nigeria, which is the region’s leading oil exporter, now accounts for 10% of India’s oil imports.
Cemented by Security and Strategic Concerns
India and Africa are also seeking a larger “voice” on the international stage through greater representation at international forums. Notably, the 53-nation African Union and the G4 group of countries (India, Brazil, Germany, Japan) are attempting to forge a united front in the expansion of the UN Security Council. As the largest bloc of nations at the UN, AU support is pivotal if India is to achieve its goal of a permanent seat on the Security Council.
India has also increased its engagement with Africa through a number of regional and international forums. Last month India hosted the fourth India-Africa Project Partnership in New Delhi, which was attended by over 500 business delegates from 33 African countries. (see India: 20 March 2008: India Hosts Conference of African Countries to Boost Economic Relations with Continent). India has also engaged Africa through several South-South initiatives such as the Non-Aligned Movement, the Asia-Africa Summit, the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), the India-Brazil-South Africa (IBSA) trilateral developmental initiative and the G33 bloc of developing nations at the WTO. India maintains diplomatic missions in 19 of the 47 sub-Saharan countries, with plans to open new missions in Burkina Faso, Niger and Gabon this year.
In the security sphere, the fact that 90% of India’s trade volume comes by sea has prompted it to play a more prominent role in protecting sea-lanes of communication (SLOCs) along the Indian Ocean. As part of this, India has reached defence agreements with several African states along the Indian Ocean Rim, notably Mauritius, the Seychelles, Madagascar, Mozambique, Kenya and Tanzania. India will be holding joint naval exercises with South Africa and Brazil off Cape Town in May, as well as joint naval exercises with the Seychelles this year. India also established its first overseas surveillance facility in Madagascar in July 2007, and also provided relief to African states that were hit by the Indian Ocean tsunami in 2004.
Fuelled by the Dragon
Finally, India has increasingly come to view Africa as a stage for competition with its rival China, which has made considerable inroads in the region in recent years. India’s trade with Africa is dwarfed by China’s, which amounted to US$73.3 billion in 2007. China has pledged to increase this further to US$100 billion by 2010, according to the Xinhua News Agency. In the energy sphere, India has often lost bids for energy assets to China, which now receives one-third of its oil imports from Africa. In securing the winning bid for energy assets in Africa, China has often adopted a more strategic and holistic approach that integrates financial incentives with aid, infrastructure projects, diplomatic incentives and arms packages. For instance, in 2004 China’s Export-Import Bank extended US$2 billion in soft loans to Angola, which led to China’s CNPC winning the bid for a stake in an offshore block over India’s ONGC. Nonetheless, India has publicly denied being engaged in strategic competition with China over Africa. The Indian junior minister for external affairs, Anand Sharma, noted that "India's engagement with Africa is time tested, different and cannot be compared to any other country”.
Outlook and Implications
India's rediscovery of Africa has been fuelled by its pragmatic concerns, namely for meeting resource needs. However, this pragmatic relationship continues to be embedded in shared culture and history. In addition to this a string of shared strategic concerns have brought India and Africa closer together, including the need to address shared security threats emanating from maritime piracy, terrorism, health epidemics such as HIV/ AIDS, climate change and food security.
Nonetheless, India is looking to distinguish its role in Africa from Western states, which were seen to be exploiting the region’s people and resources. In his opening address at today’s summit, Prime Minister Manmohan Singh noted that the India-Africa partnership is “anchored in the fundamental principles of equality, mutual respect and mutual benefit”. The World Bank has noted that Indian companies have a better record than Chinese companies in Africa, with the former generally employing more locals than the latter, which tend to import Chinese labour. China has also been accused of fuelling the region’s instabilities by forming close relationships with pariah regimes such as those in Sudan, Zimbabwe and Angola, and by selling arms to the region. Nonetheless, India’s engagement with many of these unsavoury regimes creates potential for a similar backlash. India maintains energy interests in Sudan, while its trade with Zimbabwe amounted to US$40 million in 2006. So far India has avoided the international scrutiny that China has incurred over its policies in Africa, although this is likely to change as it steps up engagement with the region.