World Review | The emerging India-Africa economic axis gains momentum

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The emerging India-Africa economic axis gains momentum

The emerging India-Africa economic axis gains momentum
New Delhi, Oct. 29, 2015: the inaugural session of the India Africa Forum Summit with participants from 52 African countries (source: dpa)

AFRICA summits are all the rage these days, including recent ones held by China and the European Union. But the fast-developing cooperation between India and African countries has been notable for several reasons, write World Review Experts Pramit Pal Chaudhuri and Teresa Nogueira Pinto.

The Third India Africa Forum Summit in New Delhi, hosted by Indian Prime Minister Narendra Modi in October 2015, was definitely the biggest summit held with Africa by any non-African country. A record 41 leaders from the 52 member states of the African Union showed up in New Delhi, and every African government that was invited sent a delegation – a rarity at such events.

Also striking was the ambitious framework proposed by India for economic engagement in Africa, which built on and amplified earlier trends. The priority is trade and investment, but with a different twist. At the 2008 forum, India’s then Prime Minister Manmohan Singh pointedly differentiated New Delhi’s approach to Africa from that of both the West and China. “We are not in any race or competition with China or any other country,” he told forum participants. “We don’t seek to impose any pattern in Africa. It’s for the African people to decide on their future … We wish to be partners in Africa’s resurgence.”

India’s dealings with Africa have indeed differed from China’s in several key respects. The most obvious contrast is that Indian construction projects in Africa use local labor, as compared with the standard Chinese practice of bringing their workers with them. And services-oriented India has been far less focused on raw materials and commodities trade than industrialized China. Also, Indian commerce has largely been driven by private companies, while the role of state-owned enterprises or government-to-government deals has been minimal. In promoting private investment in Africa, New Delhi has preferred to offer lines of credit to African governments rather than outright grants.

India’s assistance to Africa is focused on capacity building, especially in skills and education. Among new projects of this kind, the Technical and Economic Cooperation (ITEC) program, under which India has trained thousands of Africans in various occupational skills, and the Pan-African e-Network that India is putting together with the African Union, look particularly promising. The $150 million network for telemedical and tele-education services linking Africa’s major hospitals and universities and providing a secure communications system linking all African leaders, already covers more than a dozen countries.

Cooperation in agriculture is also expected to intensify. African countries have a lot to learn from India’s “green revolution,” especially as regards know-how and technology adapted to tropical climates. India has valuable expertise in increasing agricultural productivity and introducing climate-resilient farming methods.

Healthcare is another sector where Indian-African cooperation can bring above-average returns to both sides. Indian generic drugmakers are known as “the pharmacists of the developing world.”

While New Delhi’s engagement in Africa has been growing, it remains modest when compared with China’s. Yet it can be argued that India has important advantages over China, whose image has been marred by perceptions of neocolonialism, cultural blindness and poor treatment of labor and the environment. Indian-African relations have been gaining momentum at a time when African countries are growing more assertive about their objectives and ways to achieve them.

Currently, India’s financial commitments include $10 billion in concessional credits to African projects over the next five years, plus about $600 million in grants – including a $100 million India-Africa Development Fund and a $10 million Health Fund.

For a more in-depth look at this subject with scenarios looking to future outcomes, go to our sister site: Geopolitical Information Service. Sign in for 3 Free Reports or Subscribe.

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