India and Africa: Opportunities and Challenges for Economic Cooperation
November 23, 2016

A crucial component of the India-Africa engagement will be bilateral trade and cooperation. Though India is one of the continent’s major trade partners, it still has a long way to go before realizing its true potential. There are historical and cultural factors that give India a big advantage

By Keshav Vivek / IAT Bureau

Many an expert has spoken of the 21st century being the Asian Century. The how to write a dissertation abstract expression gained popularity after a meeting between Deng Xiaoping of China, and the Indian Prime Minister Rajiv Gandhi in 1988. The booming economies, widening strategic presence and growing soft power of nations like China and India will see Asia take over from Europe and North America. But there is another part of the world which is undergoing a similar transformation — Africa. It has a large and youthful population, governments which are keen to open up their markets for buy essay papers online investment and trade, and a wealth of natural resources.

By 2050, the continent of Africa will account for a quarter of the world’s population. Its youth are expected to drive a cycle of rapid economic growth, job generation, and wealth creation. India, which is expected to emerge as a major player in the coming decades, cannot afford to ignore the opportunities these trends present. A crucial component of the India-Africa engagement will be bilateral trade and cooperation. Though India is one of the continent’s major trade partners, it still has a long way to go before realizing its true potential. There are historical and cultural factors that give India a big advantage.

India on the African Horizon

South Asia and East Africa sit on the Indian Ocean littoral. This has meant a long history of trade between the two regions. India has commercial links with Arabia, East Africa and Egypt dating back to the 1st century of the Common Era. Documents like the Periplus Maris Erythraei recount trade between India, Aksum and Egypt. Roman, Egyptian, Arab and Indian merchants made use of monsoon winds to create a vast Indian Ocean trade network stretching from Syene (Aswan, Egypt) to ports like Barbaricum, Barygaza, Muziris, Korkai, Kaveripattinam and Arikamedu.

Items like gold, ivory, linen, topaz, coral, frankincense, glass and silver vessels were exchanged for herbs, essential oils, spices, silk, cotton, indigo, wheat, rice, turquoise, and lapis lazuli in India. The second link is cultural. Indians have been present in Africa for very long. The beginning of British rule saw people moving from South Asia to East and Southern Africa. Indian communities were established in Uganda, Kenya, Mauritius, and South Africa. Indians and African citizens of Indian descent were supportive of the decolonization process in Africa, providing African leaders and nations, platforms like NAM to voice their concerns.

South-South Cooperation

India is now emerging as an important economic partner for several African nations. The model of engagement between them falls under the rubric of South-South Cooperation. Contrary to the Eurocentric model that created donor-recipient relationships, it placed emphasis on poverty reduction, national development and mutually beneficial trade. These ideas were developed immediately after the decolonization of Asia and Africa in summits like the Bandung Conference (1955). China has been quick to make the most of the growing opportunities presented by a new and assertive Africa unwilling to bend to Western diktats.

India, eager to catch up, has also positioned itself as a partner to Africa unlike the West (stressing on economic, technical and cultural cooperation). It has taken a leaf out of forums like the Forum on China-Africa Cooperation (2000) and New Asian-African Strategic Partnership (2005). United Nations, and platforms like BRICS (Brazil-Russia-India-China-South Africa), and IBSA (India-Brazil-South Africa) Dialogue Forum have allowed it to reach out to African leaders and organizations. Though it has extensive ties with the English-speaking countries of Southern & Eastern Africa it needs to cultivate similar relations with others.

Developing Synergies

The First India-Africa Forum Summit was held in 2008 in New Delhi, India, bringing together 15 nations. This was followed by summits in Addis Ababa (2011) and New Delhi (2015). Interactions with African leaders and Regional Economic Communities outlined the need to focus on 6 major areas – agriculture, trade, industry & investment, peace & security, governance & civil society, information & communication technology. The current estimates for bilateral trade stand at 70 billion USD, and are expected to cross 100 billion USD in the near future. India’s government and private corporations have extended lines of credit (worth 8.5 billion USD), provided development packages, set up training institutes, and pioneered initiatives like the Pan African e Network (for telemedicine & tele-education).

India — Africa Trade Relations: Useful data

 

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Way Ahead

Both regions are on the cusp of major economic, demographic and strategic transformations. Economic reforms have been a tremendous stimulus to the Indian economy. There is a growing demand for crude oil and natural gas to power the rapidly expanding industrial base. India’s own reserves are insufficient and it needs to diversify beyond the Middle East. In fact, energy security has been a driving force for India’s foreign policy. Three of India’s biggest African trading partners are major oil producers, namely Nigeria, Angola and Algeria. Africa has long been a supplier of commodities like copper, cocoa and palm oil. Like India, it struggled to develop manufacturing bases, overcome trade barriers, improve basic infrastructure and secure investments. But times are changing. Hopefully, by cooperating, they will be able to realize their tremendous potential.

(The views expressed in the article are solely those of the author and do not necessarily represent the views of Indiafrica Today)