Introduction
So far the debate on the rise of the Asian Giants in Africa has primarily focused on China. Yet, recently India is seen as becoming a significant actor in Africa, although possibly not at the same level as China is presently. India's attractiveness to African countries lies in its ability to produce soft infrastructure including IT goods and pharmaceutical products, the global presence of its corporates like the TATA Group, Mahindra & Mahindra and Acerlor Mittal, as well as its increasing donor role. Some analysts even argue that India's presence makes it an important force in offsetting China's dominance regionally and globally.
Understanding India's deepening involvement in Africa must be seen from the perspective of how the Indian government defines this relationship and the extent to which it is managed on a mutual basis. India's engagement in Africa must also take into account the historical ties between the two sides. Therefore, this briefing focuses on India's growing relations with Africa by assessing the factors that motivate India's increasing relations with Africa. How is this relationship conceptualised? And to what extent does Africa feature in India's global ambitions? Before addressing these questions I provide a brief historical overview followed by an outline of the political and economic dimensions of the relationship.
Historical Ties
Following independence India saw its role in the international system as championing the struggles of anti-colonialism and anti-racism. India played a critical role in the Bandung Conference that led to the emergence of the non-aligned movement and used the occasion to promote and strengthen Asian-African solidarity. According to Muni, 'Afro-Asian countries became the principal arena for India's policy and diplomacy during the 1950s' (1991:862).
But Africa was gauged to have a significant role in Prime Minister Nehru's vision of creating a just international order. For Nehru an independent Africa was seen 'as an important component of the non-aligned force that he was attempting to create in order to minimize the effects of the Cold War' (McKay, 1963:184). The large India diaspora living in the continent was also one of the factors that influenced this engagement.
But India's engagement with Africa was also motivated by its border dispute with China in 1962. Confronted by Africa's mixed reaction to the conflict, New Delhi was forced to realise that it 'did not have the strong ally it had hoped for in Africa and it therefore actively worked towards countering Chinese penetration in Africa' (Serpa, 1994:187). This saw India not only increasing its support to liberation struggles in southern Africa, but also expanding 'economic co-operation with participation of Indian settlers' (Serpa, 1994:187).
This led to the launch of Indian Technical and Economic Co-operation (ITEC). ITEC emerged as a result of a meeting in 1963 convened by the Indian government's heads of its trade missions from Africa and West Asia to examine ways to improve economic and technical co-operation with the continent. ITEC remains to this day an integral component of India's Development Initiative delivering development assistance to Africa and elsewhere.
Whereas India's foreign policy during the cold war was mainly guided by Nehruvian principles, the end of the cold war compelled policy mandarins in Delhi to consider how its foreign policy should be reshaped to take into account the new impulses of the global arena. For much of the cold war India's regional and domestic pressures made it inward looking. However, with economic liberalisation in the 1990s, India's policy-makers realised the importance of a foreign policy that resonated with its economic ambitions. Opening up to overseas investment also meant strengthening external relations that could help to realise its political and economic potential. The shift in foreign policy from the early 1990s was reflected in the annual reports of the Ministry of External Affairs which emphasised that
in the future, new relationships based on concrete economic, technological and educational cooperation will assume enhanced significance (quoted in Singh, 2007:10).
India's current foreign policy relations toward the continent are about reinventing and rejuvenating the old relationship. According to official documentation, India's contemporary Africa policy is aligned to a confluence of interests around justice in the global order levelled at increasing the leverage and influence of their respective global positions and promoting a new international order.
Therefore, while India's post-cold war foreign policy remains aligned to the principles of non-alignment and South-South co-operation in response to the unilateral character of the international order, it has become conscious of its needs to sustain its economic liberalisation. And just as in the past, relations with Africa and the South are now based on shared mutual interests to fight against the inequities of the global order though this time, directed against under-development and poverty as a result of an unbalanced global economic system but also aimed at 'finding export markets, and attracting foreign capital and technological know-how' (Singh, 2007:10). It is to these economic and developmental concerns that I now turn.
Broadening Economic Horizons: The Quest for Energy Security
India too has discovered that Africa is where the resources and future markets that will fuel its economic growth are (The Nation, 9 February 2007).
J. Peter Pham and others argue that the unprecedented concern with China's deepening involvement across the continent has enabled India's growing interests in Africa to go largely unnoticed. According to Pham (2007:1), India's Africa strategy is based on the 'quest for resources, business opportunities, diplomatic initiatives and strategic partnerships', which is seen in the emerging trade, investment and developmental assistance relations that Delhi is crafting with African countries.
As the map (over) illustrates, oil and gas indicates an overriding occupation in achieving India's energy security. With having only 0.4% of the world's proven oil reserves and no significant discoveries since the 1970s, India's oil needs have to be sourced externally. Future projections are that by 2030 India is expected to become the world's third largest consumer of energy bypassing Japan and Russia (Madan, 2006).1 Presently India imports about 75% of its oil needs and this dependence is projected to rise to over 90% by 2020. With Delhi currently relying on the Middle East for most of its oil needs and given the volatility of the region and dominance of the US therein,
it is understandable that India would seek an alternative supply of energy in the burgeoning African sector (Pham, 2007:2).
Compounding the situation is the projection that India will also run out of coal, the primary source of its current energy needs, over the next 40 years. But the poor quality of the coal, the lack of proper infrastructure to remedy the environmental threat this sector poses, and notwithstanding corruption and poor productivity that plague the industry forces India to seek alternative energy lines. Hence, India's strategy is
an integrated set of policies to balance foreign policy, economic, environmental, and social issues with the rising demand for energy (Madan, 2007:3).
And to this end, India's energy footprint in Africa is becoming increasingly apparent. The Indian state-owned Oil and Natural Gas Company (ONGC) has in recent years managed to secure exploration contracts and other related energy projects in the continent through its international division ONGC Videsh (OVL). Table 1 (opposite) provides an overview.
In 2005 OVL entered into a joint venture with LNMittal Steel (now Arcelor Mittal), the world's largest steel MC, to form ONGC Mittal Energy Ltd. (OMEL). OMEL entered into US$6bn infrastructure deal with Nigeria in exchange for two off-shore acreages. Other ONGC Videsh Ltd. (OVL) activities in Africa include:
A 23.5% interest in Ivory Coast's offshore bloc CI-112;
A 49% participating interest in two onshore oil exploration blocks in Libya;
A concession agreement to explore for oil in Egypt's North Ramadan Block; and
Identified oil and gas properties in Gabon with potential investments of over US$500m.
Apart from energy and gas, Indian companies have also been involved in uranium exploration activities in Africa.
Recently the Niger government issued 23 permits to three Canadian firms, three British firms and an Indian company called Taurian Resources Pvt. Ltd. to explore for uranium in the southern part of the country. Between them the firms have invested a total of US$55m for exploration activities over three years (Massalatchi, 2007). For India, obtaining uranium exploration rights will be important to fuel its civilian nuclear programme that is geared towards providing options for clean energy resources. But critics fear that the acquisition of such deposits will be used to strengthen India's military nuclear programme.
India's diversification of energy sources has been noted in a recent report which asserted that the government is moving towards creating an energy panel that will deliberate ways of tapping into and consolidating India's oil interests in regions that are becoming important suppliers (Dutta, 2007). This was demonstrated in June 2007 when the Indian Foreign Minister Anand Sharma led a delegation to Angola. During the meeting both sides expressed interest in signing accords in the areas of oil, geology and mining, agriculture, health, education and tourism. Regarding oil prospects, India saw great possibilities in Angola as a supplier and there was also talk of New Delhi engaging in the construction of a refinery.
| Country | Indian Company | Type of Investment | Size of Investment |
|---|---|---|---|
| Nigeria | Oil & Natural Gas Corp (ONGC) | Oil pipeline | Not stated (25% stake in the Greater Nile Petroleum Oil Company (GNPOC) project |
| Sudan | Oil & Natural Gas Corp (ONGC) | Oil production | Not stated (24% share in Block 5A & 24% share in Block 5B) |
| Sudan | Oil & Natural Gas Corp (ONGC) | Oil refinery | US$1.2bn |
| Sudan | Oil & Natural Gas Corp (ONGC) | Multi-product export pipeline | US$200m |
| Sudan | Oil & Natural Gas Corp (ONGC) | Oil pipeline (part of the Greater Nile Petroleum Operating Company) | US$750m |
| Source: Various newspaper articles |
| Country | Indian Company | Type of Investment | Size of Investment |
|---|---|---|---|
| Côte d'Ivoire | Unknown (various companies acting as a consortium) | Oil prospecting | US$1bn |
| Nigeria | National Thermal Power Corp (NTPC) | Liquefied natural gas | US$1.7bn |
| Nigeria | Indian Oil Corp (IOC) | Oil refinery | US$3.5bn |
| Nigeria | Indian Oil Corp (IOC) | Liquefied natural gas (LNG), plant & oil refinery | US$2-US$4bn (proposed) |
| Nigeria | Oil India | 25% stake in Sunetra Nigeria OPL 205 Ltd. | |
| Gabon | Oil India | 45% stake (including operatorship) in an onshore block | |
| Sudan | Videocon Group | Oil Prospecting | US$100m (76%stake) |
| Source: Various Newspaper Articles |
The Trade & Investment Dimension
India's evolving engagements across the continent is captured through its increasing trade relations with Africa. While some analysts perceive India as 'sleepwalking in Africa', especially in terms of its trade partnership, signs are that Delhi is awakening to the reality that Africa is a strategic market. India-Africa trade has jumped from US$967m in 1991 to over US$9.5bn in 2005 (Sorbara, 2007). For the period April 2006 to January 2007, India's trade with the continent was estimated at US$19.3bn. In 2006, exports to Africa (see below) amounted to US$9.4bn while imports from the continent were US$12.5bn. Total trade with the continent reached US$25bn in 2006. According to Ahmed,
in the past five years, India's exports to Africa grew by 120%, compared to 76% export growth with the world (2006:1).
Yet in spite of this impressive growth in exports, Africa's share of India's global exports trade remains negligible despite India's export market shifting southwards. Out of a total of US$103bn for the FY 2006, Africa constituted 7% of Delhi's export market whereas Asia and Oceania constituted the lion's share of 47% (www.eximbankindia.in).
Indian exports to Africa consist mainly of manufactured items (49%), chemical products (11%) and machinery and transport equipment (10%) (Ahmed, 2006:1). Ahmed notes that 'the main products exported include machinery and transport equipment, petroleum products, paper and wood products, textiles, iron and steel, plastic and linoleum products, rubber manufactured products, agro products, chemicals and pharmaceutical products' (Ibid.). In terms of the main export partners, South Africa features prominently with exports totalling US$2bn in 2006, followed by Kenya with US$1.3bn, Nigeria at US$936m, Egypt at US$739m and Mauritius with US$539m.
| 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |
|---|---|---|---|---|---|---|---|---|
| World | 35,444.90 | 42,299.46 | 43,314.17 | 49,299.31 | 57,457.17 | 75,630.61 | 99,650.64 | 121,259.30 |
| Africa | 1,914.38 | 2,185.46 | 2,772.98 | 2,887.72 | 3,503.42 | 4,772.53 | 6,874.88 | 9,484.65 |
| COMESA | 906.70 | 1,036.04 | 1,323.52 | 1,151.56 | 1,447.91 | 1,949.28 | 2,563.13 | 4,248.40 |
| SADC 14 | 663.20 | 725.74 | 718.05 | 839.30 | 1,064.04 | 1,585.95 | 2,328.99 | 3,508.91 |
| Source: World Trade Atlas available on Tralac website |
On the other hand, Indian imports from Africa are mainly primary goods. In 2006 oil was the largest import followed by gold. As Table 4 (opposite) indicates, other mineral commodities also dominate the import flows. Nigeria was the largest import partner for India in 2006. Imports totalled US$5.6bn followed by South Africa with US$2.5bn, Egypt at US$1.4bn, Algeria with US$532m and Morocco at US$517m.
India's trade relationship with Africa is being promoted through various political and economic initiatives. In the 1990s, while still undergoing its economic reform process, the Indian government was
closing down missions in Africa as an economic measure, today it has twenty-five embassies or high commissions on the continent with four others scheduled to open over the next few years (Pham, 2007:2).
Not only is the Indian Ministry of External Affairs scaling up its diplomatic initiatives by creating three joint secretaries to manage the three regional divisions covering the continent (Ibid.), but this is being complemented by the Confederation of Indian Industries (CII) and the Export-Import Bank of India (EIBI), to which I now turn.
India-Africa Partnership Project
In November 2005 the EIBI together with the Confederation of Indian Industry (CII) organised a Conclave on an India-Africa Partnership Project entitled 'Expanding Horizons', aimed at deepening economic ties with the continent. Approximately 160 delegates from 32 African countries attended the conclave at which over 70 projects, estimated to more than US$5bn, were discussed. This was followed in October 2006 by another meeting where over 300 African participants and 375 Indian business people attended and discussed over 300 projects worth US$17bn. As Baldauf notes, among the 350-member African delegation visiting the 2006 Conclave Meeting, 'Togo topped the list of investment seekers, requesting $4.6bn' followed by 'South Africa's $4bn request, Ghana's $3.7bn, and Nigeria's $2.6bn' (The Christian Science Monitor, November 2006).
| Commodity | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 |
|---|---|---|---|---|---|---|---|---|
| Oil | 46.3% | 24.1% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 61.3% |
| Gold | 23.1% | 25.5% | 39.9% | 49.4% | 49.4% | 37.8% | 39.0% | 12.9% |
| Phosphate | ||||||||
| chemicals | 13.3% | 15.8% | 20.3% | 15.7% | 14.4% | 17.4% | 17.2% | 6.5% |
| Nuts | 4.3% | 7.7% | 4.0% | 6.3% | 7.7% | 10.0% | 8.4% | 2.9% |
| Copper Ores | 0.2% | 0.2% | 0.5% | 0.5% | 0.6% | 0.6% | 0.2% | 2.1% |
| Source: World Trade Atlas available on Tralac website |
In 2007 the Conclave Partnership Project was extended to three regional meetings that took place in Ivory Coast, Mozambique, and Uganda - countries chosen as important gateways into their respective regions. According to the press release, it was very clear that the meetings served to strengthen business linkages established at previous meetings as well as to enable Indian businesses to identify strategic sectors for investments and joint ventures, further augmenting India's bilateral trade and investment ties. The targeted sectors looked like a shopping list2 and included almost all sectors that are considered as catalysts for Africa's development. Twenty Indian companies from the targeted sectors participated in the Regional Conclave, each of them having submitted profiles to the Indian mission so that they could be placed in the sector that dovetails with their focus and region.
Focus Africa Programme
The Focus Africa programme was launched as part of the EXIM Policy 2002-2007 strategy of the EIBI. Through this programme the Indian government provides financial assistance to various trade promotion organisations, export promotion councils and apex chambers in the form of Market Development Assistance. So far the total operative lines of credit extended to sub-Saharan Africa by the EIBI is over $550m (The Nation, February 2007), targeting regional blocs like ECOWAS and COMESA.
In May 2006 EIBI extended a $250m LOC [lines of credit] to the ECOWAS Bank for Investment and Development, to finance Indian exports to ECOWAS member states (The Nation, February 2007).
In terms of the COMESA region, operative lines of credit included US$5m each to the Eastern and Southern African Trade and Development Banks (PTA Bank), the Industrial Development Bank Ltd. (Kenya) and the East African Development Bank (EADB). These LOCs are seen as strengthening and expanding export trade between the respective regions and India through deferred payments terms and should be interpreted as part of the India-Africa Partnership project aligned to the Conclave Meetings discussed above.3
The Indian government has also embarked on a set of initiatives to enhance its economic and political co-operation with Africa. These include:
US$200m line of credit to NEPAD under the India-Africa Fund designed to promote African economic integration;
US$500m line of credit for the Techno-Economic Approach for Africa-India Movement (TEAM-9) which is an initiative with 8 Francophone countries;4
US$1bn investment in a joint venture with the African Union to build a Pan African e-Network to provide tele-medicine and tele-education through integrated satellite, fibre, and wireless connectivity;5
Letters of intent signed between the State of Andhra Pradesh and Kenya and Uganda to send 500 Indian farmers to cultivate land in the respective countries.6
Footprint of Indian Companies
Indian Companies are also beginning to make significant strides across Africa's non-oil resources. In Zambia, Vendanta Resources has a US$750m copper mining investment; in Liberia and Nigeria, Arcelor Mittal has a US$900m management project of iron ore reserves and US$30m (with 80% stake in Nigeria based Delta Steel Company) steel refinery respectively.
| Year | Name of source company | Destination (host country) | Industry | No.of projects | Investment value (US$m) |
|---|---|---|---|---|---|
| 2002 | Veronica Labs | Kenya | Pharmaceuticals | 1 | n/a |
| 2002 | Indian Oil | Mauritius | Energy | 1 | n/a |
| 2002 | Mahindra & | ||||
| Mahindra (M&M) | South Africa | Automotive OEM | 1 | n/a | |
| 2002 | Tata Group | South Africa | Metals/Mining | 1 | 40 |
| 2002 | Hidesign | South Africa | Textiles | 1 | n/a |
| 2002 | Infosys Tech | Mauritius | IT and software | 1 | 25 |
| 2003 | Aditya Birla | Egypt | Plastics & Rubber | 1 | n/a |
| 2003 | Hindusthan Seals | Egypt | Plastics & Rubber | 1 | n/a |
| 2003 | KK Birla Group | Egypt | Chemicals | 1 | n/a |
| 2003 | LML | Egypt | Other Transport OEM1n | 1 | n/a |
| 2003 | ONGC | Libya | Energy | 1 | 30 |
| 2003 | Hindusthan Seals | Morocco | Plastics & Rubber | 1 | n/a |
| 2003 | Bank of India | Kenya | Financial Services | 1 | n/a |
| 2003 | Infosys Tech | Mauritius | IT & Software | 1 | 10 |
| 2003 | Tata Group | South Africa | Metals/Mining | 1 | 53 |
| 2003 | State Bank of India | South Africa | Financial Services | 1 | n/a |
| 2003 | Bharat Biotech | South Africa | Biotechnology | 1 | n/a |
| 2003 | Ramco Systems | South Africa | IT and Software | 1 | 10 |
| 2003 | Bank of Baroda | Tanzania | Financial Services | 1 | n/a |
| 2003 | Hindusthan Seals | Tanzania | Plastics and Rubber | 1 | n/a |
| 2004 | Indian Oil (IOC) | Mauritius | Energy | 1 | n/a |
| 2004 | Indian Oil (IOC) | Mauritius | Energy | 1 | 1 |
| 2004 | Indian Oil (IOC) | Mauritius | Energy | 1 | n/a |
| 2004 | HDFC | Mauritius | Business Services | 1 | n/a |
| 2004 | Tata Group | Mauritius | Hotels, tourism & leisure | 1 | n/a |
| 2004 | Hinduja Group | Mauritius | IT & Software | 1 | n/a |
| 2004 | Mahindra & Mahindra (M&M) | South Africa | Automotive OEM | 1 | n/a |
| 2004 | Usha Martin | South Africa | IT & Software | 1 | n/a |
| 2004 | ICICI Bank | South Africa | Financial Services | 1 | n/a |
| 2004 | Indusind Bank | South Africa | Financial Services | 1 | n/a |
| 2004 | Syndicate Bank | South Africa | Financial Services | 1 | n/a |
| 2004 | Teledata Informatics | South Africa | IT & Software | 1 | n/a |
| 2004 | Hatsun Agro Product (HAPL) | Seychelles | Food and Drink | 1 | n/a |
| 2004 | Dabur | Nigeria | Consumer Products | 1 | n/a |
| 2004 | ONGC | Sudan | Energy | 1 | 200 |
| 2004 | Indian Oil (IOC) | Nigeria | Energy | 1 | n/a |
| 2005 | Bank of India | Tanzania | Financial Services | 1 | n/a |
| 2005 | Mahanagar Telephone Nigam (MTNL) | Mauritius | Telecom equipment | 1 | 23 |
| 2005 | Metropolis Health Services Group | Kenya | Pharmaceuticals | 1 | n/a |
| 2005 | ONGC | Egypt | Energy | 1 | n/a |
| 2005 | Tata Group | Morocco | Chemicals | 1 | n/a |
| 2005 | Tata Group | Morocco | Automotive OEM | 1 | 25 |
| 2005 | National Thermal Power (N PTC) | Nigeria | Energy | 1 | 1.7 |
| 2005 | Bharti Group | Seychelles | Telecom Services | 1 | 8 |
| 2005 | Tata Group | South Africa | Automotive OEM | 1 | n/a |
| 2005 | Tata Group | South Africa | Automotive OEM | 1 | n/a |
| 2005 | Murugappa Group | Tunisia | Chemicals | 1 | 180 |
| 2005 | Numeric Power Systems | Mauritius | Electronics | 1 | n/a |
| Source: UNCTAD 2007; Asian FDI in Africa Repor |
The Tata Group has the most extensive presence in the continent. Operating in Ghana, Mozambique, Malawi, Namibia, South Africa Tanzania and Uganda, the Group claims to employ over 700 people in Africa. According to the Group's profile, their activities range from infrastructure development, energy and hospitality services to financial, communication and automotive outputs. The following are some of the investments made by the company:
US$800m renovation of the Taj Pamodji Hotel in Lusaka;
A vehicle assembly plant at Ndola in Zambia;
US$108m high-carbon ferro-chrome plant at Richards Bay in KwaZulu Natal, South Africa;
Construction of a US$12m instant coffee processing plant in Uganda;
Provision of 250 buses to the DRC at a cost of US$46,000 per bus;
An US$18m export order in 2005 to supply 350 buses to Senegal.
Indian companies have also begun to invest in Africa's infrastructure as a way of cementing their commercial and commodity presence in the continent. For example, Rites Railway and Ircon, the two large state-owned infrastructure and engineering companies, have been making inroads into Africa's rail and road development sector through projects and concessions for several years.
Rites has refurbished and leased locomotives in Sudan and Tanzania, whilst supplying technical assistance to rail authorities in Kenya and Mozambique. Rites have also been involved in design and construction of roads in Uganda and Ethiopia. Ircon has constructed railways in Algeria and (currently) in Mozambique, and has also been active in the rail sectors in Sudan, Nigeria and Zambia (Bonnet, 2006:17).
Indian companies are also queuing up to take advantage of Africa's significant investments in power transmission projects. Companies, like Kalapataru Power Transmission Ltd. already have a presence in Zambia and is expecting to acquire a major contract worth US$35m in Algeria; in Kenya, a rural electrification project for the Ministry of Energy and also in Kenya, for the Kenya Power Lighting Company; supplying material to the Tanzania Electricity Company (Tanesco); a project for the Ethiopian Electric Power Corporation which links to the Ethiopia-Dijbouti interconnection funded by the African Development Bank. According to the company's director, Africa is an area for rich pickings:
All these countries are rich in resources such as oil, gas and metals. Therefore when global prices of the resources increase, these countries make more money. Their investment in infrastructure projects has also increased exponentially … (Wadke, 2007:1).
KEC International Ltd. is another transmission company that has a presence in Algeria, Tunisia, Libya, Kenya, Zambia, Nigeria, Ethiopia and Ghana. The overview below contextualises the outreach of Indian firms beyond the resource sector in the continent:
Overseas Infrastructure Alliance Pvt Limited signed a contract with the Ethiopian government to supply US$65m worth of electrical equipment;
Mashuli Gashmani Ltd. is planning to open an US$18m commercial prawn fishery in Uganda;
US$31m contract awarded to Ircon International by the Ethiopian government for the construction of 120km of roads;
Concession to Ircon International for the rehabilitation of the 600km Beira railway in Mozambique;
US$40m contract to KEC International for the construction of a 132 Kv power project in Ethiopia;
US$1 1m contract to Kamani Engineering Corp for the construction of a transmission line between Zambia and Namibia;
A railway rehabilitation project by Rites International in Huila Province, Angola;
Fouress Engineering has been managing a power plant in Uganda;
BHEL is involved in the construction of a 500w thermal power plant project in Kosti, Sudan that is worth US$457m of which the Indian government has extended a US$350m concessional loan towards the project;
Bharat Electrical is currently involved in the rehabilitation work at Zambia's Kafue Gorge;
Glenmark Pharmaceuticals has acquired South Africa's Bartlett Bouwer;
Ranbaxy Laboratories has recently joined up with Lupin Labs to market its tuberculosis drugs in North and West Africa while the company has established a presence in Egypt, Nigeria, Senegal, South Africa, and Zimbabwe;
Rites Railway has been appointed as consultants on a road project in Ethiopia;
Indian investors are engaged in the cut flower industry in Ethiopia;
US$3.6m investment by Alembic in a manufacturing plant in Nigeria with Xemchem International Inc, a US research firm.
Prospecting rights for iron ore reserves by Taurian Steel in Ivory Coast.
The presence of Indian companies in Africa is surely going to rise in the future. Between 2002 and 2005 Indian firms topped the list of Greenfield FDI projects in Africa at 48 compared to 32 from China (UNCTAD, 2007). This indication, underpinned by the increasing global presence of Indian firms,7 signals that India is becoming a significant player in the African market. With India being one of the 24 non-African members of the African Development Bank8 this footprint is also being propelled by the recent green light given to Indian firms to bid for US$4.6bn set aside by the Bank for infrastructural development projects.
More than Business …
Apart from the business investments, India has also become a significant development partner to the continent. Under its Indian Technical and Economic Co-operation (ITEC) programme, it has provided more than US$1bn worth of technical assistance and training of personnel. Moreover, in 2005 India became the first Asian country to become a full member of the African Capacity Building Foundation (ACBF)9 and pledged US$1m towards the foundation's sustainable development and poverty alleviation capacity building initiative.
In addition, India has contributed to UN peacekeeping operations in Africa. According to the Ministry of External Affairs, India is the largest contributor of peacekeepers to the continent with 3,500 troops in the DRC10 while the 1,400 Indian military contingent constitutes the largest contribution to The UN Mission in Ethiopia and Eritrea. Apart from providing peacekeepers India has also supplied UN peacekeeping missions with helicopters, medical and communication equipment. India has also joined the HIPC II initiative and to date has written off debts totalling US$24m to Mozambique, Tanzania, Uganda, Ghana and Zambia. Other aspects of India's humanitarian assistance to the continent include:
Food donations to Namibia in 2003 as well as to Chad and Lesotho in 2004;
200,000 mosquito nets to the Republic of Congo;
Construction equipment and materials to the Seychelles as part of the reconstruction process following the Tsunami.
In addition, given India's comparative advantage in pharmaceuticals, industry stakeholders and companies are looking toward the continent as an important sphere for collaborative exchanges. Considering the continent's battle with the HIV/AIDS pandemic and other infectious diseases (like malaria), linkages with Indian pharmaceutical companies will be critical in finding a vaccine and other medical breakthroughs in combating such illnesses.
Conclusion
So far the discussion has illustrated that India's political and economic footprint across the continent cannot be ignored. As this trajectory deepens, academics are asking how India's relationship with Africa should be interpreted. Does it make it a 'scrambler' or is a 'development partner'? This is an aspect that will need to be monitored carefully in the future as the engagement matures. But it also depends how African countries define their relationships with New Delhi that will determine how India is preceived as a 'scrambler' or as a 'development partner'.
Certainly India's engagement in Africa has raised some significant issues for the way traditional development partners have managed their relations with African states. Moreover, with the China factor preoccupying the discourse, India's increasing traction in the African market is being negotiated in a muted way. Not only is the competition emerging between traditional powers on the one hand and emerging powers on the other, but there is also a very real rivalry that is being set in motion between China and India as each deepens their economic interests across the continent.