The Indian Economy Blog

April 19, 2008

India – Africa Forum Summit

Filed under: China,Growth,Miscellaneous,Trade — Pragmatic @ 1:07 pm

The first Africa-India Forum summit was held at New Delhi earlier this month. There were several other events organised on the sidelines of the Summit: the first ever India-Africa Editors Conference, joint performances by Indian and African cultural troupes a seminar of intellectuals from Africa and India on India-Africa Partnership in the 21st century, a programme for youth and women from Africa and a business conclave. The summit, which was a culmination of several levels of dialogue, is already being considered a success in many quarters. It is hoped that these events will create an enabling environment for upgrading economic cooperation between India and Africa.

The events had their share of coverage in the mainstream media– Indian, African and western. However, the landmark event deserves much wider appreciation and analysis than provided by the perfunctory news reports covering the events.

On one hand, western analysts tend to see all major Indian initiatives on Africa, including this summit, through the prism of competition between the burgeoning economies of India and China. On the other hand, many African commentators have warned their own leaders about India’s intentions in what they have disparagingly labelled as a “second scramble for Africa”.

The key drivers for this summit and other Indian initiatives on Africa go beyond the traditional factors raised by most analysts. It is not limited to containing or matching Chinese economic interests in Africa or answering India’s impending quest for energy security. Unlike China, India has had a historical relationship with the African continent for centuries, based on trade with the eastern and southern coasts of Africa. The presence of a large Indian diaspora in Africa for over two centuries also provides India with a unique advantage over its Asian neighbour. India’s quest for energy in Africa, unlike China, is not a core component of the Indian government’s energy security policy; rather, it is part of its bid to diversify energy sources.

So what was the rationale for the India-Africa summit, if not mimicking the China-Africa summit last year? It is an obvious indicator of the renewed drive in the India – Africa story. Current global equations and recent Indian policies indicate that India’s engagement with Africa has shifted from the old issues of colonialism, non-alignment and South–South cooperation to issues of trade and economy.

Ever since India’s economic revival in the mid-nineties, India’s foreign policy has been increasingly driven towards finding export markets, attracting foreign capital and know-how. This policy shift is echoed across Africa as most of the economies there are going through economic reforms and liberalisation. The Indian diplomats have been working overtime to garner support for its quest for a seat in the UNSC in the continent. The Indian stand on the western agricultural subsidies at the WTO negotiations has been in consonance with the views of most African nations.

The recent improvement in India’s economic relations with Africa, however, cannot be attributed solely to the new focused approach of the Indian government. Another factor is the ‘outward-looking’ attitude of India’s private sector. Tempted by the easy availability of capital and driven by the search for new markets, Indian companies have been eagerly targeting those regions in Africa, in which they had shown little interest until recently. The economic boom in India and the success of both home-grown and NRI/PIO (Non-Resident Indian/Person of Indian Origin) companies in Europe and parts of South America have given Indian businesses the confidence to venture into Africa.

Indian companies’ increased activities in Africa have spurred the government to link its diplomacy in the continent more explicitly to its economic requirements. The Indian engagement reflects private-enterprise led bottom-up approach of its economy. In tandem with this policy change, India’s commercial ties with Africa have grown as the India-Africa trade volume has increased by 285 percent to 25 billion U.S. dollars in the last four years.

African countries hold India in high esteem – in particular, on account of its democratic institutions and the manner of its economic growth. India, as a democratic developing country, serves as a role model for these countries and is a source of support in various sectors, especially agriculture, services and small- and medium-scale manufacturing. Above all, it is the new image of India -– that of a leader in the information technology industry, biotechnology and telecommunications -– that has attracted Africa to India.

For their part, African political leaders would like their constituencies to believe that India and Africa are making a joint effort to improve the well-being of their peoples and societies. It is here that India’s real influence in Africa will emanate– from its success in achieving sustained economic growth and lifting many out of poverty in a democratic, post-colonial setting. It is for the Indian political and bureaucratic masters to remember that the right message to an external constituency in such an environment will be only delivered by a continued focus on domestic reforms. The Indian leadership will be judged by its African partners on how India progressively tackles various impediments to its economic growth in fields of infrastructure, education, labour and other roadblocks. It is imperative that India is perceived to be addressing its own developmental challenges successfully; only then will others, including Africa, consider it as an attractive and rightful partner for the future.

11 Comments »

  1. Anyway I think we need a preagmatic approach to Africa.
    Lets see the dynamics the west controls africa via the salaries that it pays its governments and other dilapidated institutions.
    The Chinese strategy is to garner influence by paying 2-3 times the going rate and a no questions asked approach as to how its funds are spent.
    We on the other hand should 1.enhance our goodwill with african civil society by playing up our impeccable anti colonial credentials gandhi,our staunch support against appartheid etc and offer them less cash but more in terms of education,local employment(chinese ship their workers from china),peace keepers,technology(we might produce the nano there for instance) etc.
    We may even assist them in acquiring cheap generic versions of drugs etc.
    And lets face it racism moves in both directions and we indians are fairly racist towards africans and people should be educated against it like the fool who wrote the preceeding comment [Admin: we deleted the comment referred to which BTW appeared to come from an European IP address]

    Comment by Shantanu Chatterjee — April 21, 2008 @ 5:56 pm

  2. In my opinion there is one more aspect that differentiates Indian relationship vis-a-vis Chinese. Chinese love for Africa(wrongly or rightly – i dont comment) have been compared with Western, albeit without any frills which usually accompanies Western aid/investment like human-rights,democracy issue etc.

    Indian relationship should be more of equal-partner basis. India faces almost the same social and economic issues as faced by most African nations, may be at lower scale. Our private industries may help them with industrialization resulting in more employment under better/suitable conditions. In fact Tata has already evinced interest of producing Nano in Africa. And our government can showcase Indian culture to highlight the culture values and history that we share with Africa.

    But, one fact that worries me is stand of Indian government on most of socio-political issues facing Africa. What stand do we have on Robert Mugabe? What can we do to help in the food-scarcity crisis (which incidentally we ourselves face)? Should we ignore all this assuming them to be internal affairs?

    Comment by Aashish Sharma — April 22, 2008 @ 2:17 pm

  3. All this talk of treating Africa as an equal partner and engaging civil society is nice.

    But India hasnt even been able to do that in Burma or Nepal, out of fear of Chinese influence.

    So frankly the last couple of posts sound like a fantasy, no offense.

    I can see India’s relationship with Africa being exactly like that of China in the end.

    This seems to be the way things always end up.

    Comment by David Singh — April 23, 2008 @ 11:57 am

  4. Why do we need to apologize for seeing the business potential over there?

    Africa is possibly the next biggest market after the dust settles on the India / Asia boom in the next 15 – 20 years. So what if some call it the “second scramble for Africa”. India offers a unique set of possibilities to engage with Africa which others do not.

    Using the cultural play and other nuanced approaches is our way of distinguishing ourselves from the rest. If it means that we get an advantage in the long term then so be it.

    Comment by Nikhil Nayak — April 26, 2008 @ 11:22 am

  5. Indian diplomacy has always maintained friendly relations with all the countries of the world. This is what makes them a little less aggressive in whatever they do. Hence, no interference in the Chinese policies concerning Nepal and Burma. I am sure they are not going to do much regarding any Afro-Sino conflict or their internal affairs or troubled relations too.

    But that does not mean that India is taking a China-like approach. Even if our interests be majorly mercenary ( and whose aren’t by the way), we have a way to put up a concerned face and in some small amount we are sympathetic to the nation of Africa which has gone through the same shackles of colonialism that we have. So, I see that if these new African-Indian relations are not completely due to the brotherhood, they are not completely devoid of them either.

    Comment by Richa — April 26, 2008 @ 2:07 pm

  6. This is not about India maintaining friendly relations with all or India pursuing economic interest — it’s about the ability to make economic policies politically savvy. A lot of people readily criticize China on its friendship with authoritarian countries. India, as a democracy, is expected to be more sympathetic to human rights concerns. But Indian foreign economic policy has not included that political variable. As a result, India has been as comfortable doing business with Burma as China has. Its economic boom has made its leaders less likely to criticize foreign regimes on human rights and to take a politically strong stance. All these are departures from the traditional moral high ground that Indian leaders of the past used to claim. It is this departure that’s a source of concern for many activists, and complete neglect of it will increase political risk of Indian companies that have significant exposure abroad.

    So, risk mitigation in this case requires that “friends with everyone” is not necessarily a good strategy, and a more politically-polished approach toward courting other countries will pay off economically in the longer run.

    Jalal Alamgir

    Comment by Jalal Alamgir — May 6, 2008 @ 1:27 am

  7. FRANKLY HUMAN RIGHTS as important as they are have been reduced to a political gimmick by the western media why is it that the west’s best friends in the middle east saudi arabia etc are some of the worst human rights violators who are almost never lectured and indeed the west is happy to sell them very sophisticated arms while burma,sudan etc are a weep fest to assuage the west’s concience.please we are not complete idiots.
    ANd may I reming you gentlemen that our only hope at getting a half decent nuclear program lies in non NSG AFRICAN Countries that may be convinced to sell us uranium outside the nuke deal framework.Namibia and Niger are the two countries.

    Comment by Shantanu Chatterjee — May 18, 2008 @ 2:43 am

  8. MORAL highground was a clever strategy to lecture others during the cold war.We were happy to cut deals with appartheid south africa to get diamonds from third parties for our diamond industry in gujrat.We were also practically a soviet client state which paid rich dividends while screwing pakistan in 1971 where we had only 3 votes and the all important soviet veto on our side.So basically our choices were ade by very intelligent practical people who had the country’s sovereignity and independence at heart it is the only reason we have a nuke and space program.the moral lecture was leveraging gandhianism buddha etc to the best of our advantage our calculations are and always have been pretty cold blodeed.

    Comment by shantanu chatterjee — May 18, 2008 @ 2:49 am

  9. Well, I’ve read through all the comments and the article. Be it China or India, its politicians, diplomats and businessmen do their business based upon elaborate calculation on interests the only difference being how to define interests. In this sense, I don’t see great differences between aims of Indian african policies and Chinese ones and even western ones, and the differences lying in approaches only reveal different abilities. I mean, that India doesn’t adopt the China way is more due to the fact it cannot do that than due to that it does not want to do so. In other words, I think it doesn’t have a lot to do with good-will or sth.

    Comment by Vito Shao — June 26, 2008 @ 2:38 pm

  10. Establishment of retail chain bringout both positive and negative results. I would like to commnt on the negative side ,in the longrun monopoly will be created and small traders will vanish from their position as well consumer will not be having any alternative and have to pay more prices. (Paulraj, Guru Nanak college. Mumbai-37)

    Comment by paulraj — September 6, 2008 @ 11:32 am

  11. Retailing itself has gained the most important status in the commercial chain at present. With the advent of tycoons in the retail industry the local retail chain is disturbed, though not much affecting the consumers, but the local retailers suffering. Hence, this matter has to be revived again with their attitude also.

    Comment by Surinder Kaur — September 6, 2008 @ 11:46 am

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