The Hindu Business Line : Into Africa

Belatedly, Africa is inching its way into the Indian policymaker’s psyche that has for decades been preoccupied with Western markets. At a recent summit on Indo-African trade, the Commerce Minister, Mr Kamal Nath, pinpointed specific areas in which the two countries could benefit. In April, a massive India-Africa summit is planned, with New Delhi pulling out all the stops to strengthen the country’s “historic and time-tested ties’ with Africa.

The timing for a change in the relationship with Africa couldn’t be more problematic than it is today because the competition has got there already. Africa always needed investment and skill development in various fields, just as the developed countries always eyed its resources and markets for their finished goods. It was all about getting a foot in the door, with the best bargain. In the last two decades, no country has moved in as aggressively into Africa’s economic landscape as China has, shedding its ideological shades for market growth on both sides. The IMF now counts China as Africa’s biggest trading partner; trade is at $65 billion and rising 30 per cent annually. What is more, the trade is almost balanced with African exports inching towards Chinese exports. The new twist is the “Baoding village”. Over the decade, more than 750,000 Chinese have settled in urban areas and, more importantly, in farms across Africa, contributing, like the European settlers of old, to the food output of countries such as Namibia and Zambia, among others.

With such aggressive strategies at work, the odds are not only stacked against India but the stakes have also been raised because of China’s strategic commitments; trade backed by massive credit lines, private investments and migration of skilled settlers who are altering the rural landscape more meaningfully than experts flown in by New Delhi or Washington. India’s trade at present does not exceed $20 billion; and for private industry only the more developed parts attract, at best, low-priority, residual investments. To muscle into what is becoming a Chinese monopoly, India needs to think big and plan not just oil-for-IT tactics but an economic intervention on the Chinese scale that has set the ground rules, as it were. India has to do more than claim historic ties or build new ones based on notions of sector-specific competitive advantages, important as they are. New Delhi has to evolve an overarching premise of an Indian presence that is showcased as a better alternative to the Chinese bargain; private industry must pitch tents in parts of Africa that are poor but have potential. Indian interventions have to create markets, not just cater to existing ones. Otherwise trade and cultural shows like the forthcoming April fest are likely to remain just that.

Related Stories:
‘Scope for tie-ups with Africa in farm, food processing’
Technology, agriculture high on India-Africa meet agenda

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