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India can look to to quadruple its revenues from Africa to $160 billion by 2025 by developing its presence in sectors such as IT services, agriculture, infrastructure, pharmaceuticals and consumer goods.
According to the McKinsey report, ‘Joining Hands to Unlock Africa’s Potential A New Indian Industry-led Approach to Africa’ organised at a CII conclave, India can aspire to capture almost 7 per cent of the IT services market, 5 per cent of the FMCG space, 10 per cent of the power sector, and 2-5 per cent of the agri-allied services.
The report also notes that Indian industry needs to continually engage with governments and businesses, proactively.
Noel Tata, Chairman, CII Africa Committee, said: “We believe India’s strengths and experience of operating in similar capital constrained conditions will be of great value to Africa. Africa needs constructive foreign investment and holds the promise of long-term business for India.”
The report notes that as African nations continue to grow, they need constructive foreign investment. Indian industry, as a “solutions-partner” to African nations, could greatly contribute to their development– creating employment, spearheading talent and skill development, and developing infrastructure.
Rajat Gupta, Director, McKinsey & Company said, "IT services, agriculture, infrastructure, pharmaceuticals and consumer goods - these are the key to India boosting Africa revenues 4x to $160 billion by 2025"
Barnik Chitran Maitra, Partner, McKinsey & Company, said: "In a partnership of equals, Indian industry could build relationships with African governments and businesses, identify opportunities through sector and country studies, develop an open consortium of interested companies in advance and ensure cost-efficiency through funding from low-cost countries (like Japan) for large projects."
The report also pointed that Africa poses multiple challenges to Indian companies looking to invest there. Challenges in Africa are inherent to any emerging market and include a fragmented opportunity with unfamiliar risks, infrastructure bottlenecks, lack of talent and a nascent financial services sector.
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