India’s African safari

Rajrishi Singhal | Updated on January 17, 2018

Dance troupe from South Africa celebrating the Freedom Day, by performing a programme 'African Footprint', organised by the Consulate General of the Republic of South Africa, in Bangalore, on April 28, 2006. Photo: V. Sreenivasa Murthy   -  The Hindu

When geo-economics meets geo-politics

June 2016 has seen an unprecedented intensification of India’s relationship with Africa. In the first week, Vice President Hamid Ansari visited Tunisia and Morocco. In the second week, President Pranab Mukherjee launched his whirlwind tour of Western and Southern Africa, covering Ghana, Cote d’Ivoire and Namibia. And, in July, Prime Minister Narendra Modi will visit Kenya, Mozambique, Tanzania and South Africa.

Ever since the Third India-Africa Forum Summit (IAFS) in 2015, Modi has been building bridges with African countries, soliciting support for a host of multilateral initiatives. It’s also unabashedly about business, a good example of geo-politics meeting geo-economics. For instance, Ansari’s visit to Morocco and Tunisia are key, because India imports phosphate — a critical raw material for fertiliser production — from these countries. Ansari also inaugurated an India-Morocco Chamber of Commerce during his trip to Rabat.

The President’s excursion provided an opportunity for advocacy of India’s business interests. At the India-Ghana Business Forum, Mukherjee said: “If a conducive environment is facilitated, the Indian Government would be ready to work with you in key sectors and areas of common interest and encourage Indian private as well as public entrepreneurs to bring more investments into Ghana.” India’s cumulative investments in Ghana are over $1 billion and two-way trade during 2015-16 amounted to $3 billion.”

Changing times

Simultaneously, there is a strategic shift in India’s development diplomacy for the continent. Exim Bank, for example, is likely to focus more on service exports now, rather than compete with China for infrastructure projects in Africa. Exim Bank is looking to disburse close to ₹10,000 crore in Africa over the next three years as both commercial and concessional credit. Service exports aim to build on India’s traditional strengths in Africa and would include healthcare, education and information technology services.

Exim Bank is also looking to sharpen focus on another area of India’s traditional exports to Africa: project exports. It has requested the RBI to ease regulatory and compliance guidelines regarding minimum equity capital, leverage and the maximum that the bank can lend to a single borrower. 

These actions are in line with promises made during the Third IAFS in October 2015. The first two editions — in 2008 and 2011 — made numerous promises but fell short on follow-up and delivery.

The last summit, held in October 2015, saw a strategic shift in focus it sought to create a global alliance of solar-rich countries. But, most importantly, it also created a formal monitoring mechanism which will meet at regular intervals and review progress of various projects in different stages of completion.

There might be temptations to link the recent high-octane official African engagements with some of the incidents involving African nationals living in India. It ignores the fact that these official visits were planned months ago; that said, personal visits and assurances will surely help assuage some of the concerns regarding India.

It seems that there is finally some recognition of the critical role Africa can play in both India strategic calculus and in its trade and investment expansion plans. Hopefully, this investment energy will not be a one-off spurt.

The writer is a journalist and Senior Fellow (Geo-Economic Studies) with Gateway House

Published on July 03, 2016

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