Pambazuka News

India stepping up the ante in African relations

Sanusha Naidu

2010-03-25, Issue 475

'How is India’s relationship with Africa different?', asks Sanusha Naidu. She demonstrates that the latest conclave on the India-Africa Project Partnership – during which India emphasised its focus in Africa to be on capacity building, training and private sector development – revealed that African delegates felt that India is more a stakeholder than a shareholder on the continent. But Naidu suggests that Africa needs to critically examine India’s involvement. She concludes that: ‘For there to be an effective partnership, developing a dialogue between civil society, government and business would be a valuable platform to make this engagement different from the others.’

From the 15-16 March 2010, the Confederation of Indian Industries (CII), together with the EXIM Bank of India and with support from the government of India, hosted the sixth Conclave Meeting on the India-Africa Project Partnership in New Delhi. Entitled ‘Developing Synergies: Creating a Vision’, the conclave was a significant gathering of almost 1,000 delegates, with about 380 participants, representing 34 African countries to discuss business transactions and about 150 project investments to the value of approximately US$10 billion. This made it one of the largest meetings between political leaders and captains of industry from India and Africa.

While such conclave meetings are not new – there have been five such gatherings hosted previously in India and across various regions of the continent – what marks this meeting as important is that it was hosted as a precursor and intended roadmap to New Delhi’s second India-Africa Forum Summit (IAFS) scheduled to be hosted next year. And it follows closely on the joint action plan between Africa and India launched a week earlier to follow-up and assist in the implementation of the 2008 India-Africa Summit outcomes.

Guided by the objectives of the 2008 Summit, the conclave meeting focused on four sub-themes: Partnership, rural economies, Africa tomorrow and going green.
Clearly this meeting was aimed at powering India’s public and private sector ambitions and footprint in Africa.

Total trade (including both exports and imports) with African countries as a whole rose from US$24,986 billion in 2006-07 to $34,663 billion in 2007-08 and to $39,542 billion in 2008-09 according to the minister of state for commerce and industry, Jyotiraditya M Scindia.

India's exports to Africa rose from $10,269 billion in 2006-07 to $14,192 billion in 2007-08 and to $14,813 billion in 2008-09. Imports from African countries also rose from $14,716 billion in 2006-07 to $20,471 billion in 2007-08 and further to $24,728 billion in 2008-09.

As officials at the conclave commented, this has become a ‘platform to help create a long-term vision for economic engagement between Indian and African economies’. Of course this long-term vision is to increase the trade dynamic to around $70 billion by 2015, from the original assertion made at the 2008 Summit of doubling trade from $25 billion to $50 billion in 2011.

While the usual platitudes were made in the inaugural address delivered by the external affairs minister, Shri S.M. Krishna, about how ‘the India-Africa relationship has evolved and matured into a vibrant one’, there was an interesting thread that seemed to underscore the meeting.

It became abundantly clear that the Indian officials sought hard to make this meeting more about India’s engagement in Africa and less about the Elephant following the Dragon’s tail in the African landscape. This was indeed the tone of Minister Tharoor’s speech in unveiling India’s model of engagement in Africa.

Distinguishing that India’s unique model of engagement with the continent revolved around capacity building, training and private sector investment, Minister Tharoor implicitly affirmed that New Delhi’s engagement in Africa is ‘agenda free’. Minister Tharoor went on to say the following: 'We do not wish to go and demand certain rights or projects or impose our ideas in Africa. But we do want to contribute to the achievement of Africa's development objectives as they have been set by our African partners’.

This was firmly backed by Minister Krishna in his opening address where he confirmed that ‘India will establish 19 institutions to develop human resources and capacities in Africa under the decisions of the IAFS. These will include the Africa-India Institute of Foreign Trade, Africa-India Diamond Institute, Africa-India Institute of Information Technology and Africa-India Institute of Education Planning and Administration [and] also create 10 vocational training institutions and five human settlement institutes.’

Yet, in what became veiled attempts at trying to invoke that China’s engagement in Africa is merely profit-seeking and that India’s relationships in Africa are singularly driven by a development-centric focus, one could not help but notice that New Delhi was feeling the dragon’s fire breath. Perhaps this is because these meetings follow closely on the heels of Beijing’s Forum on China-Africa Cooperation held last November in Egypt.

What was even more intriguing about this conclave meeting was the view that the private sector alone could be the engine to stimulate and address Africa’s development needs.

It would, therefore, be naïve to suggest that this meeting was not fuelled by trade, investment and aid opportunities and interests; or for that matter by the need for resource security. With India’s economy predicted to grow by an average of more than 5 per cent for the next 25 years and with the country set to become the world’s third largest consumer of energy products by 2030, its national oil companies like Oil and Natural Gas Corporation, Indian Oil Corporation, Oil India, Essar Oil and Reliance have chalked up significant investments across the continent.

With these measures in place this trend is likely to grow as the footprint of India Inc. can be seen and felt across the continent. Investment in Africa by India’s private sector companies – dubbed ‘global industry shapers’ – totals about US$5 billion and is led by the Tata Group, Ranbaxy Laboratories and Kirloskar Brothers. Some of these include the following:

- Overseas Infrastructure Alliance Pvt. Ltd signed a contract with the Ethiopian government to supply US$65 million worth of electrical equipment.
- Mashuli Gashmani Ltd is planning to open a US$18 million commercial prawn fishery in Uganda.
- A US$31 million contract was awarded to Ircon International by the Ethiopian government for the construction of 120km of roads.
- A concession was given to Ircon International for the rehabilitation of the 600 km Beira railway system in Mozambique, which was completed in February 2010
- A US$40 million contract was awarded to KEC International for the construction of a 132 KV power project in Ethiopia.
- US$11 million 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 International Ltd has been managing a power plant in Uganda;
- Ranbaxy Laboratories teamed up with Lupin Labs, an Indian pharmaceutical company, to market its tuberculosis drugs in North and West Africa.
- Rites Railway was appointed as consultant for the Adama-Asela road construction project undertaken by a Chinese company in Ethiopia
- Kirloskars Brothers have sold US$75 million worth of water pumps to various African countries over the last few years with projections that its African business would reach US$300 million in 2008

Given that India’s development-centric approach found praise amongst the African participants – with African delegates emphasising that their individual countries can learn important lessons from India’s own experiences in SME (small and medium enterprise) development, the green revolution and as a knowledge economy – it would appear that New Delhi’s role in Africa is seen more as a stakeholder and not a shareholder in the continent’s development trajectory.

Clearly, then, India is not ‘sleepwalking in Africa’, as one Indian newspaper suggested in its editorial in 2006. If anything, New Delhi is upping the ante in its African engagement. This was evident as early as January 2010: At the same time that the Chinese foreign and commerce ministers were making their respective high-profile tours of Africa, there were three other diplomatic tourists on the move across the continent. They were India’s vice-president, Mohammad Hamid Ansari, who was on a seven-day official visit to Zambia, Malawi and Botswana; India’s commerce minister, Anand Sharma, who was visiting Nigeria with oil minister Murli Deora; and the minister of state for external affairs, Shashi Tharoor, who was in Mozambique.

Surely, then, it cannot be coincidental that India is beginning to flex its muscle and is trying to break out of the dragon’s shadow. During his visit to the Africa Vice-President Hamid comments to the media reflected this: ‘The direction in which the Indian economy is going, the major role will be played by the private sector, especially in industrial development’ he told reporters. ‘Local employment will be generated It doesn’t make economic sense to take work force from India because it comes with liabilities. When we go for an investment venture, we don’t go with the idea of imposing our work force or employment of Indians per se. We seek to limit ourselves to management and financial control of enterprises having an Indian element.’

If this is the case then we – as African commentators, activists and social movements – need to be on the look-out for what the Indian footprint is doing in Africa. We should be asking whether India, indeed, offers something different to China’s engagement? Or is it more of the same? Moreover, we should not assume that, because India’s involvement in Africa is not in the same league as that of China or other Northern actors, we can afford to become blindsided by the platitudes that they do business differently. To be honest, India’s ambitions and vested self interests in Africa may not arouse the same suspicions as that of China, but in the end they amount to the same issues of how this affects elite class formations in African societies, capitalist accumulation and, more importantly, what impact this has on people’s livelihoods.

Perhaps it is not enough now to say that African governments must use their relationship with India as a bargaining chip with China and other traditional actors. For there to be an effective partnership, developing a dialogue between civil society, government and business would be a valuable platform to make this engagement different from the others. The Indian government would do well to learn the lessons experienced by other actors in the African market and landscape: The type of sensitivities, threats and backlashes present and how to diffuse these situations before they become the victims of their own self- confidence. The Indian diaspora is only one stakeholder, but there are other stakeholders that fall outside this ambit that must be consulted as well if Indian truly wants to be a different development partner to Africa.


* Sanusha Naidu is research director of the Emerging Powers in Africa Programme based with Fahamu in South Africa.
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