Day 49 – Q 4.What are India’s stakes in Africa? How is India seen and perceived by the member sof the African Union? Discuss.

4. What are India’s stakes in Africa? How is India seen and perceived by the member sof the African Union? Discuss. 

अफ्रीका में भारत के दांव क्या हैं? अफ्रीकी संघ के सदस्य द्वारा भारत को किस तरह देखा और माना जाता है? चर्चा करें।

Introduction:

Africa is now being tipped as the global economic growth engine of the coming decades. Its vast natural wealth and favourable demographic profile are expected to turn the continent as a whole into a growth engine that is expected to run faster than any of the world’s current economic powerhouses, including China, Brazil and India.

Body

India’s stakes in Africa:

• With faster growth trajectory for India and need for energy and other resources, Africa remains a crucial source of natural resources.
  Ex: crude oil and gas has emerged as Africa’s leading export to India, diversifying sources of supply from middle-east.

Just not resources: 

• India is not solely resource driven in African engagement. It is about financial services, telecom, hospitals and education. The 50% of all global FDI in Africa is into services and not resources any more. Resources is big. But it is now a major service economy and that is what India is competing in as India is service driven economy.

Market:

• For developing new markets. Most African countries will be “middle income” by 2025 providing huge trade and investments opportunities as well as market for Indian exports.

Geo-political: 

• Africa remains vital for India’s emergence as a global actor in the international institutional arena. Ex: In reforming existing global governance structures like U.N. Security Council (UNSC), and shape the emerging global regimes related to food, energy, climate, water, cyber security, and use of outer space for development purposes.

To counter China:

• Increasing Chinese presence (military base at Djibouti) and signs of Chinese neo-colonialism.

Growth:

• To achieve sustained economic growth over long term at a time when western economies show signs of saturation and increasing protectionism in global trade.

Terrorism: 

• International terrorism has been on the rise in North Africa in recent years. While India is not directly affected by the localized terrorist organizations in Africa, the troubling links between Somali and other groups with militant groups in the Afghanistan and Pakistan region could significantly threaten India’s future security.

Security:

• Secure freedom of navigation in sea lines of communication protecting India’s international trade moving by sea.

India as perceived by African union members:

• India has a “comparative advantage” over China in building connectivity projects and trade corridors in Africa due to its compatibility and proximity to the continent.
• India is seen as a friendly nation, helping the Continent in need with developmental initiatives such as Indian Technical and Economic Cooperation (ITEC), Asia-Africa Growth corridor, and Pan Africa e-network etc., aimed at building institutional and human capacity as well as enabling skills and knowledge transfer.
• Indian engagement lays emphasis on the long term: enhancing Africa’s productive capacities, diversifying skills and knowledge, and investing in small and medium sized enterprises.
• On the other hand, China’s approach is more traditional: resource-extraction, infrastructure development and elite-level wealth creation.
• Some of the countries like Sudan gave India share in oil field which was controlled largely by China because they didn’t want China to have 100% share in oil field.
• Nigeria also did the same which wanted that all of their resources should not be controlled by one country.
• President of Zambia ran on a wildly anti-china platform with increased Chinese investment and labourers, giving no jobs to locals.
• The beneficiary is Vedanta which was allowed to take copper industry to the point that Vedanta is slated to be 26% of Zambia’s entire GDP.
• India has benefited and the bulk of work done in Africa is running on its own scheme.
• At the core of this is the rise of Indian private sector investment along with large number of state owned enterprises, PSUs investing, especially in oil and gas industry.
• India has extended Line of Credit worth millions of dollars in varied areas to the African countries.
• The term ‘Indo–Pacific’ is a recognition of India’s pivotal role in establishing trading regimes and rules-based maritime freedom of navigation, and noted that Africa “counts” on India to play a very important part strategically and politically for the same India is a “pivot” in the Indo-Pacific region and it has “played a critical role in creating a conducive maritime regime” for a rules-based freedom of navigation.

So, finally The African countries see India as a emerging global power and as a country which can counter china’s Dominance in the continent. At the same time They look India as potential source of investment, grants and a major strategic partner in the Indian ocean region.

Conclusion

Hence, it is critical for India to view Africa not just as a destination for short-term returns but as a partner for medium and long-term economic growth.