Kampala: From scouting for diamonds in the deserts of Botswana to signing oil deals with Sudan and sending peacekeepers to volatile Congo, India is busy trying to match China’s ever growing clout in mineral-rich Africa and secure energy resources for its booming economy.
Trading on its relative physical proximity to Africa and a history of championing independence struggles, New Delhi will, for the first time, host an India-Africa heads of states meeting on 8-9 April.
Some analysts say India’s long trade links with Africa give it at least a cultural advantage over China. African countries see India as a valuable partner that could boost their development through public-private partnerships.
India’s Prime Minister Manmohan Singh reviews a guard of honour during his visit to the Nigerian presidential villa in Abuja last October
India’s ties with the continent date back generations, with Indian communities firmly rooted in eastern and southern Africa, where many of their countrymen moved as labourers for Britain’s former colonies.
In Uganda—where the late dictator Idi Amin expelled 40,000 Asians in 1972—officials are keen to see closer cooperation.
“We lost ties to India because of Amin’s so-called ‘economic war’ on Ugandan Indians, but we’re slowly getting them back,” Jim Mugunga, a senior official in the government’s privatization and infrastructure programme, said.
“We could gain a lot in terms of infrastructure development and technology if we got India to play a greater role,” Mugunga said. “The other area is public-private partnerships, where we’re strongly looking out for Indian investment.”
Africans need not look far for India’s imprint on the continent: From Senegal in the west to Kampala and down to Johannesburg, there are shops selling saris, menus offering samosas and ornate religious temples.
The historical links are strong too: In South Africa, many Indians fought alongside blacks in the struggle against apartheid, inspired by the likes of Mahatma Gandhi.
He was thrown off a train in South Africa in 1893 for refusing to sit in a third-class compartment because of his colour. He then led Indians in a passive resistance to the country’s race laws.
“The infiltration into the socio-economic fabric that India has had will have a more durable impact in the short-run or medium-run than China,” said Harry G. Broadman, economic adviser for Africa at the World Bank and author of Africa’s Silk Road: China and India’s New Economic Frontier.
“There’s not the same kind of language barrier or the same culture barrier as China,” he said.
That does not mean that India is immune to simmering resentments that have built up over time in countries such as Uganda.
Last year, what was meant to be a peaceful protest against plans to hand over a swathe of rainforest to an Indian company for a sugar plantation degenerated into a violent backlash against Kampala’s Indian community. Mobs stoned an Asian man to death and attacked a Hindu temple, clutching placards that read “For one tree cut, five Indians dead”.
When India started market reforms in 1991, trade with Africa stood at $967 million (Rs3,868 crore at the current exchange rate). This surged to $20 billion in 2006-07 as India sought new markets to power an increasingly globalized economy growing at more than 8% a year.
Much of this growth in trade has been driven by private or a mix of private-public companies of varying sizes, with interests in everything from mining to manufacturing and telemedicine to horticulture. And of course, in oil and minerals.
Private companies such as Essar Oil Ltd and state-owned explorer Oil and Natural Gas Corp. Ltd (ONGC) have clinched deals in southern Sudan, Kenya, Libya and Nigeria among others.
ONGC has made a renewed push in Angola—sub-Saharan Africa’s second largest oil producer—where it lost out on a 50% share in an oil exploration project to China, after China reportedly dangled $2 billion in aid—10 times India’s offer.
Importing 70% of its crude needs, India’s energy demands are expected to more than double by 2030, according to the International Energy Agency. It also predicts that before 2025, India will have taken over from Japan as the world’s biggest net importer of oil after the US and China.
Nigeria is India’s biggest trading partner in Africa, accounting for 11% of its oil imports. Bilateral trade is estimated at $7.9 billion.
But Africa offers more than just oil. Chalking up close to 6% economic growth in 2007, the continent could provide a ready-made market for Indian products, such as Tata Motors Ltd’s ultra-cheap Rs1 lakh Nano cars due to be launched in October.
“Yesterday’s growth story was China, today’s growth story is India. In 15-20 years, the growth story will be Africa and India wants to be there as a strong partner,” said Narendra Taneja, chief executive of the World Oil and Gas Assembly.
In West Africa, Indian-owned companies are planning to mine manganese and iron ore in Ivory Coast, and are prospecting for gold and uranium in Niger, among a host of other mineral projects.
India’s ambassador to Ivory Coast said last year that his country hoped to make the African state a hub for investment elsewhere in the region.
The vice-president of Ivory Coast’s next door neighbour, Ghana, led a trade delegation to India in mid-March to attract Indian investment to his country, which hopes to start its first significant oil production within two to three years.
“We recognize the might of India. We have excellent ties with India,” Indian media quoted Aliu Mahama as saying.
When India’s Prime Minister Manmohan Singh visited Nigeria and South Africa last October, he promised cooperation on many fronts, including transferring technology.
“The objective will not just be a quantitative increase in trade and investments, we will also aim at a qualitative enhancement of Africa’s economic competitiveness and technological capabilities,” Singh had said.
Nonetheless, Indian business leaders may view with envy the pace of China’s state-led expansion in Africa.
China’s trade relations with Africa were worth less than India’s in 1999, but since then Sino-African trade has soared to $55 billion.
Though the aim may be the same—to carve out a bigger piece of the world economy by tapping Africa’s resources— India hopes to set itself apart from China by presenting its own success story as a model for African countries to emulate. “That is one of the cutting-edge differences between India’s relationship with Africa and the relationships of any other country,” noted Indian ambassador to Ethiopia Gurjit Singh.
“We have developed our country into a pluralistic, multicultural, democratic set-up. I think that is a magnet for many African countries today,” he said.
India may also be hoping to reap political dividends from strengthened economic ties. India media quoted Ghanaian vice-president Mahama as saying: “Ghana and Africa support India for a (permanent) place in the UN Security Council.”