India Seeks Partnerships in Africa
Indian Companies Look at African Investments and to Trade Energy
May 7, 2009
As an economy that is rapidly emerging onto the global scene, India is seeking extra resources to fuel its rapid domestic growth. The identification of Africa as an important source of the energy and other commodities it needs has come along with the realisation that China has got a head-start on India in the new scramble for resources, but India's approach is very different from China's.
Historical Relationship
India's relationship with Africa dates back at least as far as Mohandas Karamchand Gandhi, the man who led India out of British colonial rule more than 50 years ago. Gandhi also staged a civil disobedience movement in South Africa to fight segregationist laws against the Indian Diaspora. India may see these common roots in the freedom movements as a good basis for an economic partnership as the two regions emerge economically.
Trade Opportunities
With South African companies already involved in large projects in India including the modernisation of Mumbai International Airport, Indian firms have also been making forays into the African continent for quite some time. The problem they are facing is the difficulty of changing the African custom of trading with Europe; to help them see that Indian firms can offer the same products at greatly reduced prices.
Another central issue is that of access to Africa's oil, which is vital to India, where cities regularly have power cuts because the domestic supply of oil and gas is only sufficient to produce half of the power necessary. Of course the major drawback is the presence of China in the equation. Recently India's state-run oil and gas company, ONGC lost out on a bid for two oil blocks in Africa to the Chinese, who offered more money to help build infrastructure.
The whole issue of trade between Africa and Asia is very complex, but underneath all the concerns over exploitation of the poor African countries by unscrupulous Asian powers is the great opportunity presented to Africa by the trade that could be undertaken. The signs are that African governments are beginning to get more organised and to find their voice in their relationships with India and China.
Intergovernmental Summit
According to the BBC, at a recent summit between a group of African heads of state and the Indian government there were clear statements made by the Africans that they were no longer prepared to be seen as a mere market for raw materials. They are demanding to be treated as equals by the rest of the world. For example, Indian technology could help improve farm output to help combat food insecurity and investment from some of the global Indian private companies like Tata and Mittai could turn around the economies of many of the poorer African countries.
The South Africa High Commissioner to India, Francois Moloi, said recently: “Africa is no longer interested in economic partners who have a colonial mindset, or are just looking to exploit our natural resources. We want investment in our nation, and we welcome economic partners- but it is about developing a partner for the long term... not just to have companies or countries come in and raid our country and then leave. That, we don't want.”
Reference:
"India to court Africa for business," Karishma Vashwani, BBC.
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