New Delhi, 19 July: The recent turbulence-whether it is the Covid pandemic, or the knock-on effects of the Ukraine conflict hold lessons for everyone. All nations, big and small, have become more aware of their vulnerabilities and external exposures. After the Covid pandemic, this was the first such high level investment meet in Delhi.
Diplomats from several African nations are currently in the capital for a key two-day investment meet. The two day 17th CII-EXIM Bank Conclave, was inaugurated on Tuesday by Vice President Venkaiah Naidu. External Affairs Minister Dr S Jaishankar and Trade Minister Piyush Goyal also graced this occasion.
The conclave is being represented by forty high-level ministers from 17 countries, including Cameroon, Burkina Faso, Eswatini, Republic of the Congo, Ethiopia, Gabon, Equatorial Guinea, Ghana, Niger, Malawi, Mauritius, Sudan, Namibia, Nigeria and Sierra Leone. This is the 17th edition of the conclave. Over the years, it has emerged as one of the largest congregations of senior ministers, policy makers and business leaders from Africa and India, cutting across sectors”, and “played a pivotal role in encouraging Indian companies to establish and grow their footprint in Africa. The conclave, besides helping take India’s private sector into African nations, “brings together African ministers with their experienced Indian counterparts in informal meetings instead of ministerial meetings”.
This year’s conclave focuses on infrastructure development and trade finance, education and training, agriculture and food processing, consultancy services, and healthcare in addition to other areas where Indian companies have steadily increased their presence over the years in Africa.
The trade between India and African countries has been pretty balanced with exports of trade and services of about $40 billion and imports of $49 billion, Commerce and Industry Minister Mr. Piyush Goyal said while speaking at the inauguration of 17th CII-Exim Bank conclave in New Delhi.
Goyal identified four major focus areas for the India-Africa partnership: solar power, military exchanges in the context of the security of the Indian Ocean, physical and digital infrastructure, health care, pharma and vaccines, and start-up ecosystem.
However, Minister of External Affairs, Dr. Jaishankar highlighted the digital shift during the pandemic. He said, “in terms of responses, the actual potential of digital delivery was demonstrated during the pandemic in different domains as well. It is therefore worth considering how India and Africa can make the triad of health, digital and green growth the focus of collaboration. This is as much a business opportunity as it is a public policy.”
During his address in the the Special Plenary of the 17th CII-EXIM Bank Conclave on the India-Africa Growth Partnership, MEA, Dr. Jaishankar said, “this edition would contribute to generating a buzz in the business communities of India and Africa for our mutual benefit.”
“A wide ranging and detailed agenda was deliberated upon during the course of the day. Whether it is higher education or skill development, building stronger financial partnerships or strengthening value chains in agriculture and food processing, these are all significant sectors of cooperation between India and Africa.”he added. Trade between the African subcontinent and India increased from $7.2 billion in 2001 to $59.9 billion in 2017, making India the continent’s fourth-largest national trading partner, according to Exim Bank and the African Export-Import Bank (Afriexim Bank). Trade with India accounted for more than 6.4 per cent of total African trade in 2017. Data from the Ministry of Commerce and Industry show bilateral trade between India and the 48 countries of sub-Saharan Africa was valued at $46.82 billion in 2020-21, down from $55.70 billion in 2019-20. India has a negative trade balance with sub-Saharan Africa, the Ministry figures show.
Dr. Jaishankar also mentioned this today in his address today. He said, “with cumulative investments at US$ 73.9 billion from 1996-2021, India is among the top five investors in Africa. Through the Duty Free Tariff Preference (DFTP) Scheme that extends duty free access to 98.2 per cent of India’s total tariff lines, India has opened its market to African countries. So far 33 LDC African nations have been entitled to get benefits under this scheme. We hope that the African Continental Free Trade Area Agreement (AfCFTA) which was commenced in 2021 would be helpful to Indian companies to enhance and intensify the business footprint in Africa”.
Earlier on May 25, on the occasion of Africa Day, a statement was issued by the Ministry of External Affairs (MEA), that mentioned as how African nations have benefited from India’s Duty Free Tariff Preference (DFTP) scheme which provides duty free access to 98.2 per cent of India’s total tariff lines. “Lines of Credit (LoCs) worth $12.26 billion have so far been extended to African countries, making them the second-largest recipient of India’s concessional loans”, the MEA said.
Beside all economic and trade relationships, India has also always stood by its friends in times of need by extending support in the form of Humanitarian Assistance and Disaster Relief (HADR), often as a first responder.
While addressing the summit, Dr. Jaishankar said, “I would recall a few examples of HADR in the region such as Operation Sahayata to assist cyclone IDAI-hit Mozambique in 2019, Operation Vanilla to provide relief to flood victims in Madagascar in January 2020, the support to Mauritius in containing the oil spill due to the grounding of ship Wakashio. These are but, some examples of our mutually beneficial cooperation. Prime Minister Modi’s initiative for a Coalition for Disaster Resilient Infrastructure (CDRI), launched in 2019, is also relevant in this context. India invites African countries to join this initiative in greater numbers.”
Historically, India and Africa have longstanding, historic trade and economic linkages which go back into the recesses of time. Whether it is commerce, culture or mobility, there are truly historical linkages that give Indo-Africa contemporary partnership a strong sense of comfort.
However, over the years, Indian enterprises have also invested in energy, healthcare, and agriculture sectors, as well as the business of diamond cutting and polishing, in Namibia. Analysts expect these sectors to grow over the next few years.
India Exim Bank’s study titled “Building a Resilient Africa: Enhanced Role of India” was also released during the conclave. According to the study, there is a huge trade complementarity between India and Africa. India’s total trade with Africa stood at $82.5 billion in 2021, recording the highest level witnessed by both regions.
Bridging gaps in trade finance could unlock the latent export potential of India and Africa and could increase the share in global export participation of both regions.
And this is time, when India needs to be dynamic in its engagements in Africa and address the changing needs of the Continent, while emphasising the huge opportunity African Continental Free Trade Area agreement presents for India.
-Dr. M SHAHID SIDDIQUI
Follow via Twitter @shahidsiddiqui
