Dr Noour Ali Zehgeer
India has been among the countries who have suffered a setback after Big daddy America announced the reciprocal tariffs or unilateral rate card for countries whose export depends on US market. India’s exports to the United States are diverse and significant, reflecting a strong trade relationship. In 2023, India exported goods worth approximately $75.81 billion to the US. After the announcement, markets reacted and Indian investors lost huge money.
We as an country need to compliments African countries who have been always passionate about doing business with India, even when China invested huge amount in Africa as a Continent.
The connection between India and Africa is rooted in a long history of trade and cultural exchanges that predate the era of globalization. Ancient trade routes facilitated the exchange of goods like spices and textiles between the two regions, fostering early economic links. This historical foundation suggests a pre-existing understanding and potentially easier establishment of trust compared to partnerships with regions lacking such a history. Long-standing relationships often imply shared values or at least familiarity with each other’s customs, which can reduce initial friction in business collaborations. In recent years, the ties between India and Africa have significantly strengthened, driven by vibrant cultural connections and the potential for mutually beneficial cooperation. This emphasis on mutual gain indicates a balanced approach where both sides recognize tangible advantages, fostering sustainability in the relationship. Partnerships based on mutual gain are more likely to endure as both parties are invested in the success of the collaboration.
India has emerged as one of Africa’s largest trading partners, witnessing substantial growth in bilateral trade. Trade between the two regions reached $93 billion in 2022, a significant increase from $10 billion in 2000. Furthermore, historical data reveals a dramatic surge in trade volume from $5.3 billion in 2001 to $70 billion in 2013. This consistent upward trend in trade volume signals increasing economic interdependence and a growing comfort level between businesses in both regions. Higher trade volumes often reflect established supply chains, market access, and a degree of reliability in business transactions. Given this strengthening relationship, there is a strategic rationale for African businesses to collaborate with India.
The trade and investment relationship between India and Africa encompasses a diverse range of sectors, reflecting the complementary strengths of both regions. Several key sectors receive particular focus for trade and investment due to their strong potential and strategic importance. Many sectors are high priority for both India and Africa, driven by the need to ensure food security for their growing populations. Collaboration in agricultural technology, knowledge sharing, and trade of food products is actively promoted. Indian expertise in processing and packaging can add significant value to African agricultural products, creating profitable export opportunities. The advancement of agricultural technology and trade are prioritized by both regions. This shared priority in agriculture suggests strong potential for partnerships focused on enhancing productivity, processing capabilities, and accessing wider markets. Complementary needs and expertise in agriculture can lead to mutually beneficial value chains.
Access to reliable and affordable energy is crucial for development in both India and Africa. Partnerships in renewable energy, oil and gas exploration, and infrastructure development are actively fostered. Indian companies offer considerable experience in power generation, transmission, and distribution, contributing to infrastructure development in Africa. Collaborations in the oil and gas sector, including Indian investments in African oil fields, strengthen energy security. Indian investments in mining and minerals also hold the potential to significantly contribute to value creation in Africa. This creates a reciprocal relationship where each region’s needs can be met by the other’s capabilities. In 2023-24, mineral fuels and oils constituted a significant portion of the trade, with India’s exports to Africa amounting to USD 15.31 billion and imports from Africa at USD 15.45 billion.
Both India and Africa are experiencing rapid digitalization, leading to opportunities for partnerships in IT infrastructure development, software development, and digital services. India’s expertise can help bridge the digital gap in Africa, enhancing communication, access to information, and economic opportunities. Collaboration in Digital Public Infrastructure (DPI), including the India Stack, can improve governance, transparency, and inclusion across Africa. India has already made a vast contribution through building the Pan-African E-Network. India’s advanced IT sector can provide technological solutions and support Africa’s digital transformation journey. Technology transfer and collaborative development in the digital space can drive innovation and economic growth in Africa.
Both regions face healthcare challenges, and India’s expertise in pharmaceuticals, medical equipment, and telemedicine can address African healthcare needs. India’s generic drug industry can provide affordable healthcare solutions for Africa, improving access to essential medicines. India’s pharmaceutical industry has built an extensive presence in Africa for affordable generic medicines and healthcare infrastructure. Several Indian pharma and healthcare companies have invested in Africa. The affordability and accessibility of Indian pharmaceuticals provide a significant benefit to African healthcare systems. This can lead to improved public health outcomes and potential for joint manufacturing or distribution ventures. In 2023-24, India’s exports of pharmaceutical products to Africa were valued at USD 3.94 billion.
Collaboration in textile manufacturing, automotive components, and other industries can leverage India’s expertise and Africa’s resources. Encouraging manufacturing in Africa for export aims to enhance job creation and economic diversification. Indian manufacturers have established assembly plants in Africa to benefit the automobile and transportation sector as well as electrical equipment and machinery. Joint manufacturing ventures can create jobs in Africa, add value to local resources, and potentially serve both domestic and export markets. This fosters industrial development and economic diversification in Africa. In 2023-24, India’s exports of vehicles other than railway or tramway amounted to USD 3.53 billion, and machinery and mechanical appliances were valued at USD 2.67 billion.
Beyond these core areas, there is significant potential for collaboration in tourism and hospitality, education and skills development, the green economy, critical minerals, and defence and space. Diversifying collaboration beyond the core sectors can unlock new growth avenues and address specific developmental needs in both regions. Exploring emerging sectors allows for innovation and caters to evolving global demands.
The volume of trade and investment between India and Africa has witnessed a substantial increase over the past decades. Bilateral trade reached $93 billion in 2022, up from $10 billion in 2000. This represents a significant growth trajectory, building upon the increase from $5.3 billion in 2001 to $70 billion in 2013. This consistent upward trend in trade volume indicates a deepening economic relationship and growing confidence in cross-border transactions. This growth provides a foundation for further expansion and diversification of trade. Key exports from India to Africa. are largely resource-based, highlighting its role as a supplier of raw materials to fuel India’s growing economy. India has also emerged as a significant investor in Africa, with investments concentrated in natural resources, manufacturing, and infrastructure. India is the fifth largest investor in Africa. As of 2020, the total Indian investment in Africa was around $54 billion. India’s increasing investment in Africa signifies a long-term commitment to the continent’s economic development and presents opportunities for African businesses to partner with or supply to these Indian ventures.
(The views expressed in the article are of the author and not that of Straight Talk Communications)