India can match China dollar for dollar

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By Emmanuel Mayah

As the 2nd Africa-India Summit gathers momentum in Addis Ababa, a top Indian business executive has said that India has what it takes to match China dollar for dollar in terms of investment portfolio in Africa. Akhil Gupta, Deputy Chief Executive Officer of Bharti Group, an Indian company with a strong presence in Africa, said India is not in Africa to play catch-up with its biggest rival, China, rather it is offering Africa a new trade deal that will counter China’s growing influence on the continent.

Gupta said that the major differences in both countries’ mission in Africa are that while it is the Chinese government that is buying up businesses in Africa, India’s investments in Africa are private-sector driven.

Until 2000 Africa had healthier trade ties with India than with China. But over the past decade or so, China has been very aggressive – investing in the region to secure access to its rich mineral resources and building a trade relationship nearly twice the size of India’s.

India’s current trade value with Africa is at US$45 billion, which it aims to raise to US$75 billion by 2015. China, in contrast, is aiming for trade worth US$110 billion this year.

In 2009-10, foreign direct investment from India and China into Africa were almost equal at US$1.5 billion.

But almost all of India’s cash went to Mauritius, a tax haven country used to route investments to other locations.

To counter China, India says it has been busy building models that take into account its historic relationship with Africa and one that makes it have a stronger stake in the continent than China.

An Indian, Rajiv Bhatia, said he was privileged to have separate opportunities of interaction, the past two months, with the Prime Minister of Mozambique, the Vice-President of Kenya and the Delhi-based High Commissioner of one of the most important African countries.

“These meetings and other conversations with knowledgeable people from the continent have led me to make three important conclusions. One, African leaders have been genuinely appreciative of the positives in India's development model. They are keen to deepen cooperation with India in order to profit from our achievements and successes. Two, they are astute and pragmatic enough not to keep all their eggs in one basket. In simpler words, they are determined not to choose China over India or vice-versa. They plan to work with both and utilise the unfolding competition, to their advantage. Three, they are inclined to judge us by our words and intentions as well as action.”

An Indian official boasted: “India can’t be like China, whose engagement with the continent is quite crass and imperialist,”

The Indian commerce Ministry say it will spearhead a special programme for the world’s four poorest countries – Burkina Faso, Mali, Chad and Benin – that rely solely on cotton production. Liberal subsidies for American cotton farmers have ensured that these nations, also known as the Cotton-4, stay in a spiral of depravity. “We will actively work with them to improve their farm practices and stay involved till yields go up,”

Similarly, in diamond-rich Botswana, India will set up diamond-processing facilities to help the country move up the value chain in the business. Botswana is in the midst of serious labour unrest because diamond mining is perceived to have created few gains for the workforce and citizens at large.

In addition to an existing US$1 billion line of credit to Africa, a new credit window would be opened. Unlike typical credit lines, this one would have no in-build linkages with India’s commercial interests. India will also pursue Africa’s least-developed countries to start using the duty-free tariff preference for their products in the Indian market, which was announced in the first India-Africa summit in Delhi in 2008.

 

  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit
  • Africa-India Summit