Taking advantage of historical ties with the continent, India is trying to counter the commercial competition from China and European nations by offering lines of credit to African firms.
India is moving closer to Africa
Last year the African continent witnessed the conclusion of one of its biggest deals when Airtel, India’s biggest mobile operator, acquired Kuwait’s Zain, which had operations in 16 African countries. The deal was worth over $10 billion.
Airtel, India's largest mobile operators, has arrived on the African market
The change probably meant little to the average customer, but for the continent, it was another sign that India is moving in, emphasizing the rise of India in Africa, at a time when much of the focus on foreign investment has been on China.
As China sweeps through Africa with a voracious appetite for resources, India too is trying to position itself as a credible alternative. Ajay Dubey of the Centre for African Studies at Delhi’s Jawaharlal Nehru University said India’s approach is different from other countries including China. He told Deutsche Welle, "The Chinese approach is entirely money-based. It has left even the US behind in terms of investment. It is the biggest investor in Africa and it is in big projects where political leaders are involved not where people are benefiting." Dubey said the difference in Indian investment is: "Our projects are largely people-centric, for human resources development, capacity building and transfer of knowledge economy to African countries."
During the colonial era, many Indians moved to east Africa and built houses like this one in Uganda
Keen to boost their engagement, India and Africa will hold summits every three years to review the progress on areas identified for cooperation and spell out the future course of action. After the first 2008 summit in New Delhi the next one will be in the Ethiopian capital, Addis Ababa, this May.
China, on the other hand, has already held four such summits.
Rwanda’s high commissioner William Nkurunziza sees a good future for the Indian style of investment, saying, "I think there is an expansion of the Indo-African engagement both at the diplomatic, political and economic level. India represents a potentially useful source of the solutions that Africa needs to fix the challenges that it has. And the dialogue and partnerships that emerge out of the India-Africa summit have tended to provide a platform for generating the solutions that we seek."
China is investing especially in Africa's oil sector
India lagging behind
In terms of trade, there is a huge gap between the level of India’s engagement in Africa and China’s. India’s trade with Africa is estimated to be around $30 billion, which is half of China’s $56 billion in the continent.
China has also struck lucrative energy and infrastructure deals in oil-rich countries like Sudan, Angola, Mozambique, Nigeria and Chad.
The Rwandan envoy refused to comment on any possible China-India race in Africa. "All I can say is that India’s engagement in Africa is most welcome, China’s engagement is most welcome."
Best of both worlds
Dubey believes that Africa seems to be enjoying the best of both worlds. "The big money that is coming from the Chinese, the capacity building and human resources initiative that is coming from India and also the other resources that are coming from the West. So they are now in a position to play between different suitors."
While moving determinedly to strengthen relations with Africa, analysts feel India needs to do more to counter the dragon on safari.
Author: Murali Krishnan
Editor: Sarah Berning