NeuroQuantology | December 2020 | Volume 18 | Issue 12 | Page 30-39 | doi: 10.14704/nq.2020.18.12.

NQ20234
Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations

Emergent Friendships: Mapping India Africa

Economic Relations
Bashabi Gupta*

Abstract
The India Africa relationship in the era of globalisation is often show cased in the emerging economic relations as
this aspect of the relationship has grown through leaps and bounds in the last decade. It is significant to note here
that though trade relations may be captured through hard data, a lot of other important invisible factors such as
provision of debt relief, contributions to other development work, technical support and training through different
capacity building measures over time along with the presence and contribution of the Indian diaspora in the African
nations etc that create and ease the path for the economic relations to grow are enmeshed within this relationship.

Key Words: Economic, Relations, Friendships, Emergent.

DOI Number: 10.14704/nq.2020.18.12.NQ20235 NeuroQuantology 2020; 18(12):30-39

Introduction to reach a targeted level of $ 100 billion by 2015. In

The India Africa relationship in the era of
globalisation is often show cased in the emerging
economic relations as this aspect of the relationship
has grown through leaps and bounds in the last
decade. It is significant to note here that though
trade relations may be captured through hard data,
a lot of other important invisible factors such as
provision of debt relief, contributions to other
development work, technical support and training
through different capacity building measures over
time along with the presence and contribution of
the Indian diaspora in the African nations etc that
create and ease the path for the economic relations
to grow are enmeshed within this relationship.
India is also an important partner in the African
nations’ efforts in the extraction of energy
resources such as crude oil and natural gas. Thus,
an effort to map the economic relations in this
paper is to understand and document the play of all
these factors. Trade relations that have grown as
visible and tangible instances of an emergent
friendship thus become an important part of India’s
economic relations with the African continent.
Burgeoning trade relations between India and the
nations of the African continent have increased
2012, the trade was about $ 70 billion. Significantly,
just about a decade ago this trade volume was only30
about $ 5 billion. It is equally important to note that
the commodity basket involved in the trade
between the African nations and India has
undergone a critical change. Aligned to this, is the
change in the policy initiatives advocated by India.
This came first in the form of the Africa Forum
Summit first held in New Delhi in 2008 that had
two significant parts: one was the creating of a
credit line worth about $ 5.4 billion for a period of
five years, second was providing grants of over $
500 million and secondly extending a duty-free
preference scheme for 34 African nations which are
amongst some of the least developed countries in
the world. Indian companies are slowly marking a
presence for themselves in Africa, especially in the
energy, telecommunication and internet technology
sectors. Currently Indian foreign investment in
India is about 33% of its total investment abroad
making Africa an important trade partner of India.
This paper also looks at the causes and the
resultant changes in the pattern of the economic
relations which are diverse in nature between India
and the Africa nations.

rapidly in the last decade such that now the aim is

Corresponding author: Bashabi Gupta
Address: Dept of Geography, Miranda House, Delhi University
E-mail: bashabi@gmail.com

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Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations
This paper is divided in three sections: the first
section deals with different facets that have helped
India Africa trade relations to develop, the second
section deals with the trade patterns that constitute
the economic relations, the third section deals with
the new pathways in enhancing the trade and
economic relations between India and the African
nations.
Section I: Factor Spectrum Enabling Indian
Economic and Trade Relations with Africa
India and the nations of the African continent have
long histories of friendship and bilateral relations.
In the period of globalisation in the twenty first
century, India’s economic and trade relations with
the African continent have been structured and
helped by multiple factors. Primary amongst these
factors is the provision of varied forms of
development assistance to the nation states in
Africa that has created alternative forms of debt
relief for these nations, followed and substantiated
by its pre-existing traditional ties along with
engaging in South - South cooperation rites and
rhetoric and finally by the settled presence of the
Indian diaspora in multiple locations in Africa.
Almost all these factors are based upon the new
economic growth of India under its New Economic
Policy since 1991 and the burgeoning of its private
sphere that has a lead in creating investments in
the African continent.
Developmental Aid and Assistance
With India’s new economic power, it has become an
unusual donor or partner in the development story
of the African nations; unusual as this was a space
primarily occupied by the Western nations and
their donor agencies. In understanding India’s aid
programme towards the African nations Iquote
from Prof Anirrudh Gupta’s 1968 article that had a
section called The Wrong Question, what has India
to give to the African countries? He opines that
despite India's vast experience and comparatively
higher rate of technological and industrial growth,
the problems associated with economic
development and reconstruction are much the
same in India and Africa. The first problem is not,
therefore, of 'giving' each other any-thing but of
'understanding' each other's problems and of
pooling together resources for certain commonly-
agreed objectives.
The last decade has witnessed India reviewing its
development assistance programme for the African
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nations. India has shown implicit understanding of
Africa’s complexities as evidenced in its policies
towards Africa not only as a continent of 54 nations
en bloc but also as countries that have different
needs that need to dealt with in varied manner. In
doing so, India has given credence to the concept of
a donor in international relations that is non
conditional in nature and structure, an assistance
that spotlights the strategic requirements of the
nation to whom the development assistance is
advanced. India has long been a development
assistance partner for the African nations as was
visible from its efforts at the Bandung Conference
(1955) and the inception and operation of its ITEC
program since 1964. The Indian Technical and
Economic Cooperation Program (ITEC) programme
according to the Government of India provides
nations from the South to benefit from India’s
experience of various development programmes
achieved both with aid from foreign donors as well
as development funding from its own resources.
ITEC is about cooperation and partnership for
mutual benefit. It is response oriented and it
addresses the needs of developing
countries…It…possesses skills of manpower and
technology more appropriate to the geographical31
and ecological conditions…of several developing
countries. As an umbrella programme ITEC offers
training facilities to both civilians and military
officials, supports project management activities,
provides disaster relief and supports other
development initiatives. Currently India trains
1600 Africans per year up from 1100 African
people as per the declaration at the India–Africa
Summit of 2008 and 2011.
India in putting together the aid programmes for
the African nations have also demonstrated its
willingness to promote ‘horizontal cooperation’
based on the principles of equality, partnership and
mutual interest. Thus, India has supported various
developmental efforts of the African nations over
time such as the Techno-Economic Approach for
Africa–India Movement (TEAM-9) initiative for the
eight West African states that is focused on
provision of a credit line of US$500 million. India
has utilised its developmental assistance
programme to create and sustain its countries to
use its aid programmes to strengthen the strategic
partnerships with countries in Africa, especially the
nations of the sub-Saharan Africa region. India’s aid
programme in Africa increased at an immense 22%
annually since 1998–99.
Indian aid for the African nations saw a major
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Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations
change in its structure from the first Africa India
Forum held in New Delhi in 2008 wherein India’s
role of providing development assistance also took
on the shape of being a credit provider and
facilitator. After the 2008 declaration of enhanced
cooperation and assistance between India and
Africa lines of credit (LOCS) are offered through the
EXIM Bank of India to foreign governments,
regional multilateral banks and other financial
institutions. These are unconditional loans which
the borrowers may use as they see their need. This
has allowed some of the borrowing institutions of
the African nations to restructure their debts
providing immense relief to economies already
stressed under debt from the Western nations as
well as allowing them to choose which donor they
want for their developmental progress. On the
Indian side, these loans are also available to Indian
medium and small corporate for creating exports
from India to Africa. This then becomes a prime
means for promoting Indian economic interests in
Africa along with building partnerships with
different African nations. Since 2003, according to
one estimate, the EXIM Bank’s LOCS have grown by
about 37.7% annually. The Bank has granted about
$3.5 billion as loans and guarantees in 2008–09
resulting in 69% of the total LOCS that went to
countries in Africa such that the world over Africa
has emerged to become the primary recipient of the
LOCs. India has also waived off the debts of five
African countries: Mozambique, Tanzania, Uganda
Zambia and Ghana as part of its developmental
assistance to these nations under the as part of the
Enhanced Heavily Indebted Poor Countries (HIPC
II) initiative (Jobelius 2007).
Emphasis on institution building and capacity
training is to be the cornerstone of Indian
development assistance to the African nations as it
feels that this is the long-term development
assistance that will enable sustainable development
in Africa. This has helped the launch of the new
Pan-African E-Network (Sen 2008). The Pan-Africa
e-Network based on the PPP model with a project
cost of US$ 125 million was launched in 2008-09.
This is an ambitious project for distance education
and tele-medicine. This is often cited as an example
of the growing partnership between India and
Africa where on-line medical consultation with
Indian medical specialists is provided to the
medical practitioners in African nations. The
network is also designed to provide help to
networks of e-governance, e-commerce,
infotainment, resource mapping, meteorological
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and other services in different African countries. 47
of the 54 African countries are at the present a part
of this project. In tele-education, the effort is to
provide quality education to 10,000 students in
Africa over a 5-year period in different academic
disciplines. This project has a tie up with some of
the best Indian educational institutions.
In the 2nd India-Africa Forum Summit held in 2011,
the Indian government committed US$ 700 million
to establish new institutions and training
programmes in consultation with the African Union
and its institutions. Some of the key institutions in
the process of implementation are: India-Africa
Institute of Information Technology, Ghana, India-
Africa Institute of Foreign Trade, Ghana and
Uganda, India-Africa Institute of Education
Planning and Administration, Burundi, India-Africa
Diamond Institute, Botswana, India-Africa Civil
Aviation Academy, India-Africa Institute of
Agriculture and Rural Development, India-Africa
University for Life and Earth Sciences – Ibadan
University, Nigeria.
Another instance of providing aid through capacity
building to the different African nations, thereby
increasing its own market share lies in its approach
to the development of cotton textiles industry in32
Africa. Africa exports about US$ 3 billion worth of
cotton to the world. For India African cotton does
not form a mainstay of its home cotton textile
business but one that does figure in some of its
import commodity basket from a few specific
countries such as Egypt. India is a major player in
the global cotton market with a strong home based
textiles industry. Under the aegis of the 2nd India-
Africa Forum Summit in 2011, the Cotton Technical
Assistance Programme (C-TAP) for Africa was
initiated aiming at strengthening the value chain of
the cotton sector in Africa through a series of
interventions such as transfer of technology, post-
harvest practices, enhancing downstream
competence and capacity building of various
stakeholders. The C-TAP is being implemented in
Benin, Burkina Faso, Chad and Mali (the Cotton-4),
plus Malawi, Nigeria and Uganda. The collaboration
is expected to spawn a vibrant textiles industry in
the cotton-producing African countries. India has
also committed to establish an India- Africa Textiles
cluster that would mobilise Indian investments of
US$ 350 million with an employment generation of
25000 workers. Today these countries are some of
the oil exporting economies to India. India has also
negotiated with these nations for lower trade
barriers so that the entry of multiple Indian
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manufactured goods is possible and that Indian
businesses can become established there and make
its presence felt in different sectors.
South - South Cooperation between India and
the African nations
India proved its affinity to the African nations as a
major ally of the Africa Group in the run-up to the
commencement of the Doha Development Agenda.
It also has played a prime role in canvassing for
better access to medicines, that has resulted in the
Trade-Related Intellectual Property Rights (TRIPs)
and Public Health Declaration at the Doha
Ministerial Conference in 2001. India has also
partnered the African states as part of the Doha
negotiations (Chaturvedi and Mohanty 2007, pp.
61–64). India has provided leadership to coalition
efforts of the developing countries such as the G20
on agriculture, by working in close co-operation
with the Africa Group, shaping the outcome as
‘Alliances of Sympathy’ that ensure that their
competing agendas are not used by the North to
strike side-deals (Hurrell and Narlikar 2006). India
has also created a Duty-Free Tariff Preference
Scheme for least-developed countries (LDCs) in
Africa along with partnering them in their efforts
by providing the Most Favoured Nation for trade in
both bilateral and multilateral trade practices. All
such efforts have gone into creating larger spaces
for Indian economic relations with these African
nations giving rise to new markets and hinterlands
for Indian businesses.
Indian Diaspora in Africa
The Indian diaspora in Africa particularly in the
Eastern Africa have centuries old histories of
settlements, journeys, commodity flows and
prosperities across the Indian ocean. The colonial
periods witnessed the journeys of thousands more
Indians in different roles from indentured labour to
adventurers in different parts of the African
continent. Though the Indian diaspora perhaps for
historical reasons are more concentrated on the
eastern shores of Africa, yet today they are found in
most interior of locations in Africa also. They have
engaged in trade and other economic activities
wherever they have gone in Africa and after
becoming successful in their business endeavours
often also venturing into large scale philanthropy
such as establishing schools and hospitals across
the continent. Today they are also present as skilled
labour commanding high fees from multinational
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corporations posted in various African nations.
Where ever there is a Indian diasporic community
it has been found that the region has witnessed an
enhanced Indian export zone. This relation shows
that the presence of diaspora in the regions where
India wants economic relations to flourish has
facilitated India’s penetration in the local market
economy. In some regions such as the East Africa,
Indian businesses have long established ties in the
economic arena. Thus, they act as a soft power for
the economic and trade relations of India with the
various African nations.
Section II: Trade Policies and Patterns That
Constitute the Mainstay of Economic Relations
between India and Africa
India-Africa bilateral trade has increased by almost
32% annually between 2005 and 2011.
Interestingly, even when there was recession in the
world economy during this same period, this trade
volume has continued to register positive growth
such that it is projected to reach almost US$ 90
billion by 2015. This increase in the total trade
volume is a result of the Indian government’s33
partnering with private enterprise from India to
conduct business in the African nations as part of
trade policy initiatives. Private investment from
India in Africa has expanded with major
investments having taken place in the
telecommunications, IT, energy, and automobiles
sectors. The reciprocation has been in terms of
acceptance of trade benefits by the African nations
and in turn granting India more access in trade
relations into their own economies under the
rhetoric of South South Cooperation.
The leverage gained by high domestic economic
growth in India and some African nations has made
these trade links more visible so that South South
trade becomes a viable and bankable proposition in
negotiating the trade barriers by both India and the
African nations; both the partners have
considerably lowered the trade barriers for each
other. This openness has led to the sharp increase
in the value of bilateral trade from US$ 5.3 billion in
2001 to US$12 billion in 2005 to US$ 63 billion in
2011. The value of Indian exports to the African
nations have grown annually at a rate of 23.6%
while the same for African exports to India have
grown annually at a rate of 32.2% between 2005
and 2013. This is visible in the graph given below.
The last figures are projected on the basis of the
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Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations
continuation of Indian demand for African goods
especially minerals and fuel such as crude oil that
forms a major part of the commodity basket of the
trading goods.
Figure 1: India-Africa Trade: Growth
Projections
Source: UN COMTRADE and WTO/CII data
report on India Africa Trade.
Trade Patterns between India and Africa
A holistic look at the trade patterns between India
and the African nations will show that India shares
a thriving relationship in trade terms with the
African nations. Africa’s export and import and
Indian import and export map encompasses almost
the whole of the African continent. India has trade
linkages with six African nations and has trade
surplus with 40 out of the 54 African nations. The
main commodity from the basket of goods that
forms the trade products for India are raw
materials from African nations, especially the
minerals and fuel that supply India’s energy
requirements. In reality, African crude oil imports
to India forms a fifth of India’s crude oil import
from across the world.
Indian exports on the other hand show a wise
variety with a distinction that almost all products
that India exports to the African nations have some
inbuilt technological aspect. Region wise, earlier
Southern Africa was India’s major trading partner
since 1990 and that has now changed and West
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Africa has emerged to be the major trading partner.
East Africa remains to be the prime market for
Indian manufactured goods and has a market share
of almost 34% in 2011 in all of Indian exports to
the African nations.
Figure 2: India's trade relationship with Africa,
by region in 2011
Source: UN COMTRADE and WTO/CII data from the
report India Africa Trade
A new trend that has emerged in the trade
relationship between India and Africa is that Indian34
investment from businesses of varied sizes has
increased in multiple sectors of the economies of
the African continent such that the Indian
Multinational Enterprises (IMNE) are visible in
mining, telecommunications, agricultural
processing, IT enables services, breweries, financial
and insurance services and infrastructure projects.
Indian enterprises in Africa are either private
entities or they follow the private public
partnership (PPP) model. They prefer to buy
already established businesses in Africa and source
their raw materials either from the local market or
from international market. Thus, these businesses
though based in Africa and owned by Indians have
a considerable presence in the global markets as
well as in the African markets. They sell their
products also to private African businesses and
operate in the local economy.
Indian Imports from Africa
The commodities that make up India’s import
basket from the African nations is overloaded with
raw natural resources, especially energy resources
so much that crude oil and gas together count for
over two-thirds of Indian imports from Africa.
Precious minerals like Gold and other precious
metals make up another 16% of imports. The top
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Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations
six products at the HS-6 level, viz. crude oil (60%),
gold (15%), phosphoric acid (3.8%), coal (3.5%),
liquefied natural gas (2.7%) and shelled cashew
(2.6%), account for over 87% of total Indian
imports from Africa. Most of these are high value
goods and are intimately linked to the global
commodity prices. Six African nations: Nigeria,
South Africa, Angola, Egypt, Algeria, and Morocco
dominate the import of goods to India as they
account for over 89% of total Indian imports from
Africa.
Table 1: Indian Imports from Africa by region
(in million US$) Share (%) CAGR (%)
Source: UN COMTRADE
Indian imports from the West African and Central
African region have witnessed the highest growth
mainly due to Indian imports of crude oil from
Nigeria and Angola. Other than crude oil, the North
African nations import fertilisers, inorganic
chemicals, phosphates and cotton to India. The
major change has been in the West African scenario
as it has emerged as the oil industry ‘hot spot’ with
significant oil reserves and constitutes about 86%
of the total import commodity to India. Other
products that form a part of the Indian import
commodity basket include edible fruits and nuts,
especially shelled cashew, wood and wood
products, cocoa and cocoa preparations and
mineral ores and slag. Recently Guinea-Bissau,
Liberia and Benin have emerged as trading
partners of India from this region. This is directly
linked to the TEAM 9 (Techno-Economic Approach
for Africa-India Movement) approach initiated by
India in 2004, wherein special co-operation
amongst primarily the francophone West African
countries, viz., Burkina Faso, Chad, Cote D’Ivoire,
Equatorial Guinea, Ghana, Guinea Bissau, Mali,
Senegal, and India saw the extension of LOCs of US$
500 million along with a further US$ 200 million
credit line to the New Partnership for Africa's
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Development (NEPAD).
From the Central African Region, Angola dominates
the import commodity basket by sending crude oil
to India. Other important trading partners of India
in this region are Cameroon and the Republic of
Congo. This region has shown an almost 100 %
increase in imports to India between 2005 and
2011 mainly through the crude oil trade. Other
goods from this region include vegetables and
coffee. The East African region has the least share
in the import commodity basket of the African
nations to India though this region is perhaps most
in touch with India both in the historical context as
well the current times. The major commodities of
this region that account for about only 2% of the
total import basket of goods to India consist of
edible nuts, especially shelled cashew, iron and
vegetables, iron and steel, coffee and inorganic
chemicals. As South Africa is the largest economy in
the Southern African region, it dominates the trade
pattern with India with its commodities forming a
major part of India’s import basket from this
region. Indian imports primarily gold (about 11%
of India total gold import), coal from South Africa
along with iron and steel, inorganic chemicals and
mineral ores. 35
It is significant to note that in all of Indian import
from the African continent crude oil represents the
most important as well as the most valuable
commodity that drives up the total value of the
import trade. For example, when it is said that India
is well integrated into the African economies as it
has import and export relations in almost all
economies of Africa and the least developed
economies also have increased their total value and
volume of commodities trade with India, it masks
the fact that this trade is in reality crude oil exports
primarily from Angola and that the actual share of
the non oil import by India in its trade relations
with the African nations accounts for only 4.6% of
the total. Indian imports from the African continent
is driven by the natural resources it possess as all
raw materials for various aspects of Indian
manufacturing and energy requirements form the
main import commodity basket. Very little of final
goods and commodities produced in the African
nations are imported by India.
Indian Exports to the African Nations
Launch of the "Focus Africa" programme by the
Government of India provided a new direction in
Indian economic diplomacy towards Africa. The
Focus Africa programme's commercial focus is
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Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations
expansive and beyond regular fiscal incentives,
whereby export promotion activities are conducted
by various export promotion councils and business
associations with grant under Market Development
Assistance (MDA) and Market Access Initiative
(MAI) Schemes. The programme forms part of a
larger strategy of India to diversify its trade
relationships beyond traditional markets. The five-
year Foreign Trade Policy of 2002 -2007 created a
formal trade policy that helped Indian
entrepreneurs move towards the African markets
resulting in an increase in the value and volume of
Indian exports to Africa. Between 2005 and 2011,
Indian exports have grown annually at over 23%,
even as Africa's share in India's total exports
increased from 6.7% to 7.7%.
The biggest export market for Indian products is
South Africa, having an export trade of almost
22% of the total export from India followed by
Tanzania which has a share of the Indian export pie
of about 9.3%. This is also perhaps the fastest
growing export market for Indian goods in Africa.
The main products that form a part of the
commodity basket of exports from India to the
African markets are refined petroleum,
automobiles and auto-components,
pharmaceuticals, electrical machinery and
industrial machinery. There is a diversity in the
products that India exports to the different regions
in Africa whereby India's primary exports to East
and Southern Africa are petroleum products, while
that to West and Central Africa are pharmaceuticals
followed by motor vehicles to North Africa.
India's exports to African LDCs have also seen
positive annualised growth of over 25% between
2005 and 2011. Tanzania, Sudan, Benin,
Mozambique and Angola are the top LDCs
destinations for Indian exports. There is also an
observable shift in the export basket, as demand for
value-added products from India has grown
significantly during this period. Cereals and cotton
that had a higher demand from the African LDCs in
2005 have been replaced by exports of refined
petroleum products and automobiles in 2011.
Table 2: Indian Exports to Africa by Region (in
million US$) Share (%) CAGR (%)
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Source: UN COMTRADE
The North African region is perhaps one of the
richest regions in Africa that has shown a
propensity for value added goods and services from
India. Egypt as a country forms the largest market
for Indian goods in North Africa. Egypt also has had
long diplomatic ties with India. The main
commodities of the export basket in this region are
automobiles and spare parts for the automobile
industry, electrical machinery and bovine meat. In
the North African Maghreb, India also has interest
in industrial turnkey projects, refinery installations,
gas pipeline, transmission line, and water supply
projects. In this region Morocco has been granted a36
US$ 10 million LOC for project exports by the EXIM
Bank of India.
In the West African region Nigeria forms the largest
market for Indian goods and services. Here India
also faces a large trade deficit as its imports of
crude oil are expensive and the exports to this
region have not been capable of bridging the gap as
yet. In provides pharmaceuticals, electrical
machinery and vehicles to this region and has a
market share of only 5% in the region’s imports. It
is in this region that TEAM 9 and Focus Africa
Programme in the Francophone nations have
concentrated trade policies and economic
diplomacy efforts being made. For instance, the
President of Benin was invited to India and made a
state visit in 2009 to New Delhi followed by a US$
15 million LOC was extended to boost Indian
exports of transport and farm equipments. Various
trade and investment promotion activities have
been organised for both African and Indian private
and government organisations in India to enable
trade especially in pharmaceuticals, electrical
machinery and machine parts, mechanical
appliances and transport equipments. The EXIM
Bank of India has many operational LOCs in the
region, including a dedicated line for Senegal worth
US$ 17.87 million for the supply of buses and spare
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Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations
parts from India that extends for up to 20 years.
Thereafter, Tata Motors has been able to establish
its second assembly operations in Senegal. Tata
Motors currently exports to 21 countries in Africa.
In 2011, a joint venture with Tata Africa Holdings
established Tata Motors (SA) Ltd and invested
approximately US$ 12.1 million in South Africa to
open its first assembly plant in the region.
The Central African region is currently not a high
export growth area for India but is a region that has
the ability to grow in a major way in the future.
Here, countries like Angola, Cameroon and DR
Congo have been predicted to achieve high growth
between 2012x to 2017. Currently they are
amongst the larger markets for Indian products
with export commodities of pharmaceuticals,
refined petroleum products, vehicles and industrial
machinery in their baskets. Significantly, here India
has been contributing to fulfil the infrastructure
requirements of this region viz the extension of
EXIM Bank open LOC of US$ 168 million to the D.R.
Congo for the for financing and development of the
Ketende Hydro-electric project that will boost
Indian exports of power transmission equipments
and other industrial machinery to the country.
Largest market for the Indian export goods is in the
East African region with it being about 34% of total
Indian export trade destination in Africa. Here
Kenya, Tanzania and Mauritius represent the
largest markets for Indian products. In this region
there is Indian investment in sectors like textiles,
agri-business along with refined petroleum
products, pharmaceuticals, industrial machinery,
iron and steel and sugar products. Ethiopia in this
region has been a favoured destination for Indian
businesses and has enjoyed extensive Indian
investments in mining, land and agriculture. It has
also secured four EXIM Bank concessional LOCs of
US$ 213 million, US$ 122 million, US$ 166 million
and US$ 91 million primarily for the development
and the rehabilitation of the sugar industry.
The Southern African region in terms of Indian
export destinations is dominated by the country of
South Africa as it has the largest and the most
thriving market. India is positioned at the fourth
place as the largest exporter of goods and services
to South Africa. The main commodity basket of this
region from Indian export market is: refined
petroleum products, automobiles, pharmaceuticals,
electrical and industrial machinery. India has
negotiated favourably with the Southern African
Customs Union (SACU) for a preferential trade
agreement (PTA) that will help to bring down trade
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barriers and allow more Indian exports. India also
is pursuing trilateral trade negotiations pact with
SACU and MERCOSUR (India already has a PTA
with the bloc). The free trade agreement (FTA)
connecting various developing regions in the three
continents, is representative of an important trade
pact and of growing South-South co-operation.
Significantly, Indian export commodities to the
African nations represent an enhanced value
addition to the different commodities in its export
basket through addition of technology in some form
or the other. There has been an increase in the
Indian export of high technology products to the
African nations especially in terms of electronics
and communication equipment. Medium high
technology exports from India to the African
nations in form of automobiles and
pharmaceuticals have also witnessed an increase
along with medium –low technology products such
as refined petroleum products. In the midst of all
such growth stories a structural change in the
exports commodities has occurred in the decline of
low technology products particularly in textiles and
apparel which were earlier a major part of Indian
export products to Africa from 41.7% in 2001 to
21.5% in 2011. 37
A new approach in Indian export promotion
activities has been in creating 'resources for
infrastructure' deals in Africa. This is exemplified
by the Essar Oil Limited (in the Kenyan petroleum
refinery sector), ONGC Videsh Limited (OVL) and
Indian Oil Corporation (IOC) consortium (in Libya's
hydrocarbon sector) and Mittal Energy Limited
(MEL, in iron ore extraction in Liberia) have made
resource-seeking deals in exchange for
infrastructure investments. There has been
declared a joint venture between OVL and MEL that
won oil exploration rights in Nigeria in exchange
for an investment of US$ 6 billion to construct an oil
refinery and a power plant, as well as a feasibility
study for a new east-west railway line.
Indian Trade Balance with African Nations
African nations enjoy a trade surplus situation with
India as India’s balance of payments is lopsided
primarily due to import of high value raw materials
from Africa. This trade deficit of Indian trade
balance with the African nations is driven by a
highly tapered range of both commodities and their
origins. The top six African nations who form the
major import destinations for India are Nigeria,
South Africa, Angola, Egypt, Algeria and Morocco
who account for 89% of total Indian imports by
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NeuroQuantology | December 2020 | Volume 18 | Issue 12 | Page 30-39 | doi: 10.14704/nq.2020.18.12.NQ20234
Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations
value mainly due to exports of oil and gas, mineral
ores and gold. In 2011 these nations had a trade
surplus of over US$ 24.5 billion. These import value
of these commodities is not offset by the value of
the total Indian export to the concerned nations.
Thus, India is looking at a highly skewered balance
of payments situation with the African nations in
case of sustenance of the current growth rates in
imports as then by trade surplus of the African
nations could reach US$ 67 billion by 2015. The
figure below demonstrates this clearly as it
showcases that India enjoys a trade surplus with
those nations which are not of the origin of high
value imports and have good export commodity
market for Indian products and services.
Figure 3: India's Trade Balance with Select
African countries 2011
Note: (*) implies Less Developed Countries
Source: UN COMTRADE and WTO calculations
Section III: Exploring New Pathways for
Emergent Friendly Economic Relations
Between India and Africa
African nations have emerged to be important
trading partners for India. The African markets
represent emerging markets for Indian goods and
services where there is a possibility of further
growth. India is also heavily reliant upon the
import of energy resources, other minerals and
natural resources raw material from the different
nations of Africa. The African nations prefer the
developmental assistance extended to them by
India in the form of Lines of Credit from the EXIM
Bank of India as well as different capacity building
initiatives. They also appreciate the fact that Indian
businesses integrate in the local economy and
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support local efforts to develop. The development
assistance extended by India to the African nations
provide alternative sources of developmental
funding without pre-requisites that help the African
nations in attaining their own goals of
development. Therefore, both the partners would
like to maintain their trade relations and the
emergent friendly economic relations as in real
terms of economic growth and international
relations, this is a win win situation for both.
Therefore, to explore new pathways to take this
relationship forward is significant in taking the
relationship forward.
An important arena for such work would be to
increase the market access for each other’s
products through trade negotiations, reduction of
tariff barriers and simplifying of trade regulations
in each other’s markets. This has led to the
beginning of of DFTPI-LDC scheme by India,
assuring duty-free and quota-free entry to products
from 33 of the 54 African nations. Enhanced access
to finance along with market access will also create
an enabling situation for growth of trade practices
for both the partners. There is also requirement of
skill development in product development and
entrepreneurship with an effective business38
environment for the growth in trade to take place
for both India and its partners from the African
continent. The African entrepreneurs are also
interested in technology transfers and institutional
mechanisms of trade that create better trade
mechanisms and improve their own production
practices. They also seek to widen their commodity
basket in export of finished goods to the Indian
market. This will be only possible through people to
people trade practice inter exchanges.
Conclusion
India’s trade pattern with the African nations is
diverse in nature with the possibility of higher
growth in both trade volume and value. Though
currently India imports primarily high value raw
materials from Africa and exports finished
products, yet there is scope for more product and
commodity development in the trade basket. Here
the presence of the Indian diaspora is significant in
acting as a soft power and a bridge between India
and their adopted nations the increase the trade
partnerships that benefit both the partners. Indian
developmental experience and its methods of
dealing with diverse bottlenecks provide an
important learning scenario for developmental
hurdles being faced by the African nations. Here the
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NeuroQuantology | December 2020 | Volume 18 | Issue 12 | Page 30-39 | doi: 10.14704/nq.2020.18.12.NQ20234
Bashabi Gupta et al / Emergent Friendships: Mapping India Africa Economic Relations

developmental assistance provided by India is of The World Today, Vol. 64, No. 4 pp. 26-27
immense importance to the African nations as
means of funding their own developmental needs
and restructuring their debts. It is also significant to
note that India has trading relations with almost all
countries in the African continent. Thus, it is
present in almost all African nations and
contributes to their economy.

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