India and Africa: Partners in Progress and Prosperity

Africa, one of the world’s fastest-growing regions over the past decade, is poised for remarkable economic growth. By 2030, the continent will be home to nearly 1.7 billion people and an estimated USD 6.7 trillion in consumer and business spending. This demographic expansion presents a burgeoning consumer base and a young workforce, creating vast market opportunities for goods and services.

 The Government of India and various African nations have established a strong partnership over the years. This relationship spans trade, investment, development projects, infrastructure, food security, agriculture, education, and healthcare amongst others. Hon’ble Prime Minister of India Shri Narendra Modi has outlined ten principles for engaging with Africa, with economic cooperation as a key pillar. These principles include deepening Indian engagement with Africa, creating local capabilities & opportunities, enhancing market access, increasing investments, leveraging digital tools, and addressing climate change challenges.

 Current Landscape of India-Africa Trade

India-Africa trade stands at USD 83 billion, with Indian exports to Africa at USD 45 billion and imports at USD 38 billion. The trade basket is diverse, encompassing mineral fuels, food products, pharmaceuticals, and more from India, while Africa exports crude oil, diamonds, and copper etc. This diverse range of traded items from both sides, indicates a significant potential for further sourcing from Africa.

 Over the past decade, trade between India and Africa has surged from USD 68.5 billion in 2011-12 to USD 83.34 billion in 2023-24. This impressive growth has positioned India as Africa’s third-largest trading partner, trailing only the European Union and China.

 The African Continental Free Trade Area (AfCFTA) has broadened the scope for India-Africa trade by reducing tariff barriers and enhancing connectivity. Indian industries can capitalize on these opportunities by investing in Africa and creating regional value chains that can integrate into global value chains.

 Historical India-Africa relationship:

The India-Africa relationship is rooted in a rich history of ancient trade routes and cultural exchanges that long precede the modern era of globalization. This deep cultural connection and the potential for mutual benefits have significantly strengthened ties between the two regions in recent years. 

Championing causes for developing nations:

India and Africa have been instrumental in advocating for the interests of developing nations on the global stage, especially within international institutions like the World Trade Organization (WTO). Their collaborative efforts include diverse initiatives from agriculture to healthcare.

 Inclusion of the African Union to the G20:

The inclusion of the African Union as a permanent member of the G20 at the 2023 Summit in India represents a significant milestone for the continent. This landmark achievement not only integrates Africa into the global discussion platform but also paves the way for deeper and more impactful partnerships with the world and with India specifically.

 Energy Sector Synergies:

Today, as India diversifies its energy supply sources, Africa has become a crucial player in ensuring India’s energy security. Countries like Nigeria, Angola, Algeria, and Equatorial Guinea are increasingly significant, contributing a growing share of India’s oil imports.

 What lies ahead:

India and Africa are focusing on key sectors to enhance bilateral trade and tackle shared challenges. Looking ahead over the next 25 years, both regions, with their growing incomes and populations, have the potential to become major players in digital and green markets.

 The bilateral economic bonds between India and Africa have emerged as a testament to mutual respect and shared aspirations for development. To usher in a new era of economic relations, it is essential to build on the robust growth of both economies by exploring fresh avenues in trade, investment, and economic collaboration. Both India and Africa are united in their commitment to sustainable development and economic progress, fuelling a drive to discover innovative partnerships and emerging opportunities.