India-Africa trade and engagement is on a decline due to various factors.
Policy implementation in this regard needs a critical review as Africa is considered a foreign policy priority by India.
How significant is Africa to India?
India’s top five markets today in Africa are South Africa, Nigeria, Egypt, Kenya and Togo.
The countries from which India imports the most are South Africa, Nigeria, Egypt, Angola and Guinea.
India’s top three exports to Africa are:
mineral fuels and oils (processed petroleum products)
pharmaceutical products
vehicles
Mineral fuels and oils (essentially crude oil) and pearls, precious or semi-precious stones are the top two imports.
The composition of the India-Africa trade has not changed much over the last two decades.
What is the current trade scenario?
In 2020-21, India’s exports to Africa saw a reduction of 4.4% over the previous year.
And imports saw a reduction of 25%.
Thus, bilateral trade valued at $55.9 billion in 2020-21, fell by $10.8 billion compared to 2019-20.
India’s investments in Africa too saw a decrease from $3.2 billion in 2019-20 to $2.9 billion in 2020-21.
Total investments over 25 years, from April 1996 to March 2021, are now just $70.7 billion.
This is about one-third of China’s investments in Africa.
What are the key reasons for the decline?
Africans have been deeply affected by the COVID-19 pandemic and remain ill-equipped to deal with it.
Africa experienced a sharpened international competition in the first two decades of the 21st century.
This was known as ‘the third scramble’.
A dozen nations from the Americas, Europe and Asia have striven to assist Africa.
In turn, they aimed to benefit from its markets, minerals, hydrocarbons and oceanic resources.
Thereby, they could also expand their geopolitical influence.
China successfully used the pandemic to expand its footprint by increasing the outflow of its vaccines.
Unfortunately, India’s ‘vax diplomacy’ has suffered a setback.
India had the geopolitical compulsion to concentrate on its ties with the UK, the EU, and the Quad powers, particularly the US.
Consequently, the attention normally paid to Africa by India lost out.
Given the condition in other countries due to the pandemic, flows of assistance and investment to Africa have generally decreased.
What is the way forward?
For mutual benefit, Africa and India should remain optimally engaged.
India's External Affairs Minister, in the UNSC's open debate on conflict and post-pandemic recovery in Africa, regretted that “the voice of Africa is not given its proper due.”
It is time to seize the opportunity and restore Africa to its primary position in India’s diplomacy and economic engagement.
Fresh financial resources for grants and concessional loans to Africa must be allocated, as previous allocations stand almost fully exhausted.
It is essential to impart a 21st century complexion to the partnership with Africa.
This means developing and deepening collaborations in health, space and digital technologies.
Also, to overcome the China challenge in Africa, increased cooperation between India and its international allies is important.
