Written by Ian Taylor.

India’s connections with Africa have been relatively overlooked in comparison to that of China’s. Such neglect of India’s rise in Africa is despite the important implications of the growing presence of Indian corporations and New Delhi’s political connections to Africa. Such connections represent a further diversification of Africa’s international relations away from “traditional” North-South linkages and arguably contribute to a greater range of options for the continent as the twenty-first century progresses. In this light, this article thus seeks to analyze some of the main implications of the growing Indian relationship with Africa.

Although, Indo-African relations can be traced to ancient times and Africa is host to a long-established Indian Diaspora, in the contemporary period a new set of dynamics are emerging that are rapidly expanding relations. Indeed, 2005–06 was dubbed ‘Our Years of Africa’ by New Delhi. In contrast to the Chinese, who largely concentrate on state-to-state deals, extractive industries and infrastructure development, the Indian presence in Africa is largely commercially-driven, private, and concentrated in the telecommunications, pharmaceuticals and manufacturing sectors.

There are diverse motives for the variety of Indian actors currently establishing themselves in Africa. From the Indian state’s perspective, energy security has been seen as paramount, as has the ambition to be taken seriously as an important global player. Equally, as India’s economy continues to grow, Indian business interests have ambitions of themselves to expand their commercial empires. Given that India’s economy is currently one of the fastest growing in the world, this is arguably unsurprising and the modalities of Indo-African relations do need to be contextualized within the milieu of a burgeoning—and increasingly confident—India.

Officially, Indian foreign policy roots itself in Nehru’s inclinations for multilateralism and South-South solidarity. As part of its commitment to multilateralism, India has long emphasized both a cooperative new world order and the mutuality of Southern interests in combating global inequality. This rhetoric plays out well across Africa and has at times enabled New Delhi to project itself as the spokesperson of the global South, a role that India often (even if only implicitly) competes for with China. However, India’s diplomatic strategy cannot be said to be grounded in an idealism predicated purely on South-South solidarity. Contemporary India’s foreign policy is more pragmatic than previous incarnations and the focus these days is very much on the importance of national interests, particularly economic in nature. This is linked to a wider move within India away from socialist-inclined economic policies to those more in line with neo-liberalism. A surging economy within India requires new markets and new sites for Indian investment opportunities. India-Africa trade has grown rapidly in the last few years, from $3.39 billion per year in 2000 to currently around $51 billion per year. Competition with Chinese companies for these productive investment locations almost surely stimulates recent Indian energies, although India is massively playing catch-up to China in Africa. Thus India has copied China’s Forum on China-Africa Cooperation in developing its own India-Africa summit (the first India-Africa summit occurred in April 2008).

At the policy level, trade policy has been crucial, operating alongside New Delhi’s commitment to both multilateralism and South-South solidarity. This is also reflected in India coordinating closely with leading African countries on the Doha Round of negotiations at the WTO and in Indian membership of the India, Brazil and South Africa Dialogue Forum (IBSA), formed in 2003. Both IBSA and the Africa-India Forum were established with New Delhi’s active involvement due to India’s aim to change the world’s perception of India—from being a recipient to being a donor—in order to boost its global political standing.

Indeed, India has emerged in recent years from being an aid recipient to an important aid donor. However, as there is no central agency managing disbursals of Indian development assistance it is difficult to ascertain exactly how much India gives. At the second 2nd Africa- India Forum Summit in May 2011, it was announced that $5 billion aid for the next three years would be made available to Africa from New Delhi, with an additional $700 million for establishing new institutions and training programs across the African continent. In terms of geographical distribution most of New Delhi’s assistance goes to India’s neighboring countries, followed by African states. As part of its aid profile, India has cancelled the debts owed to New Delhi by countries under the Heavily Indebted Poor Countries (HIPC) initiative and also rationalized commercial debts.

The state-owned Export Import Bank of India (also known as Exim Bank of India) has been a major agent of Indian aid and financial support to Africa. For instance, the bank has lent money to the Common Market for Eastern and Southern Africa (COMESA) to be used to acquire capital goods from India, and the bank has also financed Ethiopian sugar production, agricultural development in Botswana, and rural electrification and water provision in Ghana. Such schemes actually make up around 30% of total Indian aid to Africa. About 60% of Indian aid is then applied towards technical assistance, with human resource development being at the core of India’s development efforts in Africa. Of course, Indian aid to Africa is not an expression of altruism. India, like all other countries, actively leverages its development assistance to promote specific political objectives. Indian aid not only helps to facilitate an increase in Indian economic activity across Africa, but also serves to project India as a major power and gain a support constituency.

Most of Indian trade with the continent is with West and Southern Africa; West Africa primarily due to the ongoing discoveries of oil reserves, and Southern Africa because of Southern Africa’s developed markets—South Africa is India’s largest trading partner in Africa. The South African relationship actually demonstrates the two-way nature of Indo-African commerce. For instance, Airports Company South Africa (ACSA) won the bid in India for the modernisation of Mumbai airport, and in 2006 South African Breweries announced that they would invest $225 million in India over the next five years. The supermarket chain Shoprite Checkers has a presence in India with the first franchisee, Shoprite Hyper Mulund open in Mumbai.

Interestingly, Indian efforts to gain access to African oil shows less of the somewhat reckless attributes found in much of the Chinese efforts to do the same. For instance, in January 2006 ONGC put in a winning $2 billion bid for an offshore Nigerian oil field, only to see the Indian Cabinet block the deal on the grounds that it was not commercially feasible. Consequently, a Chinese company bought a 45 percent working interest in the field. What was interesting here was that the Indian government deemed the deal as too risky, with potential political repercussions. Yet for the Chinese oil company, such concerns did not appear to be paramount—an interesting reflection on the comparative risks Beijing and New Delhi are willing to take to gain access to oil supplies.

Whilst Indian activity in Africa is multi-faceted and New Delhi’s official policies are clearly not purely altruistic, the renewal and upsurge in the Indian presence in Africa does benefit many of the continent’s economies by helping to provide new communication and transportation networks that are necessary for economic growth as well as skills development through technical assistance. This focus on training reflects India’s own preference for sustainable assistance. There is widespread criticism among Indian policy-makers of short-term projects that rapidly unravel following the ending of the three- or five-year funding cycle. Such an attention in India’s aid program is arguably more suited to the African situation than the simple delivery of infrastructure by China, irrespective of the local conditions and ability to maintain such fixed assets. However, it is also possible that for Africa’s part, Indian and Chinese engagement in Africa is not as a zero-sum competition but may well be complementary, with Beijing supplying the hard infrastructure quickly and efficiently, whilst New Delhi offers skilled technical services and assistance at a much lower cost than that provided by the West.

Indirectly, an emerging India within the international system is of great political significance for the developing world as New Delhi increasingly uses it nascent economic and political muscle to advance improved trade and political conditions for itself, but also for developing nations more generally. In tandem with other developing nations, India is increasingly pushing for a reconfiguration of some of the institutes of global governance. In this regard, African states are seen as useful allies and a valuable support constituency for New Delhi’s aspirations. Notably, almost all African countries back India’s bid for a permanent seat at the United Nations.

Currently, Indian activity in Africa may be said to constitute a middle ground between China’s “hands off” stance and the intrusive conditionalities associated with Western policies. Indian activities arguably provide an alternative option to Africa between the two extremes. Media representations of India’s role in Africa have argued that India’s strategy and strengths in Africa are quite different. China concentrates on resources-based investment, while India has focused on capacity building. Whilst not wishing to romanticize Indian ties with Africa, there is an element of truth here. Overall, mutual political and economic cooperation (as well as aid) in exchange for increased economic interaction and political support for India’s rise on the global stage help us to understand current Indo-African ties.

The rise of India in Africa, alongside other “new” actors such as Brazil, China, Turkey, Iran etc. is potentially a great opportunity for the continent. Firstly, it increases competition for Africa’s resources, thereby reducing transaction costs and improving Africa’s capacity to gain access to goods and services for more acceptable prices.  Secondly, the interest of India (and other new actors’) in African markets will potentially offer up a major boost to the continent’s economies, possibly aiding in the industrialization process, with new infrastructure being laid out, augmented receipts from commodities, new market opportunities and new financing mechanisms being made available.  Thirdly, India is a middle income nation that is emerging from a state of underdevelopment. New Delhi’s experience in how to navigate a post-colonial environment is arguably of more relevance to African states than any policy advice emanating from Western capitals. Thus the experience of a country such as India operating in Africa and seeking out some sort of “partnership” with Africa potentially holds more for the continent in terms of demonstration effects and learning.

Having said all of this, controlling and managing Indo-Africa relations is crucial for the continent if it is benefit from the opportunities that an increased Indian attention to Africa affords. The central question in Indo-African relations, just as with all of Africa’s international relations, is the key challenge for the continent: poor governance and high levels of corruption. It is up to Africans to negotiate with Indian actors to ensure that the benefits accrued from Indo-African ties are evenly shared and that Indian interest in the continent, alongside others, may help serve as a catalyst for economic revitalization. How this plays out very much depends on the political leadership in each and every individual African country.

Ian Taylor is Professor in International Relations and African Politics at St Andrews University and Chair Professor in the School of International Studies, Renmin University, China. His many academic books include China’s New Role in Africa.