India's engagement with Africa has evolved significantly over the years, with trade and investment playing pivotal roles in this relationship.
In FY23, India achieved a remarkable milestone, reaching almost $100 billion in bilateral trade with Africa. In comparison, China’s trade with the continent was nearly $282 billion, indicating the vast landscape of economic activities.
In 2021, India positioned itself among the top 10 countries contributing to FDI flows in Africa, amounting to $14 billion. In contrast, China ranked fifth with an impressive $44 billion, highlighting India’s increasing influence.
Indian telecom giant Airtel stands out as a leading mobile service provider in Africa. Recently, it launched affordable 4G smartphones in Rwanda, catering to the growing demand for connectivity.
India's automotive industry, represented by Mahindra and Bajaj, has made significant inroads. Mahindra Scorpios are utilized by Nairobi’s police force, while Bajaj has introduced a compact quadricycle in South Africa, showcasing India’s manufacturing prowess.
Indian Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in Africa by filling economic gaps. They provide essential goods and services that larger investments might overlook.
Moreover, initiatives like India Stack are being expanded to African nations, promoting open-source digital infrastructure to bolster economic development.
India is engaging in triangular projects with countries like the UK, France, and Germany to launch development initiatives in Africa. These projects focus on vital sectors, including agriculture and technology.
Unlike China's state-led investments, India's approach is predominantly private, reducing political conditions and aligning more closely with African sensitivities.
India possesses a long-standing presence in Africa, with entrepreneurs having deep-rooted knowledge of the continent’s market dynamics, traceable back to pre-colonial times.
Additionally, English proficiency in eastern and southern Africa facilitates smoother interactions between Indian and African businesses and governmental entities.
India is recognized as a neutral and trusted partner amid the geopolitical tensions between China and the West. This geopolitically neutral stance helps India maintain positive relations with both sides.
Furthermore, India's investments prioritize local needs, focusing on intermediate goods and services rather than advanced technologies, which aligns well with Africa’s current development priorities.
India's influence in Africa is on the rise. While it currently trails behind China in trade volume, strategic utilization of its strengths, particularly the MSME sector and triangular collaborations, could substantially enhance India's presence.
India’s commitment to sustainable and viable development financing sets it apart from China’s controversial debt-trap diplomacy, paving the way for a more robust partnership with African nations.
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