India vis-a-vis China in African continent

In the recent past, there have been increasing incidences of rising Asian trade as well as investment in the African continent.

Created On: May 20, 2014 15:43 ISTModified On: Jun 5, 2014 15:45 IST

In the recent past, there have been increasing incidences of rising Asian trade as well as investment in the African continent. These are nothing but a miniature version of recent global trend which also points out increasingly growing commerce among the developing economies.

Two of the most promising and emerging economies of Asia- India and China are at present, at the crossroads of trade and investment between Africa and Asia, which is bound to increase manifold.

Understanding Economic Activities between Asia and Africa
Economic activities that are taking place between Asia and Africa are prospering like anything. It is also worth noticing that this is not something that is new because India’s economic trade between the Southern and Eastern regions of Africa goes back to the era of Silk Road. As far as China is concerned, it has remained an active participant in the African continent during post-colonial era.

However, the recent of investment between Asian countries of China and India and African continent have become exceptional. At the same time, various businesses in India and China are pursuing different strategies in Africa. The most lucrative industries in Africa are telecommunications, tourism, processed foods, consumer goods, back-office services as well as manufacturing sector.

India’s Presence in Africa
Africa is one of the most important partners of India. This is so because India can get a chance to engage with the continent that is rich in resources and also, there is an opportunity for India to be among world powers such as China, the European Union and the US.

The ties between India and Africa have proliferated continuously in the recent past. It is also important to note that the bilateral trade between these two economies has soared 20 times in less than a decade. The volume of trade has jumped from 3 billion US dollars in 2000 to 60 billion US dollars. Apart from all this, the trade between Africa and India has increased by 24.8 percent in past 10 years and an interesting thing is that it is almost equal to the 26.3 percent of Sino-Africa trade.

China’s Presence in Africa
China is enjoying its renewal of friendship with Africa. Africa remains a rich source of oil and coal for China and as far as Africa is concerned, China is seen as a perfect commercial partner without any obligation of imposing special political conditions on the suppliers. However, China-Africa relations can become sore because the US is concerned about diversification of the oil import sources.

It should also be observed that after rising as the manufacturing nation in the beginning of 1990s but with the dearth of natural resources, China looked forward to the hub of these resources, i.e. Africa. And, China has overshadowed the US as the largest trading partner of Africa in the year 2011 with US$166 billion trade volume. Out of the overall global trade share of Africa, China alone holds 16.9 percent.

Conclusion- Who gets an advantage?

While in Africa, it may be a battle of China versus the ROW, India clearly has a lot of advantage over its competitors like the European Union and the US. Another advantage enjoyed by India is a very sturdy Indian Diaspora in a range of African nations, mainly Southern and Eastern Africa.

The strategy of India is more subdued in comparison to China. While Beijing follows the aggressive economic strategy in capturing mineral resources of Africa for its fuel growth, New Delhi, on the other hand, focuses on developing stronger and enduring economic partnership with Africa, which is far more beneficial for both the nations. India’s strategy is to not replicate the colonial systems of exploiting Africa’s wealth. In contrast, China’s stronger emphasis on extracting resources from Africa has given it a repute of neo-colonialists.

In May, 2014, when the Vice-President of India, Hamid Ansari, visited Africa to attend 50th Golden Jubilee Celebration of African Union, India became one of the ten select partners of African Union which also include Addis Ababa, the US, Russia, China, Brazil, France and the European Union.

It can be concluded that India’s presence in Africa is more optimistic and its future looks brighter, provided the Government of India functions with a right strategy and proper approach. India has to see that hanging key projects worth 6000 crore Rupees, which landed in such a position due to fund crunch, need to be brought back to the track because an approach like this would not flourish the cause of India-Africa relationship.

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