Snapticle

India-Africa relations and the role of India's G20 presidency

Why in news

India is now under the G20 presidency, so India Inc (Incorporated) should align efforts with the African Continental Free Trade Area's (AfCFTA) agenda for the benefits to flow in both ways. India's participation with African nations can be a win-win situation for both.

About India and Africa's partnership 

  • Both countries share a long and prosperous relationship. India's freedom movements are inspirational for African nationalists in the desire for freedom from colonialism.
  • Lucrative trade and investment opportunities can create mutually beneficial relationships between India and Africa, which desire to collaborate for a better future. AfCFTA plays a significant role in this regard. It provides opportunities and scope to create the largest free trade area in the world, and geographically many countries are actively participating in free trade areas.
  •  The AfCFTA provides an opportunity to lift more than 30 million people out of extreme poverty and requires conducive policies to realize its potential. 
  • It is planned that the AfCFTA will boost intra-regional trade by creating a single market for goods and services, which will facilitate the movement of people and promote industrial development as well as sustainable and inclusive socioeconomic growth.
  •  It will also resolve the issue of multiple memberships according to Africa's agenda for 2063.
  • India's cumulative investment in Africa is at $70 billion. It has extended the lines of credit (LOCs) worth $12.26 billion to African countries. 
  • So far, 163 projects have been completed, 66 projects are under execution, while the other 88 are in their pre-execution phase in various sectors. Investments are taking place in oil and gas, mining, banking, pharma, textiles, the automotive industries, and agriculture. 
  • The growth of India-Africa relations is evidence of the rising developmental projects by India. India worked extensively on these projects via concessional loans, grants, and capacity-building programs. All of these have played a role in the socioeconomic development of Africa.
  • India can play an active role in developing cooperation and leveraging the new opportunities that the AfCFTA presents. With the use of India's industry strengths, advancement of digital transformation can be harnessed through innovation and technology transfer, and investment can be set up in cross-border supply chains to create job opportunities and help build ports, airports, roads, and roads, other infrastructure to facilitate commerce. All these efforts should be in sync with the priorities of the AfCFTA.
  • On the 17th Confederation of India Industry Exim Bank Conclave on the India-Africa partnership. Discussion took place on how to catalyze Indian investment in Africa. Some key areas have been marked out for special focus-
  • India-Africa bilateral trade and investment need to be promoted under the AfCFTA. India could align its efforts with FTA (Free Trade Agreement) priorities to gain more markets for access to its goods and services. 
  • By trading with Africa, opportunities in services like IT and other new technology areas have a wide scope. 
  • Opportunities in pharmaceutical and health areas are of special significance after the post covid era. Indian industries have little scope in this area. 
  • A robust and advanced digital infrastructure could accelerate economic growth and the overall economic development of all sectors. Digital transformation would also contribute to the achievement of Africa's agenda of 2063. India, the world's third-largest startup ecosystem, could count on its strengths to fortify the digital infrastructure of the whole of Africa.
  • India should actively build the infrastructure for the cross-border supply chains to operate efficiently in Africa. The AfCFTA seeks to facilitate international supply chains for food, pharmaceuticals, and other essential goods. 
  • Empowerment of youth and women are the prerequisite for development. To achieve this, skill development and capacity building play a vital role. India has proactively facilitated arrangements in front of African nationals. Indian Technological and Economic Cooperation program is helping Africa to provide opportunities for people to learn new skills and acquire knowledge through training programs.
  • Currently, nearly 90% of the labour force in the informal sector are women in Africa. Women mainly work in education, healthcare, and the tertiary sector. Women-oriented sectors can benefit from developmental cooperation under the AfCFTA's auspices. These efforts can be scaled up greatly by providing benefits to African youth and women, further enhancing India's brand image across the continent as its economy emerges. 

If taken, these measures would contribute to the long-standing India-Africa partnership and create a win-win situation for both countries.

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