In 2017-18, India accounted for 6.4 percent of the continent’s total trade at a value of USD 62.6 billion emerging as Africa’s 3rd largest trading partner, whereas the value of China-Africa trade was around USD 185 billion in 2018.
There is an enormous untapped potential for enhancing India’s economic relations with the African continent, encompassing not just trade and investment but also capacity development, technical assistance, and provision of services including healthcare and education. India shares several commonalities with the countries in this region in terms of high economic growth rates, large domestic markets, a young demographic profile and abundant natural resources.
Agro-processing, manufacturing, mining, textiles, FMCG15, infrastructure development and construction, to name a few, can offer huge potential to Indian companies. Against the backdrop of an uncertain global economic recovery, Africa’s macroeconomic prospects remain favourable.
The India-Africa trade and investment relationship has been increasingly vibrant in recent years. The share of Africa in India's total exports was 9.7 percent in 2013-14. The government lays great emphasis on institution building in Africa in order to promote the sustainability of the relationship. India has already stepped up its assistance in Africa and intends to further increase aid-for-trade assistance in the coming years. The private sector both in Africa and in India see India's development assistance as having a comparative advantage in many services sectors, including ICT, education, vocational skills development, health, and financial services. Facilitating investment by private Indian entrepreneurs, especially in agriculture, in Africa, is another means to build productive capacity and generate employment there while bringing about greater integration between the major African economies and India. Greater cooperation in agriculture and agro-processing would also contribute to food security in both Africa and India.
A small but significant step taken by India is a 3-year Technical Assistance Programme for the cotton sector which is underway for 6 African countries and is in the final year of implementation. The response to this programme has been extremely positive and the government is looking to expand this programme both in terms of its scope and coverage. Further, there is tremendous scope for India to help African countries especially LDCs to augment their capacity in international trade policy and law as well as to provide sector-specific training for expanding trade.