LoCs to Double to $5.4 bn Jvs in Agri-Biz, ICT, Rlys,
Oil & Gas, Power & SMEs offer Potential
India to Triple Trade with
Africa to $100 bn in 5 Yrs
Political and business leaders from India and as many as 32 African countries have pledged to boost bilateral trade at a partnership summit held recently in New Delhi. Indian officials said that this country expects to triple trade with Africa over the next five years to reach $100 billion, in a bid to catch up with China. India is now striving to strengthen its ties with the region and plans to double credit lines to $5.4 billion over the next five years. The Indian Government has also provided $500 million for projects from the "Aid to Africa" budget. Despite a global economic slowdown, India is planning a slew of projects to be set up in Africa in agriculture, small industry, mining, Information and Communication Technology (ICT), oil pipelines, chemical industry, power generation and transmission among others. India's trade with Africa soared from $967 million in 1991 to $35 billion in 2008, but remains way behind China's nearly $100 billion. China trailed India in trade with Africa a decade ago, but its investments have since risen considerably on the back of major energy construction and mineral extraction projects.

India's optimism stems from the outcome during the India-Africa Business Partnership Summit, 2009, where hundreds of meetings, were held on the sidelines between representatives of Indian and African companies. Government officials and industry leaders believe that these meetings could result in hard deals. Officials said Africa could benefit from India's low cost business models.

"India can bring in its low cost expertise in the manufacturing sector and in Information technology...there is so much India can offer to Africa," said Maurice Kagimu Kiwanuka, Uganda's Minister of State for Economic Monitoring. Uganda has $100 million trade with India and according to Kiwanuka, it could double in less than five years as Indian companies are planning to invest in sectors such as food processing and textiles.

"We share an excellent relationship with Africa. The economic slowdown will not affect trade and we will withstand the financial crisis," said Anand Sharma, India's Minister of State for External Affairs At the Summit, India has made known that it will donate $1 billion to connect 53 African countries through a satellite and fibre-optic network to promote "Virtual" medical and educational programmes.
Apart from government to government relations of today, this country's ties date back to the British colonial period when thousands of Indians were taken to Africa as indentured labourers. Many stayed on, and there are now close to two million people of Indian ethnic origin living across countries dotting Africa.

India's External Affairs Minister Pranab Mukherjee, in his address said Excerpts.

It is less than a year since we had the privilege to host the India-Africa Forum Summit in New Delhi. It was an occasion to celebrate our friendship and renew our commitment to the great continent of Africa. The Delhi Declaration and the Africa-India Framework for Cooperation adopted at the Summit now serve as the contours for our systematic engagement in the coming years.

India and Africa are old civilizations but young nations learning as we grow. Today the Indian economy is over a trillion dollars with key strengths in the services, manufacturing and agricultural sectors. We have also made some advances in the core areas of health and education. Capacity building and human resources development in fact, have always been central to our cooperation with Africa since our independence. Success credited to us in economic growth and development areas is, as always, available for sharing with friends in Africa, within the limits of our capacities and capabilities. Our commitment to Africa is total and we look forward to a close partnership with Africa in its economic resurgence.

I am pleased to see that sectors at the core of economic development and growth including Railways, Road and Construction; Healthcare and Pharma; ICT; Power; Mining; and, Agriculture - have been carefully identified and selected for this summit.

For this to happen, trade, tariff and investment impediments will have to be vacated in a hurry. In this context, and as announced earlier, our “Duty-free preference scheme” for the Least Developed Countries, 34 of which are African countries, covers 94 percent of India's total tariff lines. It is also our commitment to more than double the amount on Lines of Credit to $ 5.4 billion for the five-year period beginning 2008-09: $ 500 million will also be provided over the next five to six years for projects in critical areas from the 'Aid to Africa' budget.

Economic and commercial ties between India and Africa are not new. These exchanges have been ongoing for centuries across the Indian Ocean, and have benefited peoples from both sides. With positive changes and sustained economic development in both India and Africa, this economic and commercial interaction has diversified and deepened since the later part of the 20th century. Bilateral trade has grown from a small 5 billion dollars in 2001-02 to around 30 billion dollars presently, a six-fold growth. Investment levels have also increased across a wide range of sectors such as agriculture, small scale industry, mining, ICT, oil pipelines, automotive plants, chemical industry, power generation and transmission etc... You will agree, however, that these existing trade and investment levels do not reflect the true potential. Less than 8.0 percent of India's exports are destined for Africa. Our imports from Africa are also around the same proportion of our global imports. After Asia, Africa is the second fastest growing region. We have signed trade agreements with almost 30 countries in Africa.

I, therefore, call upon Indian and African business partners to step up their business engagements. Indian companies should accelerate their investments and technical tie-ups with African partners. Cost-effective and intermediate Indian technologies and our large human capital base give us a unique advantage.

African Infrastructure Needs
The infrastructure needs of Africa are enormous. These also present good opportunities for Indian businesses, as do the growing demands in Africa for new technologies, engineering services and manufacturing capabilities for local value addition. There are millions of young people in Africa who can be employed in the manufacturing and services sectors. The communities of Indian origin in many parts of Africa are also an added advantage.

Agriculture & Food Security
An important area of cooperation between India and Africa has been agriculture and food security. The India Africa Forum Summit laid a special emphasis on this sector. The Declaration of the India-Africa Framework for Cooperation involves programmes for agriculture. These include irrigation projects, opening up new lands for cultivation, exchange of seeds, technology, food processing, live stock development, water management, measures to confront the growing threat of climate change, capacity building and fisheries. Some Indian companies have already begun to explore opportunities in Africa in the production of pulses, cereals and oilseeds. I am confident that more will do so in collaboration with African enterprises and Governments. A number of Lines of Credit have already been extended by us for the agriculture sector. These should provide opportunities to Indian and African partners to undertake projects which will be of direct benefit to farming communities.

We are also exploring possibilities of comprehensive economic cooperation agreements with the Common Market of Southern Africa (COMESA) and the East African Community (EAC). We are, therefore, specially delighted and honoured to have among us today, President Paul Kagame of Rwanda, who is also the current Chairperson of the East African Community.

A draft framework agreement was recently initialed in Delhi for a Preferential Trading Arrangement with the South African Customs Union (SACU). With the South African Development Community (SADC), we are developing projects in a number of sectors.

Global Economic Meltdown
These are fast changing times. In less than six months, a severe global financial crisis has morphed into global economic meltdown which may not have fully unraveled as yet. The repercussions are undoubtedly severe. While the crisis began in the West, the developing countries cannot remain unscathed. Estimates are that global growth and trade may grow at the slowest in over two decades. The financial regulatory framework in many countries will change as will economic expectations. It is no surprise that the model of -international financial governance has also come into question.

The current crisis brings out global interconnectedness. India has over the last few years grown at about 9.0 percent per year which gave us the distinction of being the world's second fastest growing major economy of the world. Our economy is also exposed to the global market, and will therefore, not escape some slowdown.

We are, however, better positioned to withstand the worst. Our economic fundamentals are principally domestic demand, domestic savings and investments. Indeed, India is one of the world's safest markets. We are confident that a 7.0 percent growth is not beyond us this year and that it shall not be long before we fully regain our growth momentum. We see our growth and development as an open opportunity for mutual gains with our African associates.

Friends, India-Africa relations have always been multi-focused, cutting across many international issues and challenges. It is our desire that on crucial global concerns like climate change, food and energy security, health, jihadist terrorism, marine piracy and democratization of international institutions we continue to enhance our cooperation and dialogue.

Delivering the Keynote address, Rwanda's President and Chairman of the East African Community Paul Kagame, in his presentation, underscored three main points that put into context Africa's development challenges, and the framework for addressing them sustainably, which include mainly business partnerships, the subject of the Summit.

Following are excerpts from President Kagame's address.
The first issue I briefly touch on is how we in Africa are confronting factors that have historically obstructed the transformation and utilization of our continent's enormous human and natural resources to create prosperity.

The second point revolves around the changing global realities in particular, the rise of economically successful countries outside the traditional power bloc of the West, such as India, which broadens the field for forming quality partnerships with Africa for greater wealth-creation.

My third point is about the importance of this Summit in terms of practical steps for forming business partnerships.

Challenges of Competitiveness
We in Africa, in particular in East Africa, stand challenged to move towards productive and competitive economies that generate significant wealth relative to our development challenges.

In this respect, the greater part of the value-chain of any economic activity, be it in agriculture, mining, petroleum or manufacturing, should no longer be the preserve of “other” societies Africa has to domesticate these processes because that is how wealth is actually created.

Neither development aid, nor reliance on primary commodities will transform our countries indeed this is what largely accounts for our underdevelopment.

The past decade, however, has seen East Africa and Africa in general make considerable progress in transcending this mindset and practice, beginning with improved security, peace, and stability.

With regard to trade and investment, increasingly there is a broader consensus on accelerating regional integration, improving business climate, and the modernization of regional infrastructure.

For example, the process of creating a free trade area that incorporates the East African Community, the Common Market for Eastern and Southern Africa, and the Southern African Development Community is underway bringing together nearly 600 million people into a single market.

There are also important developments within the existing regional markets. In East Africa, we are working on eliminating non-tariff barriers and modernizing infrastructure, integrating our capital markets, and generally harmonizing key policies and regulations to reduce the costs of doing business in our market of almost 130 million people.

In Rwanda's case, regional integration is synonymous with development trade, investment free movement of human and financial capital forms the core of our development vision.

This is why we always request investors to consider our country not only in its own right, but also as a strategic intersection of existing regional markets.

Today's global political economy reflects shifting realities with new robust actors playing more active roles, such as India whose interactions with Africa continue to increase.

While for instance the total trade between India and Africa was $6.5 billion in 2002-03, it increased to almost 35 billion last year (2008).

Similar trends apply to Indian investments in Africa that stood at $3.7 billion in 2006-07 and almost doubled in a single year to $6.8 billion in 2007-08.

Historical Connection
The rich and multidimensional relationships between India and Africa are not new. In East Africa, the descendants of Indian immigrants during the colonial phase became the backbone of commerce and industry I am pleased to note that currently, among leading entrepreneurs and industrialists in our region there are those who hail from this history. Meanwhile, India itself was a staunch advocate of African independence and remains a consistent friend of our continent.

Indo-African common purpose and principles in the international sphere are widely-known, for example, our shared view that agriculture should remain key to the Doha Round trade negotiations, together with the necessity to reduce trade-distorting agricultural subsidies in developed countries.
Further, we entirely agree on the need to reform international multilateral institutions to reflect changed realities it is absurd that with a combined population of about two billion people, neither India nor Africa is represented in United Nations Security Council.

We gather here at this Summit to take further steps in building strong relationships, at the core being business partnerships indeed the stage is set for intensiying our investment interactions especially in the identified priority sectors of health, IT, energy, infrastructure, construction, mining, agriculture and financial services.

The East African market offers enormous investment opportunities in each of these sectors not only in individual countries but also across region, especially in the development of strategic regional infrastructure projects, such as the railways.

We appreciate very much those Indian companies that are already active in East Africa and on our continent in general and trust that more of you will join us, particularly after this important partnership Summit.

Let us challenge ourselves at this New Delhi meeting to engage in results-oriented bilateral as well as trilateral round tables for each sector identified for collaboration; formulate realistic agendas for follow-up; and adopt timelines for implementing joint projects.

Reflect on how we, as Indian and African government and business leaders can quickly utilize the framework, financial support, as well as easier access to Indian markets made possible by the generous offer of the Government of India at the 2008 India-Africa Summit.

This Summit, has undoubtedly taken India-Africa relationship to an even higher level for which we express our sincere appreciation to the Government and People of this country.

We make a pledge here that we in Africa, East Africa, and Rwanda, take the opportunities availed by this Summit very seriously and are ready to play our part in creating a conducive investment climate for Indian and African investment in our respective spheres.

I look forward to a fruitful dialogue based on country presentations indicating investment opportunities in the different African countries and regions.

Let us have, at the end of the Summit, a concrete roadmap of embarking on an India-Africa collaborative journey, whose ultimate prize is no less than greatly improved lives of our citizens and healthy investment returns for Indian and African investors.

Focus Sectors
• Healthcare & Pharmaceuticals • Information & Communication Technology (ICT) • Power • Agrifood & Allied Services • Financial Services • Mining • Roads & Railways • Housing & Construction • Ministers/ Senior Government officals/key decision makers from the identified sectors • Leading private and public sector companies • Investors • Procurement Agencies and Regulators • Regional bodies • Multilateral Funding Agencies • Financial Institutions • Manufacturers and Service Providers • Importers and Exporters
• Technology and Equipment Providers • Institutions & Consultants

Summit Highlights
• Two day international conference to gain insights into the African and Indian markets
• Two day international exhibition to showcase the leading players of India and Africa in the identified sectors
• Round tables and B2B meetings with the captains of industry for inviting investments and joint ventures