Is India ready to compete with China in Africa

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Abhishek Jain,  MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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The one country that has invested in billions for fueling its own economy and developing economic and strategic dominance in Africa is China.  But a recent invitation to all 54 African countries to a summit in Delhi clearly shows India’s intention to challenge the Chinese hegemony in the region. Indian leadership says that the new relationship will be based on mutual benefits, not exploitation. Traditionally India enjoys a very congenial relationship with most of the African countries. Trade between India and Africa has almost tripled from 2006, up to its current level of around $72 Billion per year that however is far behind China’s trade with Africa which is more than $222 Billion. But the presence of business leaders from every single African country shows the confidence Africa shows in India.

Interestingly most of the African countries like to subscribe to the Chinese way of doing things when it comes to maintaining business relationships, political structure, and labor laws, rather than following the democratic and bureaucratic way of accomplishing tasks. But as the African economy will diversify in the coming days, especially in the service sector, India can play a very crucial and decisive role.

Factors like geographical proximity (which reduces transportation cost) and cultural affinity (close to 3 million African citizens of Indian descent) favors India compared to China. However, in the end, everything would depend on how Indian corporate champions, diplomats leverage itself to become a stronger player in comparison to China. Apart from the direct investments, Africa will be looking towards Indian support for a motley of issues including regional integration and climate change.

India can contribute tremendously to various areas which include development assistance, skill enhancement, transfer of technology and low -cost innovation benefiting India in the longer run. Questions will always be asked why India is interested in fixing Africa when they have a lot to do at home. But domestic economic development and support to Africa should not be seen in contradiction. As becoming the part of the growth story of Africa would not only help India in gaining influence in the region but also ensure supply of much needed precious commodities and crude.

References

http://www.idsa.in/idsacomments/why-africa_dshaw_130116

http://www.tribuneindia.com/news/comment/african-connection/150416.html

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