Trade between Africa and India has increased more than eight-fold from USD 7.2 billion in 2001 to USD 59.9 billion in 2017, accounting for over 8 per cent of India's total trade, reveals a study which has pegged trade between the two countries could double by the year 2021.
"Trade between Africa and India has increased more than eight-fold from US dollar 7.2 billion in 2001 to US dollar 59.9 billion in 2017 making India Africa's fourth-largest national trading partner, accounting for more than 6.4 per cent of total African trade in 2017, up from 2.7 per cent in 2001. Trade with Africa now accounts for just over 8 per cent of India's total trade, but this is only marginally higher than the 7.6 per cent in 2001," claims the study.
The joint study "Deepening South-South Collaboration: An Analysis of Africa and India's Trade and Investment" was conducted by African Export-Import Bank (Afreximbank) and the Export-Import Bank of India (Exim India).
It attributes the surge in bilateral trade to the growing stock of foreign direct investment undertaken by African and Indian corporate entities and deepening economic and political ties between Africa and India.
According to the study strategic initiatives, most notably "Focus Africa" launched by the government of India in 2002 to boost trade and investment between Africa and India, and India- Africa Forum Summit launched in 2008 are responsible for this growth.
"Other key drivers include the government of India's Duty-Free Tariffs Preference Scheme for Least Developed Countries and the strengthening cooperation between Afreximbank and Exim India," said the study.
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"Despite the impressive rate of trade growth, which has enabled Africa and India to diversify their trade destinations and, in the process, mitigate their exposure to global volatility and adverse terms-of-trade shocks, trade between the two parties is still driven by a limited number of products," it said.
"Primary commodities and natural resources account for around 75 percent of Africa's total exports to India. India's exports to Africa are dominated by refined petroleum and pharmaceutical products; over the last five years, these two products have accounted for about 40 per cent of total exports into African markets," it claims.
Further, it says that Africa-India trade could double by 2021, especially if appropriate steps are taken by sovereign and corporate entities to reap the full benefits of growth and of the potential offered by the two trading partners.