India, China in race to capture Africa trade pie

India to hold Africa summit in New Delhi next month.

Hotlines between New Delhi and Addis Ababa, the headquarters of the African Union (AU), are working overtime to make next month's India-Africa summit as big a success as a similar event organised by China last year.

"We are seeking ideas from individual countries on cooperation and joint projects instead of holding a show where deliberations are driven only by trade and business," said Anand Sharma, Minister of State for External Affairs.

Though authorities in New Delhi, including Sharma, deny India is nervous over the inroads China had made into Africa during last few years, sources said, "The summit will end with a political declaration and a time-bound working plan (on bilateral cooperation) to beat the Chinese investment and trade-driven approach."

New Delhi's intention to give a new thrust to its relations with Africa was evident when it announced a hike of 60 per cent in its aid to the continent for the next financial year.

The 2008-09 Budget presented in Parliament last week, enhanced aid to Africa from Rs 50 to Rs 80 crore. Africa is next only to Latin America to be allocated substantially enhanced grants-in-aid in the Budget.

China's Africa Summit had seen all the 53 nations participate. India is limiting the invitations to just 14, sourcing them through the African Union (AU), a representative body for the entire continent.

"The selection of the countries has been done by the AU and not us," asserts Sharma, who had personally delivered the invitations from Prime Minister Manmohan Singh to the heads of states.

New Delhi and Beijing are locked in a race to capture businesses opportunities and expand their bilateral relationship with the oil-rich African nations.

Officials admit that Beijing has a definite edge over India with its commitments of projects worth $8 billion in hydrocarbon, minerals and trading in Africa, compared with India's some $2 billion investments, mostly by public sector companies like BHEL, RITES, VSNL, OVL and MMTC.

New Delhi's trade with Africa was estimated at around $20 billion in 2006-07, with exports growing by more than 180 per cent per annum. As against this, China-Africa trade touched $ 32.1 billion last year, registering a growth of 39 per cent.

Apart from its intrinsic interest in hydrocarbon and minerals, India's focus at the summit would be agriculture, infrastructure, urban transport, water and irrigation. New Delhi is also likely to offer "huge investments in the HRD sector by offering tie-ups between the Indian and African universities at the summit".

Sources in the external affairs ministry said New Delhi was likely to announce duty-free import of select items, including agricultural products, from some sub-Saharan countries.

An action plan, to be worked out at the three-day summit beginning April 19, would touch areas of trade, investment, education, agriculture, mining, infrastructure and education.

According to analysts, the difference between the Indian and Chinese presence in Africa lies in their approaches. India seeks to make long-term investments and is "ready to work in partnership with African society", while Chinese companies are seen as having a much more instrumentalist approach to investments. They also wind up at the slightest risk.

Algeria, Burkina Faso, Democratic Republic of Congo, Egypt, Ethiopia, Ghana, Libya, Nigeria, Senegal, South Africa, Uganda and Zambia are among the countries which would attend the summit.

The New Delhi summit is spread over four days ""interaction of senior officials from all countries on April 4 followed by a conference of foreign ministers on April 7 and then the summit of 17 heads of states. The PM will inaugurate the summit.

MEA officials said India just needed to give an extra nudge to its "historic relationship" with Africa and "any comparisons with China were unfair".

"Unlike the Chinese, who have just ventured into Africa for trade, Indian expatriates have been living across Africa," officials say. Also, each year India receives about 15,000 African students who come on scholarships.

"We are planning for a long haul and the Africans realise this. Some of the countries are even ready to ban the inferior Chinese goods that Beijing has been dumping there," officials said.