India feels the heat of the dragon in Uganda

You cannot miss the signboards in mandarin at the entrance of Casino Kampala in downtown Kampala. Inside, Chinese groups can be seen trying their luck on the half-a-dozen tables and the innumerous gaming machines arranged in two rows.

"You will find them all over the place now," says an Indian head of a local insurance firm.

Indian businessmen in Uganda are waking up to a new threat: China. As the new age Great Game unfolds in natural resources-rich Africa, they have started to feel the heat of the dragon.

At the moment, Indians dominate business in Uganda. The Madhvanis are the largest group in the country, even ahead of The Aga Khan, with interests in sugar, manufacturing and hospitality.

Over three-quarters of the two-wheeler taxies (called bodabodas) use either TVS or Bajaj Auto motorcycles. The bulk of the medicine sold in the country comes from India. But all this could change in the near future.

Tata Uganda Director Shalendra Kundra says that till not so long ago, he used to supply 1,500 Tata vehicles to the Ugandan army.

Now, the army places all its orders with Chinese suppliers. While he is struggling to sell Tata's Safari multi-utility vehicles in the country, a Chinese company is planning to put up a car assembly plant. "They are opening up establishments where others don't go," says Kundra.

Naren Mehta, a local businessman and the chairman of The Indian Association of Uganda, says that about 12,000 Chinese have come to the country in the last few years. This is just 4,000 less than the Indian population in Uganda. In the Kampala business circles, the buzz is that Indians will be outnumbered by the Chinese within two years.

At the moment, the Chinese are involved largely in the construction business. But local Indians fear they could soon get into sectors like agri-business, manufacturing, hospitality and trading, which have been the traditional strength of Indians.

According to Mehta, the Chinese are trying hard to cozy up with the current administration and have donated two multi-storey buildings in Kampala and a spanking new stadium at the outskirts of the city. "It is clear who will get more work permits," he adds.

Not that the Indian government is not doing its bit. It has given a $350-million credit line for the upcoming 250 MW Ayago power project. But Indians at Kampala say it's not well-publicised and certainly not enough to counter the Chinese threat.

The community needs strong public relations support, they say, if it wants to grow its business in Uganda.

In April, there was strong agitation against the grant of Mbira forest land to a sugar mill owned by an Indian group and one Indian was killed. To make matters worse, the local media reported that this had endangered the lives of the thousands of Ugandans studying in India.

Since then, the Indian community has tried to make its social activities more visible. But here too, they lament, they do not get adequate support from the Indian mission at Kampala, which is manned by only two diplomats!

The World Malyalee Council has adopted two villages and plans to invest $230,000 there. In spite of frantic efforts, it couldn't get Prime Minister Manmohan Singh to inaugurate the event during his visit to the country.

Anand Sharma, the junior foreign minister in charge of Africa, sees no threat from China. "We haven't been here for four years. Our ties go back to civilisations," says he.

That may be true, but the stakes on Uganda are rising sharply. Oil and gas have been struck near Lake Albert. The deposits are mid-sized but give evidence of larger deposits waiting to be discovered. China and India are already involved in securing prospective oil and gas fields to secure their ever-increasing energy needs.

With very fertile land, abundant sunshine and rain, Uganda also holds the possibility of becoming the world's food bowl. Reliance Fresh, discloses Mehta, is tying up with local traders for sun-soaked dry fruit.

The key is, who gets there first.