“India’s sustained effort made an impact in Africa … India’s share of new plant projects announced increased from 3.3% in 2003-2008 to 6.1% in 2009-15. Period, China’s investment fell 4.9% to 3.3%, “Finance Minister Arun Jaitley told the 52nd annual meeting of the African Development Bank (ADB) in Gandhinagar. Jaitley’s statement suggests that India has become an economically dominant partner in Africa compared to China. A detailed review of FDI and trade-related statistics are not consistent with this view.
According to the latest World Investment Report released by the United Nations Conference on Trade and Development (UNCTAD), China’s total FDI in Africa is much more than India’s. India and China were small players in terms of FDI in Africa and India was ahead of China until 2009. However, China has surpassed India between 2009 and 2014, the latest figure from which data is available.
Of course, global figures on Indian FDI in Africa could have a parasitic element for the role of Mauritius, which was a tourist destination to bring money as FDI in India. The database control center of India’s economy shows that India’s external FDI to Mauritius between 2008-09 and 2016-17 accounted for 17% of India’s total FDI. Maurice also accounted for 31% of the entries in India during this period. It would be interesting to see if this number declines after India has signed a double taxation agreement with Mauritius in May 2016.
Although India is not the biggest investor in Africa, this is not an insignificant player by any means. Statistics cited in the African Economic Outlook 2017 show that India is the second largest (after China) in terms of trade with Africa. Also in this case, there is a big difference in the real value of trade, total trade between China and Africa is more than 2.6 times its trade with India in 2015. It is interesting to note that India and China were almost equal in Terms of the total value of trade with Africa in 2000.
An earlier column Plainfacts which examined the business model in India and China with Africa revealed that the trade growth of the two major Asian economies was accompanied by the import of raw materials from Africa and finished products export in the continent. The column also argued that the fact that this model was also observed during the colonial period does not necessarily mean that the capital of India and China in Africa brought about colonial exploitation as before. The column also stated that if China’s FDI has been accused of having brought in a large amount of Chinese labor, which means that much of the profits are repatriated, the relatively small presence in India could have saved from a test More in detention.
With increasing economic participation, the fate of relations between India and Africa depends not only on quantitative factors, such as trade and investment, but also a strategy that convaincerait Africans who participate economically with India would be of mutual benefit.