Playing catch up with China

Playing catch up with China

India has lots of ground to cover in the African continent with its own version of economic diplomacy and the New Year will mark another chapter in the India-Africa outreach programme.The Modi government has made much headway in its outreach to Africa but India still has lots of ground to cover before it can match Beijing's heft in that continent.India has consciously decided to approach African nations as a partner in their development, in sharp contrast to China, which has stolen a march over India in that continent, but has often been criticised as an exploitative neo-colonial power more interested in extracting Africa's natural resources for its own benefit than in improving conditions in the countries it has invested in.But India is light years behind China. Consider this: Bilateral trade between China and the 54 African nations was $220 billion in 2014. The comparable figure for India was $70 billion. China is Africa's largest trading partner. India is in fourth position behind the US and the EU.Many people are not aware of Africa's economic potential. Contrary to popular perception, it is not a poor, backward place ruled by a succession of dictators. The continent's GDP is larger than India's and its populations slightly smaller; over half the 54 African nations have higher per capita incomes than India, more than 30 African countries are democracies and the number of states with better human development indicators than India are in double digits. Then, like India, about 60 per cent of its population is younger than 35 years old, making it a likely recipient of the so-called demographic dividend.That's just the economic potential. There's a strategic angle as well. Africa has 54 votes in the United Nations and Prime Minister Narendra Modi is actively wooing these nations to back India's case for a permanent seat on the United Nations Security Council.The response so far has been positive. Though the quid pro quo is never mentioned in stark terms, Modi has assiduously wooed the African bloc by announcing a $10-billion line of concessional credit to Africa, $600 million of special assistance and 50,000 scholarships for African students at the Third India Africa Forum Summit held in New Delhi last October.India also has varied economic interests in that continent. Apart from oil and mining companies, the Tata Group, Godrej Group, Mahindra & Mahindra, Kirloskar and Bharti Airtel have a large presence there.Indian companies have invested upward of $25 billion in Africa and number is expected to rise significantly in the coming years. It is not uncommon to find Tata and Mahindra vehicles jostling for space with US, Japanese and European vehicles on African roads. Godrej is among the leading cosmetic brands in Africa, the Kirloskar Group has a large presence in the irrigation sector and Bharti Airtel is among the biggest telecoms players in that continent.Modi has wisely adopted an ideology-neutral approach in his outreach to Africa. The early indicators are positive and India has made much headway in that continent over the last two years. But it still has miles to go. Just one figure will suffice: India accounts for just 6 per cent of Africa's bilateral trade with the world compared to 17 per cent for China. Indian officials, however, are hoping to increase bilateral trade volumes to $100 billion within a few years.The next few years will be critical. Only then can it be judged if the Indian lion can compete with the dragon.

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