Africa is slowly emerging as an engine of growth for the global economy. With a projected average growth of about 5.0% between 2013-25, it is second only to the emerging economies of Asia. The past decade, in fact, has only served to quicken Africa’s economic pulse. Its continuing rapid growth presents a very large opportunity for nations and companies to contribute to the development of this billion-people continent. As Africa accelerates its own process of internal reform and increases the pace of its global engagement reaching out to newer markets across the globe, India needs to keep pace in enhancing its economic engagement with the region. Today, India has the opportunity to propel this momentum further with a special value proposition to partner in Africa’s development based on our geographic proximity, cultural affinity, IT/engineering talent, entrepreneurship and low cost operating models. Building on these strengths, India should develop a new approach where Indian industry acts as a “solutions partner” to solve business and developmental challenges, and benefits from the business opportunities that this opens up.

1. India – Africa
Trade and Economic Relations – A Note
Confederation of Indian Industry

3. India – Africa Trade and Economic Relations – A Note
1
I. Introduction
Africa is slowly emerging as an engine of growth for the global economy. With a projected
average growth of about 5.0% between 2013-25, it is second only to the emerging economies
of Asia. The past decade, in fact, has only served to quicken Africa’s economic pulse. Its
continuing rapid growth presents a very large opportunity for nations and companies to
contribute to the development of this billion-people continent.
As Africa accelerates its own process of internal reform and increases the pace of its global
engagement reaching out to newer markets across the globe, India needs to keep pace in
enhancing its economic engagement with the region.
Today, India has the opportunity to propel this momentum further with a special value
proposition to partner in Africa’s development based on our geographic proximity, cultural
affinity, IT/engineering talent, entrepreneurship and low cost operating models. Building
on these strengths, India should develop a new approach where Indian industry acts as a
“solutions partner” to solve business and developmental challenges, and benefits from the
business opportunities that this opens up.
II. India’s BilateralTrade with Africa
India’s reliance on oil and gas from Africa has increased exponentially over the past few
decades, from less than a single percentage point to an anticipated 90% per cent by 2025.
As such, establishing solid trade and economic ties with Africa is of primary Indian economic
concern. Africa has historically run a trade surplus with India, most recently estimated at just
over USD6 billion in 2014-15.
India’s growing demand for energy to fuel its economic expansion spreads to other resources
in Africa, including metals and minerals (also gold), while Africa imports an array of consumer
goods and hi-tech requirements such as IT services, hardware and telecommunications
technology.
a) India’s Exports to Africa
Looking at India’s exports to Africa, the items are much more diversified than its imports.
Some of Africa’s largest imports from India account for just 2 per cent of its overall imports.
Nevertheless, mineral fuels (mostly non-crude petroleum oils) are still the single largest import
category (averaging 26 per cent of total imports from India during 2010-14).
On balance, Africa ran an average mineral fuels trade surplus with India of USD20.1 billion over
the last five years. Vehicles accounted for an average of some 10.3 per cent over the last five
years, with pharmaceutical products and machinery each accounting for an average of 8.4 per
cent and 5.6 per cent of total imports from India, respectively

4. India – Africa Trade and Economic Relations – A Note
2
India’s Exports to Africa by Region
S.
No.
Region 2013-14
(in USD
Million)
%Share of
India’sTotal
Exports
2014-15
(in USD
Million)
%Share of
India’sTotal
Exports
%Growth
1 Southern African
Customs Union
5,394.93 1.72 5,532.43 1.78 2.55
2 Other South
African Countries
2,328.65 0.74 3,214.03 1.04 38.02
3 West Africa 6,993.33 2.22 6,980.27 2.25 -0.19
4 Central Africa 1,092.19 0.34 1,251.26 0.40 14.56
5 East Africa 9,975.47 3.17 10,152.26 3.27 1.77
6 North Africa 5,441.63 1.73 5,711.68 1.84 4.96
Total Export to
Africa
31,226.20 9.93 32,841.93 10.58 5.17
India’s Total Export 314,405.30 310,338.48 -1.29
Source: Export – Import Databank, Department of Commerce, Ministry of Commerce and Industry, Govt. of India
b) India’s Imports from Africa
Africa’s exports to India have grown sharply over the last decade, with mineral fuels consistently
making up the majority of exports since 2006. Mineral fuel exports to India, which is mostly
made up of crude oil (89 per cent in 2014), have grown from a mere USD832 million in 2005 to
just over USD27.4 billion by 2014.The major African suppliers of crude oil to India last year were
Nigeria (58.9 per cent) and Angola (21.7 per cent), with Egypt also supplying another 5.8 per
cent of India’s total crude oil imports from Africa in 2014. In turn, South Africa has historically
been India’s second largest supplier of imports (averaging 19.5 per cent of India’s total imports
from 2010-14), with Africa’s southernmost country primarily exporting coal to India.
India’s Imports from Africa by Region
S.
No.
Region 2013-14
(in USD
Million)
%Share of
India’sTotal
Imports
2014-15 (in
USD Million)
%Share of
India’sTotal
Imports
%
Growth
1 Southern African
Customs Union
6,598.42 1.47 7,567.23 1.69 14.68
2 Other South
African Countries
6,540.91 1.45 5,259.43 1.17 -19.59
3 West Africa 17,236.80 3.83 20,034.56 4.47 16.23
4 Central Africa 108.2 0.02 265.82 0.06 145.69
5 East Africa 1,034.02 0.23 1,441.99 0.32 39.45
6 North Africa 5,108.57 1.13 4,065.83 0.91 -20.41
Total Imports
from Africa
36,626.92 8.14 38,634.86 8.62 5.48
India’sTotal
Import
450,199.79 448,033.41 -0.48
Source: Export – Import Databank, Department of Commerce, Ministry of Commerce and Industry, Govt. of India

5. India – Africa Trade and Economic Relations – A Note
3
III. Trends in India – Africa Investment
a) Indian Investment in Africa
Between January 2003 and August 2015 Indian companies invested a total USD 55.07 billion,
creating 100,584 jobs.
Indian Investment in Africa
Year Jobs created (Nos.) Capital investment (USD Mn.)
2015 4,884 539.1
2014 6,193 1,051.90
2013 4,938 5,175.60
2012 8,351 7,501.80
2011 29,859 11,859.20
2010 12,613 4,619.40
2009 5,745 2,824.30
2008 9,688 6,293.00
2007 1,138 1,494.30
2006 7,708 7,807.00
2005 3,386 1,068.70
2004 3,119 3,979.90
2003 2,962 859.2
Total 100,584 55,073.40
Source: fDi Intelligence from The Financial Times Ltd
Out of a total of 35 destination countries, the top five account for nearly 50% of the total
investment made in the region.
FDI trends by destination country
Destination country No of companies Jobs Created Total investment
South Africa 56 9,558 5,092.60
Nigeria 30 13,765 12,440.70
Kenya 33 7,460 2,573.70
Egypt 27 8,654 4,457.00
Tanzania 18 1,981 736.4
Ethiopia 17 15,102 1,815.00
Mauritius 17 1,975 484.7
Ghana 15 5,827 2,214.80
Zambia 13 5,039 1,480.50
Uganda 10 1,128 600
Other destination countries 85 30,095 23,178.00
Total 206 100,584 55,073.40
Source: fDi Intelligence from The Financial Times Ltd

6. India – Africa Trade and Economic Relations – A Note
4
b) Indian Companies Operating in Africa
Indian companies have established a strong presence in Africa. Many Indian companies today
are developing roads in countries like Ghana, Ethiopia, Nigeria, Gabon andTanzania.Two Indian
companies have been awarded contracts worth over 2 billion Br (over $100 million) to build
roads in Ethiopia. JMC Projects Indian Limited Company, which participated in Ethiopia’s road
construction for the first time, was awarded a 109 km project for 1.1 billion Birr. Another Indian
construction company, SWE Infrastructure Developers Plc, has also signed an agreement for
the construction of 66 km road project for close to a billion Birr.
Indian Railways has made forays into Africa, having supplied locomotives to Mozambique,
Tanzania, Mali and Senegal, and coaches to Angola. It has also rehabilitated sections of railway
in Mozambique and Liberia. Two currently operative LOCs ($27.7 million to Mali and Senegal
combined and $10.25 million to Benin) by the India Exim Bank are for the acquisition of railway
coaches and locomotives from India.
Hyderabad-based Ramky Infra is building Gabon Special Economic Zone, an industrial park, in
capital Libreville.
In the telecom sector Bharti Airtel operates in 17 countries across Africa. It operates a GSM
network in all countries, providing 2G or 3G depending upon the country of operation. In 2005,
Tata acquired a license to operate independently in South Africa. This led to the launch of
Neotel in 2006, the second network in the country. Neotel is now one of the leading providers
of communication services in South Africa. Tata Communication is also a leading investor in
three undersea cable systems that connect South Africa with Europe, Middle East and Asia
including India.
Uninterrupted power supply is another prerequisite for enhanced trade and investment
environment. India’s largest integrated power company Tata Power is offering technical
services to Benin Distribution Company of Nigeria, marking the company’s foray into the power
distribution sector in a foreign country. Companies such as Larsen &Toubro also have ventured
in to the power sector in Africa and are laying transmission lines. Thermax is manufacturing
boilers and other energy engineering equipment in countries like Kenya and Nigeria. Kalpataru
PowerTransmission Ltd (KPTL) has offered its expertise in power transmission business to the
entire African continent and has been making a positive contribution to the overall development
Telecom Sector: the case of Bharti Airtel
Telecom is another sunrise sector in Africa, with Bharti Airtel leading the Indian
charge. It acquired Africa’s mobile telecommunication company, Zain, in 2010 for
$10.7 billion (enterprise value). Since then its subscriber base has risen to 62 million
from 36 million. Bharti also offers high-speed data service in 11 countries and
mobile remittance service in 15 countries. Bharti has adopted a low-cost business
model in Africa with the help of its global partners: IBM, Ericsson, Nokia Siemens,
Tech Mahindra and Spanco. The low-cost model has helped the company expand
its presence in the rural areas there.

7. India – Africa Trade and Economic Relations – A Note
5
of all the countries in the region by way of delivering projects of international standards in the
shortest possible period at very competitive prices.
Tata Motors is present in some African countries with its entire range of commercial vehicles
which includes pick-up trucks, light trucks, medium and heavy trucks etc. Other major Indian
heavy vehicle makers who have strong presence in Africa are Ashok Leyland and Mahindra.
c) African Investments in India
Between January 2003 and August 2015 African companies invested a total of USD 1.39 billion
creating a total of 18,898 jobs.
African Investment in India
Year Jobs created Total Investment (USD Million)
2015 573 49.9
2014 2,800 107.4
2013 1,000 83.3
2012 918 216.7
2011 802 69.6
2010 668 33.9
2009 50 8.8
2008 2,502 345
2007 5,402 246.6
2006 2,468 83.6
2005 199 39.3
2004 1,373 26.5
2003 143 80.9
Total 18,898 1,391.50
Source: fDi Intelligence from The Financial Times Ltd
The top 10 companies account for 88.2% of job creation and 77.5% of capital investment.
These companies operate in sectors such as IT and Software, Textiles, Coal, Oil and Natural
Gas, Financial Services and Machinery among others.
The top countries that are investing in India include South Africa, Kenya, Mauritius, Tanzania
and Senegal.
Top 10 Companies: Jobs Created and Capital Investment
Company Name Jobs created Total Investment
(USD Million)
UST Global 10,338 395.5
Pavers Foresight Smart Ventures 1,448 274.9
Sahara Computers and Electronics (SCEL) 3,318 54
De Beers 368 93.6
FirstRand 288 103.6

8. India – Africa Trade and Economic Relations – A Note
6
Techno Brain 213 18.8
CKR Consulting Engineers 121 11.5
Mantis Collection 263 91.6
VP Group (Vegpro Group) 255 25.7
Mxit 50 8.8
Source: fDi Intelligence from The Financial Times Ltd
IV. Suggestions to Broaden and Deepen India – Africa Economic Relations
1. To boost Africa’s exports of goods and services to India
• To sustain the growth in India-Africa trade there is a need to broaden the trade basket,
especially for Africa’s exports. Greater value-addition to commodities within Africa is
necessary to enable African economies to benefit further from expanding trade with
India.
• Exports of value-added products require, inter alia, a positive business environment,
access to capital, skilled labour and sustained FDI that can be achieved through
mainstreaming of trade in national development strategies.
• In the short to medium-term, African countries should look to overcome the hurdles
faced by African firms in exporting to India. According to a survey conducted by CII and
WTO, it emerged that for African exporters’ access to Indian buyers, trade finance and
informal controls and shipment delays are some of the major concerns.The mitigation of
transaction costs will have a significant impact in enhancing the export competitiveness
of African products. The focus, therefore, should be on trade facilitation.
• India’s DFQF scheme – DFTPI scheme for LDCs, holds great potential in boosting African
exports to India. The DFTP-I came into full force in August 2012. After the amendment
of the DFTP scheme in April 2014, its coverage has increased to 34 countries and
over 98 per cent of India’s total tariff lines. As per this latest amendment, there are 97
products in Exclusion list and 114 products in MoP (Margin of Preference) list. In other
words, it means that, barring 211 tariff lines, India provides duty free market access to
LDCs in the Indian market on all remaining products.
• Diversification in African exports of services is also crucial for development of African
economies. Tourism, accounting for over 50% of African services exports, still holds
immense potential in exports to India by tapping into the growing tourism and business
travel sector in India. Bilateral co-operation and promotion of African tourism in India
would increase visibility and popularity of Africa as a travel destination.
2. To boost India’s exports of goods and services to Africa
• For Indian exporters transport and logistics costs, poor business environment along with
access to African buyers are cited as major difficulties.The annual India-Africa Conclave
is an important forum to bring buyers and sellers together. In addition, dedicated trade
meets connected with a particular country or sector will help address information
asymmetries as well as bring the growth markets of Africa closer to Indian producers.
• Due to high shipping costs, and cost of insurance in exports to African countries, many
Indian exporters prefer to sell free on-board basis instead of on-delivery basis. This is

9. India – Africa Trade and Economic Relations – A Note
7
generally not a good practise when exploring new markets and engaging with newer
or smaller buyers. Lowering transaction costs and risks are crucial to enhanced trade
between India and Africa. The export credit and trade finance institutions of India are
playing a major role in market access initiatives of Indian firms in Africa.
• EXIM Bank LOCs have historically galvanised India’s exports to Africa. However, there
are certain areas that mandate urgent attention, such as, delays in the release of
sanctioned LOC, monitoring of projects supported by LOC, greater transparency in
the selection of projects to be supported by LOC, and synchronisation of different LOC
projects that have received funding from multiple sources.
• Indian services exporters cite poor business environment and access to buyers as some
of the major impediments in exporting services to African countries. Many services
firms also find that getting work visas/ permits is particularly difficult in some African
countries. This should be addressed at the governmental level to facilitate services
trade.
• The Indian SME sector requires information on the growth prospects in Africa and how
their products can find a market there. While business associations can play a role, the
commercial wings of Indian embassies in Africa can, and are playing a facilitating role
by providing in-country research on market expansion opportunities available to Indian
exporters.
3. Investment-led trade towards greater economic cooperation
• India’s investment-led trade approach could help sustain the dynamic trade growth
between India and Africa, and help extend trade both in terms of the number of partners
involved and also the range of goods and services traded. Investments for joint ventures
between the countries would best open up the route for enhancing goods trade.
• Removing bottlenecks to Indian investments, including, protection of investments
through e.g. BITs, access to capital, improved business environment, is imperative to
ensure that Africa moves to a sustainable investment-led development model.
• Greater cooperation in agriculture and agro-processing would have a great bearing on
the food security situation in both Africa and India. Africa’s farm sector is expected
to grow to the tune of US$1 trillion by 2030, although this growth will largely depend
on adequate technology infusion. Indian companies could help Africa’s agriculture
sector in farm mechanisation, agro-processing and storage, investments in training
and development of human resources for the farm sector, Greenfield investments,
local vendor development, setting up of agro parks in Africa, setting up of horticulture
industries and floriculture units, among others. In boosting Africa’s agricultural value
addition, India too can meet its own food needs through imports, especially in pulses
where India faces a major shortfall.
• Lack of adequate investments is a key reason for the under-utilisation of Africa’s
hydropower potential and other renewable and non-renewable energy sources. India
has proven expertise in energy generation and can partner African countries build
their energy infrastructure through manpower, technical and financial investments and
engineering inputs.

10. India – Africa Trade and Economic Relations – A Note
8
• There should be strong engagement among India and African countries across diverse
services sectors. India has comparative advantage in many services sectors, including,
ICT, education, vocational skills development, health and financial services in which
Indian investments will serve the continent well.
• The Southern African region is an important non-oil trading region for India. To help
increase trade India and South African countries are looking to expand the India-SACU
PTA towards a comprehensive economic co-operation agreement incorporating services
and investments. The plans for a comprehensive economic cooperation partnership
agreement with Mauritius, and similar agreements with several other regional
communities in Africa should also be studied further. A joint study is also underway to
work out a free trade agreement with COMESA.
4. Strengthening India’s development assistance in Africa
• India intends to “intensify aid-for-trade assistance” in the coming years. In view of this,
greater institutional mechanisms and global co-operation would help ensure that India’s
assistance becomes more effective. India could benefit from the expertise of traditional
donors on project impact analysis and best practices to improve quality of delivery and
introduce mechanisms for better assessment of Indian project assistance.
• Trilateral co-operation with traditional DAC partners and emerging partners from the
South could also complement development assistance in Africa. Key gains can be made
in sharing professional skills in the design and delivery of Aid for Trade programmes as
well as project finance and technology transfer.
• The shortage of well-trained trade professionals is a problem for developing countries,
which lack the institutional capacity to train them. It should be a priority for India to
train trade professionals and to build institutional capacity in the African nations for
negotiations at bilateral and multilateral forums.
5. Collaborating withThird Country for Investing in Africa
• There is immense potential for countries like Japan and Singapore to better leverage
minerals, oil & gas and other resources from Africa. India has been struggling to compete
with China to an extent, due to the limitations of domestic funding.
• These countries face constraints of availability of human resources, lack of knowledge
of local conditions and scale of operations. There is potential for complementing Indian
engineering expertise and with funding and high end technology of these countries.
• This can be made possible the development funding agencies lend to EXIM Bank of
India, which in turn can do onward lending for African projects. Projects of priority can
be co-financed by Indian Line of Credit and third country funding.
• By this approach the projects of much larger value can be funded as compared to funding
entire cost of projects by India Line of Credit alone and risks of the borrower country
are shared by India and third country.There can be inward technology transfer to India in
cases where Indian infrastructure companies execute projects jointly with companies
from developed nations who may be co-financing a particular project.This will also help
Indian infrastructure companies pre-qualify for future projects which otherwise would
not be possible.

12. The Confederation of Indian Industry (CII) works to create and sustain an environment
conducive to the development of India, partnering industry, Government, and civil society,
through advisory and consultative processes.
CII is a non-government, not-for-profit, industry-led and industry-managed organization,
playing a proactive role in India's development process. Founded in 1895, India's premier
business association has over 8000 members, from the private as well as public sectors,
including SMEs and MNCs, and an indirect membership of over 200,000 enterprises from
around 240 national and regional sectoral industry bodies.
CII charts change by working closely with Government on policy issues, interfacing with
thought leaders, and enhancing efficiency, competitiveness and business opportunities for
industry through a range of specialized services and strategic global linkages. It also provides
a platform for consensus-building and networking on key issues.
Extending its agenda beyond business, CII assists industry to identify and execute corporate
citizenship programmes. Partnerships with civil society organizations carry forward corporate
initiatives for integrated and inclusive development across diverse domains including
affirmative action, healthcare, education, livelihood, diversity management, skill development,
empowerment of women, and water, to name a few.
In its 120th year of service to the nation, the CII theme of “Build India- Invest in
Development, A Shared Responsibility”, reiterates Industry’s role and responsibility as a
partner in national development. The focus is on four key enablers: Facilitating Growth and
Competitiveness, Promoting Infrastructure Investments, Developing Human Capital, and
Encouraging Social Development.
With 66 offices, including 9 Centres of Excellence, in India, and 8 overseas offices inAustralia,
Bahrain, China, Egypt, France, Singapore, UK, and USA, as well as institutional partnerships
with 312 counterpart organizations in 106 countries, CII serves as a reference point for Indian
industry and the international business community.
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