BEWARE OF FAKE INSTITUTES WITH SIMILAR NAMES. blank    blank
banner

INDIA'S ECONOMIC INFLUENCE IN AFRICA VS CHINA



  May 20, 2024

INDIA'S ECONOMIC INFLUENCE IN AFRICA VS CHINA


What Is India's Current Economic Presence in Africa?

Trade and Investment

- Bilateral Trade: In FY23, India's bilateral trade with Africa reached almost $100 billion, whereas China's trade with the continent was nearly $282 billion.

- Foreign Direct Investment (FDI): In 2021, India was among the top 10 countries with the highest FDI flows to Africa, with $14 billion, while China ranked fifth with $44 billion.

Key Sectors

- Telecommunications: Indian telecom giant Airtel is a leading mobile service provider in Africa and has recently launched affordable 4G smartphones in Rwanda.

- Automobiles: Mahindra and Bajaj have a significant presence, with Mahindra Scorpios used by Nairobi's police force and Bajaj rolling out a compact quadricycle in South Africa.

How Is India Leveraging Its Strengths in Africa?

MSME Sector

- Filling Economic Gaps: Indian MSMEs are crucial for providing basic goods and services, bridging gaps that large-scale investments may overlook.

- Digital Public Goods: Initiatives like India Stack are being extended to African countries, offering open-source digital infrastructure.

Strategic Investments

- Triangular Projects: Collaborating with countries like the UK, France, and Germany to launch development projects in Africa, focusing on sectors such as agriculture and technology.

- Private Capital: Unlike China's state-led investments, India's investments are largely private, minimizing political strings and aligning more with African sensitivities.

Why Is India's Approach Effective?

Historical and Cultural Ties

- Long-Standing Presence: Indian entrepreneurs have deep-rooted knowledge of African markets dating back to pre-colonial times.

- Language Advantage: English proficiency in eastern and southern Africa aids in smoother interactions with government and business entities.

Pragmatic Cooperation

- Geopolitical Neutrality: India is seen as a trusted interlocutor in the geopolitical tussle between China and the West, maintaining good relations with both sides.

- Focus on Local Needs: India's investments focus on intermediate goods and services rather than advanced technology, aligning with Africa's current development priorities.

Future Prospects

- Growing Influence: Despite being behind China in trade volume, India's strategic use of its strengths and 'trump cards' like the MSME sector and triangular collaborations could significantly enhance its influence in Africa.

- Sustainable Development: India's emphasis on sustainable and viable development financing contrasts with China's controversial debt-trap diplomacy.




SRIRAM’s



Share:
 

Get a call back

Fill the below form to get free counselling for UPSC Civil Services exam preparation

 
UPSC DAILY CURRENT AFFAIRS

 
CHANDRAYAAN-3: A YEAR of ACHIEVEMENTS
 
VIZHINJAM: INDIA’S FIRST DEEP-WATER TRANSSHIPMENT PORT
 
‘AANKH MICHOLI’
 
CHINA FACTOR IN INDIA-RUSSIA RELATIONS
 
CVF and climate finance negotiations
 
CBI JURISDICTION AND STATE CONSENT
 
Beej Utsavs (Seed Festivals)
 
SILK ROUTE THROUGH KALIMPONG AND SIKKIM
 
RHODODENDRON NIVEUM, THE STATE TREE OF SIKKIM
 
OPERATION DHANUSH NEAR LOC
 
French Revolution and India
 
RBI’S MONETARY POLICY STANCE
 
French Revolution and India
 
MUSLIM WOMEN UNDER SECTION 125 OF CRPC:
 
BASTILLE DAY