At the start of the recent G20 summit in New Delhi, prime minister Narendra Modi began proceedings with an announcement that reveals the importance the Indian government is placing on relationships with Africa. Declaring India’s G20 presidency “a symbol of inclusion,” Modi proclaimed that “with this sentiment of inclusiveness, Bharat [his preferred name for India] proposes that the African Union should be given permanent membership in the G20.”
Writing on X, formerly Twitter, shortly after the announcement, Modi argued that “the inclusion of the African Union in the G20 underscores its pivotal role in global progress.” He later added that the decision to make the organisation a permanent member of the G20 “is a significant stride towards a more inclusive global dialogue… collaborative efforts benefit not only our respective continents but also the entire world”.
India and Africa have enjoyed warm political relationships since the birth of India as an independent state in 1947. However, there are increasing signs that the government in New Delhi is now seeking to leverage these relations more proactively in order to advance a broad range of economic and geopolitical interests that are central to Modi’s mission to make India one of this century’s superpowers.
Brothers-in-arms
Shobhana Shankar, professor of African and global history at Stony Brook University in New York State, argues that both India and Africa have long perceived themselves as brothers-in-arms engaged in a mutual struggle against an unfair and often exploitative world order – an idea that has its roots in the age of Western colonialism, but that remains potent today.
“Even though African countries and India have had problems, and still do have problems, there is an ever-present relationship that stems from an emotional context of how they’ve always been connected, whether because of anti-colonial struggles, or the legacy of Mahatma Gandhi, who lived in South Africa for over 20 years and was a prominent voice against apartheid,” Shankar says.
“This narrative has helped create an ‘emotional infrastructure’ that smooths over material tensions that might arise over specific things,” she adds. The “emotional infrastructure” which Shankar identifies is certainly something that Modi is seeking to take advantage of in pursuit of his economic, political, and diplomatic goals. Prior to the G20 summit, the Indian prime minister explicitly cited the intertwined history between India and Africa and explained how he sees this as the basis of any future relationship.
“When we use the term ‘Global South’, it is not just a diplomatic term,” Modi said. “In our shared history, we have together opposed colonialism and apartheid. It was on the soil of Africa that Mahatma Gandhi used powerful methods of non-violence and peaceful resistance. It is on this strong foundation of history that we are shaping our modern relations.”
The challenge for politicians in New Delhi and African capitals is now to build on this history and determine what the future of India-Africa relations should look like. Harsh Pant, director of the Strategic Studies Programme at the Observer Research Foundation in New Delhi and professor at King’s College London, says “the main ambition at this point is to make the relationship between India and Africa more suited to 21st century realities.”
“Policymakers previously relied on the historical narrative as a starting point, but what happened over time is that generations and ambitions changed,” Pant tells African Business. While this narrative is still symbolically powerful if nothing else, Pant believes that “a dissonance emerged between what India expected from Africa and what Africa expected from India… we are now witnessing a rebalancing as Indian policymakers have realised that they have to engage Africa on today’s terms.”
The power of trade
Pant suggests that a central focus of this modernisation process in New Delhi is the economic potential offered by many African markets. Trade between India and sub-Saharan Africa has been steadily growing, rising from a total of $47bn in 2012 to almost $90bn last year. The African Union is now India’s fourth largest trading partner after the United States, China, and the United Arab Emirates. Energy is a crucial part of this picture: New Delhi is the single biggest purchaser of Nigerian crude oil, with Africa supplying around a quarter of India’s total crude imports.
While India continues to run a trade deficit with the continent, largely driven by the imports of oil and natural resources, the country has sought to diversify its exports to Africa in recent years. The continent is purchasing more products such as refined petroleum, pharmaceuticals, and chemicals. In 202-21, the trade volume in drugs and pharmaceuticals between India and African countries reached an all-time high of $3.8bn.
However, as the proliferation of trade in these sectors indicates, there appears to be a determination on both sides to expand the scope of trade between India and Africa. Abhishek Jain, India-Africa Corridor Lead at KPMG South Africa, says that “there is significant trade potential here which is underutilised.”
“There are many “traditional” areas where trade is strong – for example textiles, minerals, petrochemicals, agricultural products, and others,” Jain tells African Business. “That is good and will continue, but we should also encourage leaders in both India and Africa to think about the ‘New Age’ businesses and the other forms of trade that can be done.”
“India is home to innovative startups, a rapidly growing renewable energy industry, and leading space technology. It is one of the global leaders in digital payment technologies, with more daily payments being made in India than any market in the world. Africa should think about how it can engage with and benefit from these developments,” Jain argues.
Jain suggests that one particularly fruitful area for cooperation is likely to be in the field of renewable energy, which could be seen as a natural progression on the strong trade the two sides conduct in fossil fuels and natural resources.
The Indian government, which in 2021 declared its intention to reach net zero emissions by 2070, has ramped up its renewable energy infrastructure and now has the third-largest power generation capacity in the world.
Modi has sought to forge a leadership role in this sector, with India founding the multilateral International Solar Alliance (ISA) to drive the energy transition in member nations, with 44 African countries taking part. Partly because of the influence of ISA, India’s National Thermal Power Corporation (NTPC) has already secured contracts to develop solar parks in Mali and Togo, and is reportedly looking to invest in Sudan, Mozambique, Gambia, Malawi, and other African countries. In 2021, the Indian government pledged $2bn in concessional credit for solar energy projects in Africa.
Private sector enterprises appear to be following close behind. For example, ReNew Energy, one of India’s largest renewable power companies, is currently working on a feasibility study for an $8bn green hydrogen project in Egypt, while Ahmedabad-based Adani Green Energy is considering a 10 GW project in Morocco.
Opportunities for Africa
While optimistic about the potential growth of trade between India and Africa, Jain also points out that the continent could benefit from India’s economic rise in more subtle ways than direct investment. He believes that Africa could take advantage of shifting economic trends in India, which could open opportunities for the continent, particularly in areas of financial and digital services.
“Over the last two decades, India has matured best practices in providing offshore services, and is now moving up the value chain,” Jain says. He thinks that many African countries could fill the void by providing the offshore services to global companies that would once have been offered by Indian enterprises.
“In many parts of Africa, including South Africa for example, people speak very good English and French, have good education systems, great office infrastructure, good connectivity, and suitable time zone alignment with Europe. With the current exchange rates, South Africa and many African countries are also price competitive. There is an opportunity here for Africa to replace India in certain parts of the offshore supply chain, and learn best practices from India,” Jain believes.
Lingering issues
Although the trajectory of trade between India and Africa appears promising, there are some lingering issues that will need to be resolved to ensure this economic relationship can reach its full potential.
Perhaps most importantly, Indian companies have traditionally been conservative in their approach to foreign markets that are seen as high-risk. While the biggest companies may commit capital to emerging markets in Africa – especially when supported by the government as with renewable energy – Indian businesses as a collective are less prepared to do so.
Pant notes that “the Indian private sector is a bit risk-adverse – the private sector doesn’t really take the initiative and go into markets like Africa the way they should: there are some Indian companies in Africa, of course, but there are very few.”
That said, he believes there is an opportunity to change this mentality, partly because of greater awareness of the opportunities available in Africa and partly because India’s own horizons are increasingly expanding as its rise towards superpower status continues.
“Even medium scale companies in India are becoming more ambitious – they want to go global,” Pant tells African Business. “India itself is growing and, as it decides to expand, is looking for new markets. They should look at Africa as an opportunity because there is a lot of pent-up demand on the continent.”
Jain suggests several practical measures that the Indian government could initiate with African counterparts to encourage this “pent-up demand” to be released. He says that “governments can help facilitate trade much better by giving business a freer hand with faster processing, helping with labour mobility, improving regional and international connectivity, and reconsidering some investment protocols to help lower the trade barriers between the countries.”
There have been some moves in this direction – India’s Commerce and Industry Minister Piyush Goyal suggested in June that the country should seek to negotiate a free trade deal with Africa – but no formal discussions have taken place.
Modi’s push for global influence
For policymakers in New Delhi, India’s economic ambitions in Africa are closely associated with their wider geopolitical aims. Pant says that the Indian government has been keen to emphasise its desire to help Africa grow as an equal partner in a mutually beneficial way.
There are several motivations for this. One is New Delhi’s eagerness to help bring about stronger, more resilient African economies from which Indian companies can benefit.
Another is the wish to distinguish its foreign policy from those of other global powers such as China, as well as from Western-dominated global institutions such as the World Bank and International Monetary Fund (IMF), which have all been prone to accusations of exploitative behaviour from African countries, fairly or otherwise.
“India has a development partnership with Africa and is providing capacity-building – lots of science and technology professionals are being granted scholarships, for instance,” Pant tells African Business.
“India is trying to make the following argument to Africa: we want to be part of your developmental journey, but we do not want this to be a donor-recipient relationship. We want this to be a relationship between two partners and to build greater capacity and resilience across African countries,” he says.
But more fundamentally, India’s increased engagement with Africa is part of its frequently expressed goal to rebalance global political and economic power in favour of the countries which have emerged since the existing Bretton Woods system was established in 1945.
Barnaby Dye, lecturer in development politics at the University of York, says that India also believes that “its relationships in Africa are an important part of fulfilling their global governance goals”.
“This is particularly the case because Africa tends to vote as a bloc in organisations such as the UN Security Council or General Assembly, or in trade and climate negotiations. If you want to win an argument in these fora, you really want to try and court the African vote,” Dye says.
“India increasingly sees the value of being recognised as an important power by various African countries and is trying to build up friendly relations, through both diplomatic engagement and development cooperation,” he adds.
It is helpful for India, then, that many African countries also believe there is a need to reform international organisations such as the UN and IMF. At the BRICS summit of emerging economies in Johannesburg this year, two new African nations, Egypt and Ethiopia, joined a bloc that is widely seen as a hopeful challenger to the current order.
African countries, such as South Africa, have also been involved in efforts to reduce dependence on the US dollar and Western-dominated financial system. Dye tells African Business that Indian and African leaders believe “there is a shared strategic imperative for the countries of the Global South to work together to reform the international system.”
Relationship will grow in importance
The relationship between India and Africa is one that is deeply rooted in what both sides see as a shared history – but one that is also being updated for the challenges of a new era. From Africa’s perspective, it is highly likely that its relationship with what is already the world’s most populous nation and what will soon become the world’s third largest economy will continue to grow in importance – particularly during a period in which traditional geopolitical alliances on the continent are being shaken and reassessed.
While stronger ties between India and Africa could be financially lucrative for both, perhaps the drive for closer alignment between the two comes from their mutual, overarching geopolitical aims: to reform what they see as an unfair and outdated international order that diminishes the power of both Africa and the Indian subcontinent. Each recognises the other as being crucial to any successful attempt to achieve this goal.
Narendra Modi has often declared his ambition to make India the “voice of the Global South”. African leaders will be hoping that a new period of strong economic and political relations with the rising power of India will indeed give the continent a more powerful voice at the global level.
