India Inc hunts bright prospects in Dark Continent

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New Delhi, Aug 11 : After the US, UK and China, it is now Africa that is catching the eye of Indian companies for investments of various kinds. The International Monetary Fund (IMF) has projected an average growth rate of about 7% for the African region in the year 2008, in comparison to the growth rates of 5.9% and 5.8% in the years of 2006 and 2007.

Giants like Escorts, Mahindra and Dabur are targeting the agriculture sector in African countries like Kenya, Mozambique, Ethiopia, Ghana and Namibia as it has a huge potential in terms of farm mechanisation. As per a RBI report, the total investment of Indian companies till March 2007 in Africa, is $4.27 billion. The trade figures for India and Africa show that the bilateral trade, which stood at $6.5 billion in the year 2002-03, increased to $25 billion in 2006-07— a commendable increase of about 285% in just four years. This increase in trade is seen as a result of a rise in both exports from India to Africa and imports fromAfrica into India. Trade with Africa accounted for 5.8% of India’s global trade in 2002-03 and this figure jumped to 8% in 2006-07.

In addition to the bilateral trade, there has also been a rise in investments from India into African regions. Rajiv Kumar, head, exports, Agri Machinery group, Escorts Ltd told FE, “Tractors are the backbone of farm mechanisation process and therefore to increase the productivity from agriculture, land tractors will be required. Lot of land in Africa is virgin and no farming is happening currently or if it’s happening, it’s done by the old methods that are less productive and where yields are lower. Currently we have our tractors in Angola, Sudan, Nigeria, DRC, Libya, Tanzania, Kenya, Ghana, Burkina faso, Togo, Senegal, Zambia, South Africa and Zimbawe”.