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International | India and Africa

When trade winds smell sweet


Posted: Wednesday, Apr 16, 2008 at 2345 hrs IST
Updated: Wednesday, Apr 16, 2008 at 2345 hrs IST


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: China’s, the Indians are no less anxious than the Chinese to impress the Africans with their hospitality and charm. Although Indians hate direct comparisons, China hosted an even bigger gathering for African leaders in 2006.

India is no more squeamish than China about dallying with dictators. It happily does deals with the tyrants of Sudan; one recent contract was for a $200m pipeline linking Khartoum to Port Sudan. Like China, India has refrained from criticising misrule in Zimbabwe. But India also does good in Africa: it has helped out many UN missions there, with some 9,000 blue helmets now in the field. Over the past five years it has offered lines of concessionary credit to Africa worth $2.5 billion. Now it is talking about a $10 billion investment fund for the continent.

So far India has escaped the abuse heaped on the Chinese for their dealings in the worst-governed bits of Africa. The main reason is that, hitherto, India’s transactions have been on a more modest scale. But the free pass may not be valid for long. The human-rights advocates who berate China for complicity in the plight of Sudan’s Darfur region are already beginning to turn their attention to India.

In the field of commerce a different set of factors comes into play. When Indian firms have competed in Africa with China’s much bigger corporations, they have often lost out. In 2004 India’s oil and gas corporation, ONGC, bid $310m for an Angolan oil block; its Chinese rival offered $725m. To hold its own in Nigeria—which accounts for 20% of India’s crude-oil imports—ONGC formed an alliance with a Dutch-based compatriot, Mittal Energy.

Yet Indian firms in Africa also have advantages, such as the continent’s ethnic Indians, who form a useful bridge. Take east Africa’s best-known industrialist, Manu Chandaria, who was born in Kenya nearly 80 years ago to Gujarati parents. “Indians have been dealing with Africa for centuries, and we are here to stay,” says the entrepreneur, whose manufacturing empire ranges from aluminium to software to steel to household utensils. With his easy access to the elites of Africa, India and the other parts of the English-speaking world, Mr Chandaria does not, as yet, have any obvious Chinese equivalent.

The existence of a diaspora also reassures investors in India. “Where we find Indians living, we feel at home,” says Sanjay Kirloskar, chairman of the Kirloskar Group, an Indian firm that is building pumping...

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