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?.
Some of the leading companies focusing on mines and minerals like gold, silver, metals, coal, and hydrocarbons are Tata Steel, ONGC, MMTC, Diamond Polishing from Surat, Taurian. The companies from the gems and jewellery sector feel that the twin combination of improving buying capacities and affinity towards gold and silver jewellery amongst people from the Africa region has improved prospects for jewellery exports from India. One of the major projects of Tata steel is a stake in the coal mines in Mozambique, through an MoU signed with Riversdale. Riversdale is an Australian company which has coal mines in Mozambique in South Africa. Under the terms of the agreement, Tata Steel will invest $88.2 million to acquire 35% of Riversdale?s Benga and Tete licences.
Giants like Ranbaxy and Cipla have invested in the healthcare and pharmacy sector in Uganda, Nigeria, Namibia, and Zambia. SK Seth, group general manager, RITES Limited told FE, ?We are looking for business opportunities everywhere in the world but Africa is special as RITES has been involved in several African countries in the last 30 years and has good experience and knowledge of working in these countries. We have the appropriate technology and working systems, which suit African conditions well. In terms of benefits, we have exposure to growing markets for export of railway equipment and opportunities to render consultancy services and get involved in public private partnership projects that are expected to further enhance the business potential in the areas in which we are?.
In the IT and telecom sector, big names like Satyam, HCL, Wipro, Tata Consultancy Services (TCS) are in the line along with Shyam Telecom, Duraline India.
