India is likely to soon start talks for a trade and investment agreement with African nations to further bolster bilateral commerce, an official source told FE.
The move comes at a time when New Delhi looks to further strengthen its trade with relatively small and medium-sized economies, as key markets like the US and the EU are staring at a huge growth slowdown. African nations, too, will benefit hugely from this engagement, as India’s trade and investments in the continent are not designed to lead the countries into “debt trap”, said the official source, in a veiled reference to China, which has often been accused of resorting to unfair trade and investment practices.
While India exported goods worth $40 billion to Africa in FY22, its imports were higher at $49 billion, partly due to oil purchases from countries like Nigeria. According to an Exim Bank study, there is a potential to further boost trade by $48 billion per annum in the medium term.
Addressing a special session at the 17th CII-Exim Bank conclave on India-Africa Growth Partnership late Tuesday, commerce and industry minister Piyush Goyal reiterated the intent to forge a trade pact with Africa. This is because the economic outlook, in the long run, “is going to be promising for both India and Africa, because this is where the markets and opportunities are present”, Goyal said. Solar energy, infrastructure, military cooperation and the start-up ecosystem are four critical areas where India can be a valuable partner to African nations, he said. India’s digital initiatives like UPI, ONDC can also benefit Africa immensely, he added.
As such, the India-Africa partnership goes a long way. Speaking at the conclave, external affairs minister S Jaishankar said India has extended concessional loans of $12.3 billion and $700 million in grants to Africa. Similarly, New Delhi has completed 197 development projects in Africa so far, 65 more are under execution and 81 are at a pre-execution stage, Jaishankar said.
As many 40 ministers from 17 African countries, including Nigeria, Ethiopia, Ghana, Mauritius, Sudan and Namibia, are attending the two-day conclave.