India has two reasons to take an interest in Africa – it’s deeply concerned about China’s forays into the continent’s strategic and economic space, and it’s also mindful that it requires the support of its 54 nations if it is to realize its ambitions to become a permanent member of the U.N. Security Council. India is a latecomer in Africa, but as a demonstration of its pro-active engagement with the continent, the government this week announced that its trade target with the continent has now been revised upwards to $90 billion by 2015, up from the previous target of $70 billion. The announcement came on March 17, when the India-Africa Business Council met in New Delhi for the first time. The second meeting of India-Africa trade ministers took place the same day. The growing ties between India and African nations has seen bilateral trade soar over the past decade, and India has established a number of pan-African institutions under the umbrella of the India-Africa Forum Summit for capacity building and human resource development across many areas, including the India-Africa Institute of Foreign Trade, the India-Africa Diamond Institute, the India-Africa Institute of Educational Planning and Administration and the India-Africa Civil Aviation Academy. Yet another institution, the India-Africa Business Council, was launched on March 17, with a brief to put in place a vibrant mechanism for enhancing economic and commercial relations between the two sides, especially in areas including agriculture, agro-processing, manufacturing, pharmaceuticals, railways, energy and petroleum and natural gas. As of now, India is in no position to take on China in Africa. But the Indians are clearly making a concerted pitch to win friends and influence people there.
India in Africa
India plans to invest more in African gas and oil sector
Indian firms plan on expanding their presence in Africa.
India’s state-run companies are looking to acquire stakes in oil and gas blocks in Africa, form joint ventures in the continent and source natural gas to meet rising fuel demand at home, Indian Oil Minister S. Jaipal Reddy said Friday.
“Today as much as 21.5% of India’s crude oil imports are from Africa. In the years ahead, we seek more crude oil and liquefied natural gas from Africa,” Mr. Reddy said at a conference.
Africa is considered to have good hydrocarbon potential, with significant oil production coming from West Africa, and new promising gas discoveries in East Africa. Countries like China have already invested heavily in the region to develop its resources.
India, which faces a huge energy deficit and imports about 80% of its crude oil requirements, is scouting for hydrocarbon assets that can boost its energy security in the long term.
“Our companies are also interested in farm-in opportunities in producing blocks, especially in Libya, Algeria, Egypt and Nigeria,” Mr. Reddy said. He added that companies like GAIL (India) Ltd., Petronet LNG Ltd. and Indian Oil Corp. are interested in sourcing natural gas on a long-term basis from Africa.
He said the companies would “explore possibilities of equity participation” in natural gas export projects, gas processing businesses and gas-based petrochemical projects in Africa.
“There is no ceiling on imports from Africa. We are trying to maximise our [oil supply] sources in Africa,” Mr. Reddy said.
He didn’t specify which projects Indian oil companies were eyeing, how much they would invest and where the money would come from. He said that “with Africa’s economic development picking up momentum and its energy demands rising, India is keen to become a dependable supplier of petroleum products to Africa.”
Mr. Reddy also said that India’s crude oil imports from Iran remain on schedule and aren’t facing any bottlenecks.
Trade settlement between the two countries was hit after India’s central bank barred Iran-related payments from being processed through the Asian Clearing Union, a regional clearinghouse which the U.S. says is opaque and could be used by Tehran to finance its alleged nuclear-weapons program.
“The government of Iran is eager to help us in supplying oil in spite of many disturbing developments at the global level. Payment issues are being settled,” Mr. Reddy said.
Energy security is of top concern for India. Facing the critical challenge of meeting a rapidly increasing demand for energy, India is looking for more sources. Africa naturally comes to mine. Although India has significant reserves of coal, it is relatively poor in oil and gas resources. Its oil reserves amount to 5.9 billion barrels, (0.5% of global reserves) with total proven, probable, and possible reserves of close to 11 billion barrels. The majority of India’s oil reserves are located in fields offshore Bombay and onshore in Assam.
Due to stagnating domestic crude production, India imports approximately 70% of its oil, much of it from the Middle East. Its dependence is growing rapidly. The World Energy Outlook, published by the International Energy Agency (IEA), projects that India’s dependence on oil imports will grow to 91.6% by the year 2020.
Concerned about its growing reliance on oil from the Persian Gulf – 65% of its energy is imported from the region – India is following in the footsteps of other major oil importing economies, and seeking oil outside the Gulf. Indian firms’ investment in overseas oilfields is projected to reach $5 billion within a few years. Of particular interest is Africa
India and Africa sign major cooperation deals
ETHIOPIA, Addis Ababa : (From R) Indian Prime Minister Dr. Manmohan Singh (R), Equatorial Guinea President Teodoro Obiang Nguema, and Chairperson of the African Union Commision Jean Ping attend the opening ceremony of the Second Africa-India Forum Summit, attended by 15 African countries pn May 24, 2011 in Addis Ababa.The leaders will discuss significant aspects of the India-Africa partnership with the objective of enhancing and widening its ambit for mutual benefit.
India and a host of African countries have decided to deepen cooperation and trade-investment(s) among themselves.
Indian Prime Minister Manmohan Singh and around 10 African leaders opened Tuesday the second India-Africa summit aimed at consolidating trade ties between the two regions, which together account for a third of the world’s population.
India has stepped up its economic foray into Africa where its fellow Asian powerhouse China has made huge investments over the past decade.
“Africa possesses all the prerequisites to become a major growth pole of the world in the 21st century,” said Singh. “We will work with Africa to enable it realise this potential.”
In addition to the $5 billion credit line for the next three years, the Indian premier also announced an additional $700 million to build institutions and training programmes in different African regions.
India is also ramping up its political and security ties with Africa and pledged $2 million for the African Union Mission in Somalia tasked with protecting that country’s fragile transitional government.
Indian Prime Minister Manmohan Singh addresses delegates and partcipants at the Second Africa-India Forum Summit attended by 15 African countries in Addis Ababa on May 24. India will seek to expand its economic footprint in Africa, where rival China has made major inroads.
The two sides will Wednesday sign a cooperation framework to further bolster the economic relations that got a boost after the first India-Africa summit in 2008 in New Delhi.
They will also sign a political statement — the so-called Addis Ababa Declaration — calling for comprehensive reform of the United Nations system including an expanded UN Security Council in which the partners have pledged each other’s support for a permanent seat.
India in 2008 deployed its navy to be part of a foreign armada fighting piracy in the Indian Ocean and the Gulf of Aden.
Both India and China have turned to Africa to seek energy resources to power their fast-paced economies, but while China prefers government-to-government deals, Indian investment is mainly in the private sector.
This is expected by India given China’s increasing political-economic reach across the continent. India knows it just can’t compete with investment that China pours into Africa. How does India compete with China? Let the private players take lead and limit the government’s role to diplomacy and things like investments, scholarship/trainings etc. Soft power is what India should look for.
Indian drug firms use South Africa as entry way into rest of Africa
Indian drug firms have set up shop in South Africa as a launching stone into the rest of Africa.
A white South African woman runs the local operations of India’s largest drug company, Ranbaxy, and the second largest, Cipla, is listed on the Johannesburg Stock Exchange.
India’s pharmaceutical industry has rolled out a strong local presence in South Africa, cornering a large share of the market and using the country as a base to gush a flood of cheap generic drugs into Africa.
Unlike most multinational companies, India’s “big three” pharmaceuticals — Ranbaxy, Cipla and Dr Reddy’s — have carefully cultivated their local credentials by bringing South Africans into the top corporate echelons.
Ranbaxy and Cipla have also won fans by slashing the price of anti-AIDS drugs, saving countless lives in the country with the world’s largest HIV epidemic.
“They’ve been very strategic in terms of how they’ve positioned themselves in South Africa and using South Africa as a launch pad into Africa,” said Abdullah Verachia, an analyst at consulting firm Frontier Advisory who has followed the Indian companies’ ascent.
“That reflects one, their understanding of the market and two, their commitment to South Africa. You seldom get a foreign multinational company appointing a local CEO,” he told AFP.
India’s pharmaceutical industry has transformed itself over the past three decades from almost non-existent to the second-largest in the world by volume, with revenues of $3 billion (two billion euros).
Cheap generic drugs have been the catalysts of that growth, and Africa has been a key market, buying 14 percent of India’s $8-billion pharmaceutical exports in 2009.
The relationship was cemented in 2001 when Cipla announced it would supply anti-AIDS drugs to Africa at a massive discount, slashing the per-patient price of the “AIDS cocktail” from more than $10,000 a year to less than $400.
“Indian pharmaceutical companies have been absolutely critical in bringing down the cost of treatment,” Francois Venter, head of the South African HIV Clinicians Society, told AFP.
“If the cost of treatment hadn’t come down, there would be very many fewer people on the drugs.”
Sub-Saharan Africa, which has an estimated 22.5 million HIV positive people — 68 percent of all infections globally — is chronically short of funds to fight the disease.
Thanks to cheap Indian drugs, it has been able to increase the proportion of AIDS patients on treatment from two percent in 2003 to 37 percent in 2009.
But the Indian firms have gained more than just goodwill in the bargain. Providing discount generics has been big business and helped the Indian industry displace its Western rivals.
South Africa, which has 5.6 million people living with HIV, in 2008 launched a tender worth $526 million to provide its health department’s anti-AIDS drugs for two years, giving preference to companies with local operations.
South African firm Aspen Pharmacare took the lion’s share of the contract, but Ranbaxy’s local joint venture Sonke won 4.5 percent of the deal and Cipla Medpro, Cipla’s local subsidiary, won 1.9 percent.
Ranbaxy, today South Africa’s fifth-largest pharmaceutical company, last year opened a $30-million manufacturing facility west of Johannesburg — its second.
Cipla, the country’s sixth-largest pharmaceutical, has announced a $36-million upgrade to its plant in the eastern city of Durban.
Verachia said the thriving pharmaceutical partnerships are part of a larger vision of south-south cooperation that South Africa and India share.
“We share a very close diplomatic and political relationship in that both countries are advancing the interests of the south,” he said.
“That close and burgeoning political relationship has translated into quite a strong commercial relationship.”
Indian companies have began making a major push into Africa following China and not wanting to be left behind by fellow Asian rivals like South Korea and Japan. South Africa offers a good entry point since it is Africa’s largest economy, can be accessed by water and has one of Africa’s most dynamic economies. South Africa also gets foreign direct investment from some of the worlds best upcoming pharmaceuticals companies.
South Africa and India to conduct joint naval military exercises
India and South Africa have agreed to conduct joint naval exercises after meeting at the recent BRICS summit.
India and South Africa today decided to hold joint Naval exercises and fixed a new trade target of $15 billion to be achieved by next year as Prime Minister Manmohan Singh and President Jacob Zuma met here and discussed ways to boost overall ties.
Exchange of VBSS best pracices - South African Sailors onboard IN Ship
During the 45-minute meeting on the sidelines of the BRICS Summit, Zuma also informed Singh about his government’s intention to invite President Pratibha Patil and Congress chief Sonia Gandhi to his country.
The two leaders discussed a number of issues including bilateral defence and economic ties, UN reforms and developments in Libya and Ivory Coast, Secretary (Economic Relations) in the external affairs ministry Manbir Singh told reporters here.
Talking about the defence ties, the two leaders felt that these could be further strengthened, Manbir Singh said.
In this context, it was decided that the two countries would hold Naval exercises, the second such joint manoeuvres.
The Indian Ocean is becoming a more important priority given China’s fast naval military buildup and presence in Africa. This is one way India can stay active in the region and buildup partnerships on the continent, especially with coastal states such as South Africa.
Here is a report about the South African navy’s visit to India back in 2008.
Indian Navy sending 3 ships to evacuate Indians from Libya
INS Jalashwa
India is sending naval vessels to evacuate it’s citizens.
India is sending three Naval ships to evacuate its citizens from Libya. 18,000 Indians are currently based in Libya, many of them work for construction companies.
Government sources say two destroyers and INS Jalashawa (USS Trenton) will be dispatched from Mumbai in the next few hours. They will take 12 days to reach Libya.
In the meantime, the government has hired a private cruise ship that was already in the region. It can accommodate 1200 passengers and is sailing now from Egypt to Benghazi, the centre of the revolt in Libya. Government and medical officials will be on board the ship to provide assistance.
After leaving Benghazi, the cruise ship, named the Scotia Prince, is expected to dock in Alexandria in Egypt by March 1. From there, the passengers will be flown to India on special Air India flights.
The Naval ships will be used to move Indians from Tripoli to Alexandria. 8500 people are to be evacuated by the navy from Tripoli, another 1500 from Benghazi.
Punj Lloyd, DS Constructions and Simplex Projects Limited are among the larger employers of Indians in Libya.
While smaller companies are keen to remove their workers, larger companies have told government officials that they’d like to wait for a week to see how the massive protests unfold. So far, Col Muammar Gaddafi has retaliated against demonstrators demanding his exit with unrestrained force.
India Implementing Strategy To Compete With China And European Countries In Emerging African Markets
Indian industry is implementing a strategy to compete with China and European countries for capturing markets in growing African economies.
As part of the game plan, Commerce and Industry Minister Anand Sharma will be leaving for Nairobi tonight, leading a business delegation of the Federation of Indian Chambers of Commerce and Industry.
Senior officials from 187 Indian companies would be participating in the ‘Namaskar Africa’ and ‘India-East Africa Business Forum’ events at Nairobi, opening on October 14.
FICCI President and Bharti Enterprises Vice Chairman Rajan Bharati Mittal, with a strong interest in the telecom business in Africa, is the leading member of the delegation.
Sharma will be addressing a meeting of the India-Kenya Joint Trade Committee, according to a Commerce Ministry statement here.
He is also scheduled to meet Kenyan President Mwai Kibaki and Prime Minister Raila Odinga.
While India has bilateral trade of USD 30 billion (2009- 10) with Africa, business with East African nations, mainly Kenya, Rwanda, Seychelles, Ethiopia and Uganda, amounts to just USD 4 billion.
According to a FICCI study, “India has many commercial rivals in the region, particularly European countries like UK and China… The Chinese companies, which are government- owned, have far more capital for investment than the Indian private owned companies.”
The European countries may exercise pressure on the African nations to counter China and India, it said, adding, “This is harmful to India’s commercial and political relations with East African countries.”
India, on its part, is trying to counter the commercial threat from China and European nations by offering lines of credit to African firms. “That will help source capital goods from India,” FICCI Secretary General Amit Mitra said.
With a decade of growth at the rate of 5.4 per cent, the economic outlook for Africa is improving.
“For the first time in over three decades, a large number of African countries have begun to show sustained economic growth at the rates that are similar to the rest of the developing world and exceed that of most of the developed countries,” FICCI said.
Healthcare and pharmaceuticals, power, construction, information technology, roads and railways and minerals are the areas of opportunity for Indian companies, the study said.
This is to my knowledge the first explicit action plan by the Indian government about it’s strategy in Africa. India is asserting its interests vis-a-vis China in Africa especially since it has been playing catch up to Beijing. India’s challenge for global influence is prestige is indeed formidable as it has not yet achieved the economic and political profile that China enjoys regionally in Africa and globally. Yet at the same time, India lacks the contacts, knowledge of the complexities of various groups and segments of African society like European, American firms. But it gets increasingly bracketed with China as a rising power, emerging power or even a global superpower based off its current economic growth rates, which haven’t yet reached their apex. The difference between a goal and a dream is a plan. It’s about time that India laid out its plans how to approach Africa.
India Seeking To Buy Manganese Ore Mining Assets
With its continuation in finding new energy sources India is looking to buy manganese ore mining assets in South Africa.
Indian steel ministry is in talks with the South African government for buying manganese ore mining assets for state-runManganese Ore India Ltd MOIL.BO, a government official said on Wednesday. “We are talking to the government of South Africa. We have requested them to allot us certain mines, we are looking at it aggressively,” Dalip Singh, joint secretary in the ministry of steel, said.
More investment in South Africa should be welcomed. The opportunity and economic development does benefit both sides.
India Goes Seeking Coal in Mozambique
India, like China needs vast sources of energy to continue it’s economic growth. Naturally India is seeking energy resources aroundthe world, especially in the Middle East and Africa. From seeking oil cooperation in Angola, India is on the look out for new sources to continue driving its economic engine, and Mozambique might help.
State-run Coal India Limited (CIL) plans to export 10 million tons
of coal from Mozambique toIndia in the next 10 years from its two mining concession blocks in the southern African country, a top official said on Sunday.
CIL’s director for central mine planning Marinder Khurana also said his company would ask Mozambique for five more licence blocks in a strategic bid to meet India’s fast-growing domestic demand for energy.
“We have two blocks now and we will ask for five mnore blocks,” Khurana told Reuters on arrival in Maputo as part of an Indian delegaton that included Coal Minister Sriprakash Jaiswal.
“We are looking at an output of 10 million tones of coal when operations ramp up in five years and Coal India Ltd intends to invest $400 million in the two coal blocks if exploration comes right,” Khurana said.
Coal India will employ 3,000 people in Mozambique on its two blocks and will also help build infrastructure such as a railway, Khurana said.
The Indian delegation is exploring coal mining opportunities in South Africa, Zimbabwe and Mozambique, a major destination for coal-hungry companies world-wide, Jaiswal said.
“Mozambique, South Africa, Australia, Canada and the USA are our target priority right now to acquire more coal assets,” Jaiswal said.
“We want more Indian companies to invest here because we have a serious shortfall in terms of supply.”
Expect more investments by India all over Africa as it seeks resources at the same if not at a faster pace than China.
India eyes Angola’s oil
India is interested in getting oil from Angola.
India is keen to source more crude oil from Angola on firm basis, and has also expressed interest in acquiring oil and gas assets in that country.
The Petroleum Secretary, Mr S. Sundareshan, told reporters here at the Petrotech 2010 that these were some of the issues taken up with the Angolan Oil Minister, Mr Jose Maria Botelho de Vasconcelos, at the Ministerial level bilateral meeting.
Currently, India imports around 9 million tonnes a year of crude oil from Angola.
Looks to source LNG too
Besides, India is looking at sourcing liquefied natural gas (LNG) from Angola, which is setting up a 5.2 million tonne a year LNG facility.
Angola's Oil Minister Jose Botelho de Vasconcelos
Asked whether the Indian side would be given special treatment in acquiring oil and gas blocks, Mr
Sundareshan said, “We have sought special considerations. They have said they will look into it. But, we
will participate in any transparent process.”
Also, Indian public sector refineries are exploring the possibility of participating in refinery projects in Angola. The Secretary said recently a team of Indian companies – Indian Oil Corporation, Engineers India, and Bharat Petroleum Corporation – had gone to Angola to study prospects.
This development comes with China’s as Angola’s largest oil buyer and will certainly raise some eyebrows in Beijing, especially given the Indian and Chinese rivalry.
China has good relations with Angola as of now, so expect Beijing to outbid New Delhi on future and upcoming oil, gas projects, just like they have down across all of Africa. India has to be proactive on the continent and not act complacent like in the past.
Stratsis Incite 