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India increases investment in Africa to catch up with China

india africa

by Joseph Earnest  July 15, 2013


Newscast Media DAR ES SALAAMIn a bid to expand its economic, political and strategic footprint in Africa, India is investing heavily in the resource-rich continent. But could India's path threaten Chinese interests in the region?

A few weeks ago, Indian tycoon Mukesh Ambani deepened his outlay in Nairobi's real estate sector with the acquisition of 10 prime plots valued at 2.9 billion shilling ($35 million) which are set be used for commercial and residential development. "It feeds the growing demand as more multinationals set foot in the continent," Prateek Berry, a realtor in Delhi told Deutsche Welle. Two years before, Ambani, who is also India's richest man, had also invested heavily in Tanzania's air transport and hospitality industries.

For many analysts, the move doesn't come as a surprise. According to the latest joint report by the Confederation of Indian Industry (CII) and the World Trade organization (WTO), India's current investments in Africa amount to more than $50 billion.

Africa's vast resources have long stirred up commercial interest. Besides oil and gas, the world's second largest continent has huge deposits of gold, silver, copper, iron, uranium and diamonds. Africa is becoming the new El Dorado with India's private conglomerates jostling for space in the hope of reaping big profits.

According to the CII-WTO report, overall trade between India and Africa grew at 32.4 percent between 2005 and 2011. Even more importantly, Indian private investment in Africa has surged, with major investments having taken place in the telecommunications, IT, energy and automobiles sectors.

The Tata Group, for instance, an India-based multinational conglomerate, unveiled earlier this year a $1.7 billion greenfield investment aimed at boosting automobile and hospitality businesses in the continent. Furthermore, Vedanta Resources, India's largest mining and non-ferrous metals company recently reported that it had invested $4 billion US dollars over the past nine years in Africa's mining sector.

In 2010, India's largest cellular service provider, Bharti Airtel, made a foray into the African telecommunications market by acquiring Zain Telecom's operations in 15 countries. The company recently unveiled plans to take over Warid Telecom Uganda, thus strengthening its footprint in the continent.

"We aim to lead Indian companies in raising bilateral trade to $100 billion by 2015. China is itself lobbying for its companies in that continent, so from Indian side, we want to lead the race," said R V Kanoria, a former president of the Federation of Indian Chambers of Commerce and Industry.

Analysts see Africa increasingly as a battleground between India and China for trade supremacy. In an effort to tackle the aggressive Chinese expansion in Africa, India pledged in March $5.7 billion in credits and grants for developmental projects and over a 100 capacity building institutions in Africa in March.   Add Comments>>

Source: Deutsche Welle








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