China's cosy trade with Africa worries India
Officials are worried that Beijing might steal New Delhi's thunder in wooing the African continent, reports KA Badarinath.india Updated: Nov 11, 2006 18:08 IST
The government seems to be exercised over enhanced trade and investment between China and African countries, with Commerce Ministry officials worried that Beijing might steal New Delhi's thunder in wooing the continent, which for decades has provided both markets and political allies for India.
Government sources said that the latest provocation seems to be 16 trade and investment deals worth $ 1.9 billion signed between China and African countries sealed last Sunday.
Chinese President Hu Jintao who led this investment and trade offensive has also announced cheap loans worth $ 5.0 billion to Africa while waiving past loans and doubling aid to the continent.
Hu’s announcement came at a summit of 48 African countries’ top trade and investment representatives earlier this week in Beijing.
“In over two decades, China has never made such an aggressive investment, aid and soft loan commitment to Africa. This will have a significant impact on India’s initiative to establish itself in the African markets” said a Commerce Ministry official, who did not wish to be identified.
Only last year, the Commerce and Industry Minister Kamal Nath launched a “Focus Africa Programme” with emphasis on Mauritius, Kenya and Ethiopia. Under the India Development Initiative (IDA) scheme, the Finance Ministry has been toying with the idea of providing suppliers’ credit against export of goods and services to the African continent below the London Inter-bank Offer Rate (LIBOR), the benchmark above which loans are normally given for commerical purposes.
“India needs a deeper pocket to establish itself in African continent in terms of cost effective credit, investment through state-owned companies and corporates reaching out with goods and services” said Dr TK Bhaumik, trade analyst and Chief Economist with Reliance Industries Ltd.
Analysts say China is partnering with Africa more for its energy resources and raw materials than its role as a market to sell Chinese goods. China is said to be eyeing oil, iron ore and copper from Africa to feed its expanding economy and manufacturing industries.
India recently opened a business centre in Durban during Prime Minister Manmohan Singh’s visit to the region. From this centre, most African countries may be serviced in terms of pushing for investment and trade proposals, government sources said. Further, the India-Brazil-South Africa (IBSA) forum has become an effective instrument for trade between the countries.
India's trade with African nations currently stands at more than $12 billion, of which South Africa alone accounts for about $4.6 billion. According to Commerce Ministry estimates, two-way trade with South Africa alone is set to cross $ 10 billion in three years.
First Published: Nov 11, 2006 18:08 IST