19TH

BUSINESS CONCLAVE 20 – 22 August 2024

Creating ONE Future New Delhi, India

Pathways for
Shared Progress:
India-Africa
Economic
Cooperation

AUGUST 2024
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Contents
Executive Summary 04

Introduction 07

African and Regional African Economies 09

India’s Initiatives with Africa 15

India-Africa Trade 20

African Continental Free Trade Area 27

Top 15 African economies 30

Sectors of Cooperation 49
Agriculture and Food Security 50
Digital Public Infrastructure 52
Manufacturing 54
Skill Development 57
Healthcare and Pharmaceuticals 59
Green Economy 61
Critical Minerals 63
Power and Energy 64
Infrastructure Development 66
Defence and Space 68

Recommendations 70
Conclusion 76
Annex: Indian Economy: Rising Growth Trajectory 78
Executive
Summary

Africa has been one of the world’s fastest-growing regions over the
past decade, and by 2030 will be home to nearly 1.7 billion people and
an estimated USD 6.7 trillion worth of consumer and business
spending.

This demographic growth translates into an expanding consumer base

and a growing young workforce, presenting vast market opportunities
for goods and services. The African continent has the potential to
participate in the global economy much more than it currently does.

The Government of India and African Governments have developed a

close partnership extending to trade, investment, developmental
projects, infrastructure projects, food security and agriculture, education
and healthcare and so on. Prime Minister of India Shri Narendra Modi
has enunciated 10 principles for engaging with Africa with economic
India-Africa trade stands at cooperation as a key pillar. The economic principles include sustained
and deepening Indian engagement with Africa, creating local
USD 83 billion capabilities and opportunities, greater market access to Africa and
with Indian exports to Africa at
greater investments in Africa, use of digital tools to support Africa’s
USD 45 billion development, enhancing agricultural productivity and addressing
and imports at climate change challenges.
USD 38 billion.

04
 Pathways for Shared Progress: India-Africa Economic Cooperation

Given Africa’s resurgence, Indian industry must Additionally, Africa's vast natural resources and young
engage closely with the continent across multiple demographic offer Indian companies the chance to
domains. The rapid evolution of Africa's economy is invest and create new markets.
being accelerated by various global shifts, leading to
substantial gains for the continent due to its The paper outlines Africa’s growth and external
previously low economic base. economic relations, while focusing on 15 large
economies of the Continent.
India-Africa trade stands at USD 83 billion with Indian
exports to Africa at USD 45 billion and imports at The report provides an overview of identified sectors
USD 38 billion. The trade basket mainly includes of cooperation as below:
mineral fuels, food products, pharmaceuticals, and so • Agriculture and food security
on from the Indian side and crude oil, diamonds,
• Digital Public Infrastructure
copper, etc from the African side to India. The
presence of a large number of other traded items • Manufacturing including automobiles, chemicals, etc
from both sides indicates a high potential for further • Skill development
sourcing from Africa.
• Healthcare and pharmaceuticals
The African Continental Free Trade Area (AfCFTA) • Green economy
has broadened the scope for India-Africa trade.
• Mining and critical minerals
Indian industry can leverage connectivity and lower
tariff barriers for setting up investments and creating • Power and energy
regional value chains that can be a part of global • Infrastructure development
value chains.
• Defence and space
India and Africa have identified key sectors to enhance
The report highlights key recommendations to
bilateral trade and jointly address shared challenges.
strengthen the India-Africa economic partnership.
In the food and agriculture sector, both regions
prioritize food security and the advancement of
i. Country strategies
agricultural technology and trade. Energy security is
With the vast diversity in economies, industrial
strengthened through collaborations in the oil and gas
strengths and resources in Africa, India needs to take
sector, including Indian investments in African oil fields.
a differentiated strategy towards African countries,
Indian investments in mining and minerals also could
depending on 3 factors viz, level of development, size
contribute significantly to creating value in Africa.
of consumer market and resource profile.

Encouraging manufacturing in Africa for export aims

to enhance job creation and economic diversification.
India’s pharmaceutical industry has built an extensive
presence in Africa for affordable generic medicines
and healthcare infrastructure. Indian manufacturers
have established assembly plants in Africa to benefit
the automobile and transportation sector as well as
electrical equipment and machinery. Sustainability
and green energy solutions support environmental
goals by promoting renewable energy adoption and
advancements in clean technologies.

Africa presents a significant market for Indian goods

and services, with a growing consumer base and
opportunities for investment in sectors such as
manufacturing, infrastructure, and agriculture.

05
ii. Aid to FDI 12 other countries were granted approvals for opening
As African countries are reluctant to borrow more SRVAs. Expanding this to more countries will be
and suffer debt stress, the preferable model for beneficial for traders and the diaspora.
financing should move from LOC-led model to an FDI
led model including PPP projects to achieve SDGs vi. Focus on services
and infrastructure development in Africa. It is essential to enhance advocacy and awareness in
both public and private sectors, and to mobilise policy
iii. Trilateral partnerships attention and resources to boost the sector’s
India has undertaken various developmental projects competitiveness. A services-driven regional
in Africa in partnership with advanced countries.
development strategy, integrated into a
comprehensive policy framework, is crucial for linking
Trilateral partnerships can be formed for a range of
sectors such as agriculture, industrial development, services to broader national development goals.
skill development, women’s empowerment, and trade.
The key is to build a huge scale for these vii. Role of Indian and African Missions
partnerships so that they can be effective at large. Indian and African missions and posts are doing
excellent work in deepening and strengthening the
These should also bring in industry, academia and partnership. Embassies can work on enhancing
civil society organisations to partner in Africa. private sector engagement, skill development projects
and sustainability projects. CII can help in this regard
iv. Access to finance through its centres of excellence.
Access to finance is cited as a key constraint for
industry wishing to expand horizons in Africa. To viii. Other Recommendations
address this, India needs to open more bank
branches in Africa. It must also provide long term risk • Establishing a Free Trade Agreement (FTA) or a
insurance cover denominated in the currency of the Preferential Trade Agreement will facilitate trade,
contract (USD). investment, and economic cooperation.

v. India Africa Rupee Trade • Lower transaction costs, including high shipping
In July 2022, the Reserve Bank of India (RBI) and insurance costs, to facilitate trade.
authorised Indian banks to open and maintain Special
Rupee Vostro Accounts (SRVAs) for partner trading • Improve the dissemination of market information
countries' banks. Thereafter, banks of 6 African and and knowledge about each other’s markets.

06
Introduction

The India-Africa relationship enjoys a shared history of ancient trade

routes and cultural exchanges that pre-date the era of globalisation.
Owing to their vibrant cultural connection, and potential for mutually
beneficial cooperation, India-Africa ties have significantly strengthened
in recent years. The inclusion of the African Union as a permanent
member of the G20 during the G20 Summit India 2023 marked a
milestone for the Continent in joining the global discussion platform
and fostering new, stronger partnerships with the world as well as India
in particular.
Bilateral trade has
grown from Today, the bilateral economic bonds have emerged as a testament to
USD 68.5 billion mutual respect and shared aspirations for development. To foster a
in 2011-12 to new era in economic ties, building on the vibrant growth in both
USD 83.34 billion economies, it is crucial to explore new avenues in trade, investment,
in 2023-24, making India and economic cooperation. The shared commitment towards
Africa’s third-largest trading sustainable development and economic growth drives both sides to
partner. seek innovative partnerships and emerging opportunities.

07
India and Africa have held three India-Africa Forum Today, with India ensuring diverse energy supply
Summits with the last one taking place in 2015. The sources, Africa’s role in India’s energy security has
deepening of the bilateral relationship is visible in the become important. African countries such as Nigeria,
increase in Indian diplomatic missions in Africa and Angola, Algeria, and Equatorial Guinea account for a
the numerous visits by Hon’ble President of India and growing share of India’s oil imports.
Prime Minister Shri Narendra Modi over the years.
The African Continental Free Trade Area (AfCFTA)
Trade between India and Africa has grown from USD has expanded India-Africa trade, ensuring economic
68.5 billion in 2011-12 to USD 83.34 billion in progress, reducing poverty, and increasing
2023-24, making India Africa’s third-largest trading employment opportunities.
partner after the European Union and China.
India and Africa have prioritised key sectors to boost
India is also the second-largest lender in Africa. Most bilateral trade and address common challenges.
fiscal aid is channelled through the African Over the next 25 years, India and Africa, with their
Development Bank (AfDB). India’s cumulative increasing incomes and population trends, could
investments in Africa amount to USD 75 billion, which become significant digital and green markets. One
the Indian industry and government aim to increase key area of collaboration involves India’s Digital
to USD 150 billion by 2030.1,2 Public Infrastructure (DPI) including the India Stack,
which can be replicated with an aim to improve
Over the years, India-Africa trade has undergone governance, transparency, and inclusion across
significant transformations. From 2000 to 2010, with Africa.
expansion in trade, the regions saw an increase in
trade volumes and the inclusion of sectors like oil and This report aims to cultivate a deeper understanding
gas, machinery, and automobiles. Geographically, of India-Africa relations and highlights innovative
India expanded its trade relationships beyond approaches for collaboration across various sectors.
traditional partners to various African countries, It seeks to facilitate knowledge exchange, promote
accompanied by a diversified trade basket. During economic cooperation, and build lasting partnerships
this period, technology transfer and knowledge between Indian and African governments,
sharing also evolved. businesses, and civil society.

1
https://issafrica.org/iss-today/india-eyes-africa-in-its-quest-for-superpower-status
2
https://africacenter.org/spotlight/africa-india-cooperation-benchmark-partnership/

08
African and
Regional
African
Economies
 Despite the continuing headwinds, more than half the
African countries, namely 31, had higher real GDP
growth rates in 2023 than in 2022, with six of
them—Burkina Faso, Djibouti, Eswatini, Libya, the
Republic of Congo, and South Sudan - showing a
difference in growth rates of more than 2 percentage
points. In Libya, the country that recorded the highest
increase of 16.3 percentage points in 2023, growth
was boosted by continued oil production as the
security situation improved. Crucially, 15 countries
recorded growth in real GDP of at least 5% in 20233.

Real GDP growth is projected to rise to 3.7% in 2024

and will exceed the rate posted in 2022 by 2025,
reaching 4.3% as most of the effects of the
aforementioned factors fade.

Africa is a continent brimming with potential, marked The projected rebound in Africa’s average growth will
by rapid urbanization, a growing working-age be led by East Africa, (up by 3.4 percentage points)
population, rising incomes, and evolving consumption Southern Africa and West Africa (each rising by 0.6
patterns. percentage points). Importantly, 40 countries will post
higher growth in 2024 relative to 2023, and the
In recent times, African economies have been number of countries with more than 5% growth rate
severely affected by the aftermath of the COVID-19 will increase to 17.
pandemic and geopolitical uncertainties, which have
impacted global economies through various direct This is remarkable, and as the pace of growth
and indirect channels. The pandemic and volatile accelerates, Africa will retain its position as the
commodity prices have significantly affected second-fastest growing region after developing Asia,
extractive and oil-dependent economies, while with a projected average real GDP growth higher than
relatively diversified economies have demonstrated the global average of 3.2% in 2024. Furthermore, 10
greater resilience. countries in Africa will be among the world’s top 20
fastest-growing economies in 2024, sustaining the
According to African Economic Outlook 2024, trend of the past two decades4.
average real GDP growth is estimated to have slowed
from 4.1% in 2022 to 3.1% in 2023. The decline is
attributed to a variety of factors, including persistently
high food and energy prices on account of the
Russia-Ukraine war, weak global demand weighing
down export performance, climate change and 40 countries will post higher growth
extreme weather events impacting agricultural in 2024 relative to 2023, and the
productivity and power generation, and pockets of number of countries with more than
political instability and conflict in some African 5% growth rate
countries. will increase to 17.

3
African Economic Outlook 2024 – Driving Africa’s Transformation
4
African Economic Outlook 2024 – Driving Africa’s Transformation

10
 Pathways for Shared Progress: India-Africa Economic Cooperation

Table 1: Select Macroeconomic Indicators of African Countries

Country / Region Real GDP Inflation Current Account Fiscal Balance

Growth Balance

2024 2025 2024 2025 2024 2025 2024 2025

Algeria 4.0 3.7 6.8 5.7 1.0 -0.2 -11.0 -12.0

Angola 2.7 4.3 18.1 12.4 5.1 3.5 -0.9 -1.8

Benin 6.5 6.2 2.2 2.4 -4.4 -4.2 -3.8 -3.3

Botswana 4.0 4.3 4.5 4.0 1.1 1.2 -1.8 -0.3

Burkina Faso 4.1 4.3 2.1 2.2 -6.5 -5.4 -6.0 -5.4

Burundi 4.6 5.9 22.0 12.6 -6.8 -6.2 -4.4 -3.2

Cabo Verde 4.7 4.8 2.2 2.0 -6.8 -6.2 -3.1 -2.3

Cameroon 4.1 4.4 6.3 4.3 -1.9 -1.6 -0.5 -0.2

Central Africa Republic 2.3 3.1 4.1 3.4 -9.0 -9.9 -2.8 -1.9

Chad 5.2 5.3 3.4 3.2 1.3 0.8 2.7 2.2

Comoros 4.0 4.6 3.1 2.0 -5.8 -5.3 -3.6 -2.7

DR Congo 5.7 5.6 17.0 10.0 -4.5 -3.6 -2.0 -1.1

Congo, Rep. 4.3 4.4 3.4 3.2 3.2 2.3 4.0 2.6

Côte d’Ivoire 7.1 6.9 3.5 2.8 -6.9 -6.1 -4.2 -3.0

Djibouti 6.2 6.6 1.7 2.0 20.0 19.6 0.4 -0.2

Egypt 3.3 4.5 35.8 22.7 -3.0 -3.2 -7.2 -6.3

Equatorial Guinea -5.0 2.7 4.7 2.6 -3.5 -5.1 2.7 -3.7

Eritria 2.9 3.1 4.1 3.9 12.4 13.0 0.6 0.8

Ethiopia 6.7 6.7 21.0 15.8 -2.0 -1.2 -2.7 -2.5

Gabon 2.8 2.9 2.5 2.3 -0.9 0.5 -1.1 -0.7

The Gambia 6.1 5.8 15.9 11.1 -7.6 -5.6 -2.7 -2.9

Ghana 3.4 4.3 20.9 11.1 -1.9 -2.3 -4.9 -4.2

Guinea 4.2 5.4 10.8 10.4 -10.3 -9.6 -2.6 -2.4

Guinea-Bissau 4.7 5.2 5.4 3.2 -5.2 -3.3 -3.6 -3.1

Kenya 5.4 5.6 6.2 5.5 -4.6 -4.5 -5.9 -5.0

Lesotho 1.7 2.2 5.5 5.0 -4.2 -5.4 -0.4 -3.3

5
World Economic Outlook of IMF April 2024

11
 Country / Region Real GDP Inflation Current Account Fiscal Balance
Growth Balance

Liberia 5.2 6.2 8.4 5.7 -23.7 -24.6 -2.6 -3.3

Libya 7.9 6.2 2.8 2.6 24.5 22.3 4.2 8.7

Madagascar 4.5 5.3 8.1 7.5 -4.4 -4.0 -4.1 -4.6

Malawi 3.3 3.8 27.3 14.3 -8.2 -9.5 -8.7 -7.6

Mali 4.7 5.3 2.0 1.8 -6.4 -5.9 -4.3 -3.4

Mauritania 4.2 5.5 4.7 4.2 -8.5 -7.4 -2.0 -1.6

Mauritius 4.9 3.7 5.8 5.0 -4.2 -4.5 -4.5 -4.3

Morocco 3.5 3.8 4.1 3.8 -0.4 -0.9 -4.4 -4.2

Mozambique 5.2 5.2 5.0 4.6 -38.1 -43.0 -3.4 -1.3

Namibia 2.6 3.3 4.6 4.4 -9.6 -8.5 -4.2 -4.0

Niger 10.5 7.7 3.5 3.1 -7.8 -8.7 -4.2 -3.1

Nigeria 3.2 3.4 31.6 20.7 3.0 3.6 -4.3 -4.1

Rwanda 6.5 6.8 7.0 5.2 -10.9 -10.7 -6.4 -5.9

São Tomé and Príncipe 1.2 2.1 16.1 7.2 -11.4 -9.0 -3.3 -2.9

Senegal 9.3 10.2 4.9 3.3 -10.9 -8.3 -4.0 -3.2

Sychelles 4.0 4.3 1.4 2.2 -7.2 -7.2 -1.5 -1.3

Sierra Leone 4.7 5.2 33.6 20.2 -4.2 -2.1 -2.8 -2.4

Somalia 3.7 3.8 4.8 4.3 -10.4 -10.2 -0.3 -1.4

South Africa 1.3 1.6 4.8 4.5 -2.9 -3.2 -4.3 -4.2

South Sudan -5.0 1.0 17.5 18.0 -7.0 -4.0 -6.0 -2.0

Sudan -5.9 0.5 157.9 85.6 -6.5 -5.2 -6.3 -2.8

Eswatini 4.9 3.6 4.8 5.1 3.9 2.9 -2.2 -1.7

Tanzania 5.7 6.0 3.3 3.4 -4.0 -4.2 -2.5 -2.5

Togo 5.3 6.0 2.7 2.1 -3.1 -3.0 -6.6 -4.0

Tunisia 2.1 2.9 7.1 6.7 -3.3 -4.0 -6.5 -6.0

Uganda 6.0 7.0 4.5 5.0 -8.3 -8.8 -4.2 -3.6

Zambia 4.5 4.5 9.3 7.0 3.3 8.4 -5.2 -3.4

Zimbabwe 2.0 3.5 24.9 17.4 0.7 0.2 -1.7 -1.5

Source: World Economic Outlook of IMF, April 2024

12
 Pathways for Shared Progress: India-Africa Economic Cooperation

The growth outlook is mixed across

Africa’s five regions
East Africa is projected to remain Africa's January 2024 forecasts, primarily due to a 0.7
fastest-growing region, with real GDP growth percentage point increase in South Africa’s growth
increasing from an estimated 1.5% in 2023 to 4.9% in outlook. Given South Africa's significant weight in the
2024 and further to 5.7% in 2025, as per African region, this upgrade offsets the combined impact of
Economic Outlook 2024 estimates. downward revisions in the economies of Angola,
Botswana, Lesotho, Zambia, and Zimbabwe.
The Central African region is anticipated to record
slower growth, from 4.3% in 2023 to 4.1% in 2024, Fiscal deficits in the region have improved, on
before rebounding to 4.7% in 2025. The 2024 account of post-pandemic recovery and fiscal
forecast has been revised upward by 0.6 consolidation measures. The continent's average
percentage points from the January 2024 fiscal deficit increased moderately from 4.9% of GDP
Microeconomic Performance and Outlook (MEO) in 2022 to 5% in 2023.
projections, driven by stronger-than-expected growth
in the region, particularly in Chad and the The performance of the region also reflected
Democratic Republic of Congo. deceleration in the region’s three largest economies,
including Egypt, Nigeria, and South Africa.
Growth in the West African region is expected to Nevertheless, despite slower growth in the region in
accelerate, increasing from an estimated 3.6% in line with declining global growth trends, growth in the
2023 to 4.2% in 2024 before stabilizing at 4.4% in African continent remained resilient and was higher
2025. This represents a 0.3 percentage points than the world average.
upgrade for 2024 compared to the January MEO
2024 projections, on account of stronger than
anticipated growth in several economies in the region
such as Côte d’Ivoire, Ghana, Nigeria, and Senegal.

North Africa is projected to register slower growth

from an estimated 4.1% in 2023 to 3.6% in 2024,
before rising to 4.2% in 2025. The 2024 projection
has been revised downward by 0.3 percentage points
from the January 2024 MEO forecast, except for
Libya and Mauritania.

After a growth slowdown in 2023, Southern Africa's

economy is expected to recover slightly, with growth
expanding from an estimated 1.6% in 2023 to 2.2% in
2024, and further strengthening to 2.7% in 2025. The
growth rates for 2024 and 2025 have been revised
upward by 0.1 percentage point compared to the

13
Africa Trade and Investment
Trade Investment
Africa possesses a large domestic market, abundant FDI inflows to Africa declined by 3% in 2023, to USD
natural resources, and is making continuous efforts to 53 billion. The number and value of project finance
strengthen regional integration through the African deals fell, while outcomes for greenfield
Continental Free Trade Area (AfCFTA), presenting announcements were mixed across countries.
significant opportunities to enhance its position in Cross-border M&A sales, which accounted for about
global trade. While economic activity in Africa is 15% of FDI inflows to Africa in recent years, remained
recovering from the pandemic and geopolitical flat at USD 8.5 billion.
uncertainties, the pace remains modest. An
anticipated rise in commodity prices could offer the European investors remain the largest holders of FDI
necessary fiscal space by boosting export revenues. stock in Africa, holding three of the top four spots -
However, ongoing economic uncertainty keeps the Netherlands at USD 109 billion, France at USD
external demand and global investments subdued. 58 billion, the United States at USD 46 billion and the
United Kingdom at USD 46 billion7.
The continent’s merchandise trade, which achieved
an impressive growth of 16% to USD 1.4 trillion in The value of greenfield projects announced in Africa
2022 was significantly affected by ongoing global fell to USD 175 billion, from USD 196 billion in 2022.
uncertainties, contracting by 6.3% to USD 1.3 trillion However, most countries registered increases in
in 2023. Africa’s merchandise exports declined to project numbers, with the overall number of project
USD 610.46 billion in 2023. Africa’s merchandise announcements in the region rising by 7% to more
imports stood at USD 676 billion in 20236. than 800. If executed, these projects could generate
an additional 200,000 jobs in the region.
Slow growth in China and in some major advanced
economies dampened global demand for The largest increases in project value were in
commodities and depressed the continent’s chemicals to USD 13 billion and electronics to USD
merchandise exports. The combined share of China 7.6 billion, while project values for electricity and gas
and India in Africa’s total merchandise exports to Asia supply projects dropped by USD 33 billion compared
remained significantly high, stabilising around 85% in with 2022. This drop alone explains much of the
2022 and 2023, though slightly down from the 86.9% overall decline in greenfield values.
recorded in 2021.
The African Continental Free Trade Agreement
South Africa, Algeria, Nigeria, Egypt, Angola, and (AfCFTA) Investment Protocol adopted in 2023 is
Morocco are the largest exporters in Africa, together expected to contribute to growing intraregional FDI.
accounting for as much as 63% of Africa’s total The share of intraregional projects, though still
exports in 2023. Other major exporters from the relatively low, is higher in services and selected
region include Libya, DR Congo, Tunisia, Côte d'Ivoire manufacturing industries (with 20% of projects by
and Ghana. investors from Africa) than in resource-based
processing industries (with only 13% of projects
As regards imports, South Africa, Egypt, Morocco, originating from the region).
Nigeria, and Algeria are the leading importers in
Africa, which together accounted for 56% of Africa’s This indicates the pool of investors undertaking
total imports in 2023. Other major importers in Africa projects within the region is large for some sectors.
during the year include Tunisia, Kenya, Côte d'Ivoire, Also, there is an opportunity to expand intraregional
Ghana, Libya, and Ethiopia. investment in processing industries as part of the
general drive to increase value addition.

6
Afreximbank – African Trade Report 2024
7
UNCTAD – World Investment Report 2023

14
India’s
Initiatives
with Africa
 During his visit to Uganda during April 2018, Indian
Prime Minister Narendra Modi outlined 10 guiding
principles for India’s engagement with Africa, known
as the Kampala Principles. The key pillars
encompass:
• Intensify and deepen Indian engagement with
Africa;
• Create local capabilities and opportunities;
• Greater market access to Africa and greater
investments in Africa;
• Use of digital tools to support Africa’s
development;
• Enhance agricultural productivity;
• Address climate change challenges;

Traditionally, the African continent has played a • Combating terrorism together and fostering peace
central role in India’s foreign policy. India has and security;
significantly enhanced its engagement with Africa, • Free and open oceans for all;
especially since the 1990s. One of India’s primary
• Cooperation on promoting the aspirations of
goals since then has been to foster deeper and
African youth and
closer South-South cooperation and expand
economic cooperation with all nations and regions of • Collaboration on establishing a just, representative
the Continent. and democratic global order.

With Africa emerging as one of India’s critical trade Engagement with Africa has been a top priority for
partners, the Government of India in collaboration the Indian Government. During 2019, 18 new
with the Export-Import (EXIM) Bank of India launched diplomatic missions were established in Africa and a
the ‘Focus Africa’ initiative during 2002-03. The revamp of the Indian Development and Assistance
initiative was launched with the objectives of (IDEAS) scheme was suggested, under which Lines
enhancing India-Africa trade and promoting greater of Credit are extended to countries abroad at
interaction between the two sides through the concessional rates.
identification of potential trade and investment
opportunities. The Focus Africa initiative which initially
focused on Sub-Saharan Africa with emphasis on The Government of India in
seven major trading partners including Ethiopia, collaboration with the
Tanzania, Nigeria, South Africa, Mauritius, Kenya and Export-Import (EXIM) Bank
Ghana was later broadened to incorporate 17 more of India launched the ‘Focus Africa’
countries including those in North Africa. initiative during 2002-03.

16
 Pathways for Shared Progress: India-Africa Economic Cooperation

Development Partnership
India’s development partnership with Africa has been Concessional loans and grants: India’s foreign
multifaceted and evolved across areas including trade assistance in terms of concessional loans and grants
and investments, capacity building, technology to Africa are also significant. Close to 65 projects are
transfer, grants and concessional finance and Lines being implemented across African countries under
of Credit. concessional loans with a total outlay of around USD
12.37 billion9. The projects are spread across diverse
Trade and Investments: India and Africa, with their areas including drinking water, irrigation schemes,
shared colonial history were drawn together to cement, sugar, textile, technology parks and railway
collective address similar developmental challenges. infrastructure.
The India-Africa Forum Summits were devised as
structured mechanisms to strengthen the bilateral Technology transfer: Digital empowerment and
partnership between the two regions, while technology has been a critical pillar of the India-Africa
enhancing trade and investment partnerships. partnership. Indian engineers have been responsible
The Summits brought together leaders from both in providing training as well as implementation of
sides and focused on boosting economic and political major African projects, in areas including irrigation,
ties and stepping up the development partnership. infrastructure, electrical power and railway
The first Summit was held in 2008 in New Delhi, management.
followed by the second in 2011 at Addis Ababa and
the third in 2015 in New Delhi. Indian private companies have made substantial
investments in modern technologies in Africa over the
Over the years, Indian investments in Africa have also years, including loans and which in turn has facilitated
expanded significantly. Indian firms invested a economic growth in the country. India’s Digital Stack,
record-high of around USD 22 billion in Africa during that enables payments and biometric identification
20228. Indian investments are spread across diverse has been proposed for African nations for enhancing
sectors including manufacturing, telecommunications, digital access and India is collaborating closely with
infrastructure and agriculture which in turn has many African nations on this.
encourage job creation, tech transfer and economic
growth in the country.

Capacity Building Initiatives: India’s development

cooperation in Africa is based on the strong pillars of
progressive capacity building initiatives that focus on
skills, technology, and knowledge transfer. Over the
years, India has extended Lines of Credit (LoC) to
Africa that have supported infrastructure
development, agriculture, healthcare and capacity
building initiatives.

To foster cultural and educational initiatives with

Africa, India has also established scholarships and
training programmes.

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https://www.fdiintelligence.com/content/news/indias-ambitions-for-africa-trigger-mounting-fdi-wave-82958
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17
Sectoral Projects
Exim Bank LoCs: The EXIM Bank of India has been Since 2019, more than 15,000 African youth from 22
deeply engaged in promoting India’s partnership in African countries have received scholarships under
projects in Africa. It has offered over 200 Lines of the e-Vidya Bharti and e-Arogya Bharti projects for
Credit in Africa to 42 countries with a credit value of tele-education to pursue online post-school courses
USD 12 billion. Under its Overseas Investment from Indian universities across diverse disciplines
Finance Programme, it has provided finance to 77 including computer applications, business
ventures set up by over 50 companies as well as administration, commerce, social sciences, and
Trade Assistance Programme support to 22 Indian humanities11.
exporters, included MSME. It has covered sectors
such as water sanitation, capacity building, road Indian teachers have also played a crucial role in the
infrastructure, etc. The Bank recently opened an school education system in Ethiopia. India has also
office in Nairobi, Kenya. established education institutes in Africa including the
Indian Institute of Technology in Zanzibar, the
Agriculture & food processing: Agriculture has National Forensic Science University in Uganda, the
been a critical pillar of the India-Africa partnership. Entrepreneurship Development Centres in Rwanda,
Indian expertise in the field along with agricultural among others.
technologies have played a crucial role in boosting
productivity of the African agricultural sector and also Renewable energy and clean technologies: The
supported the region’s food security endeavours. focus on sustainable development and green energy
Implementation of sustainable irrigation practices, has opened up several opportunities for collaboration
knowledge and tech transfer are other aspects of in renewable energy and clean technologies between
India’s development cooperation in the sector. the two sides. India's expertise in solar energy, wind
power, and energy-efficient solutions aligns well with
Healthcare: India and Africa have a long-standing Africa's quest for sustainable energy sources. This
development cooperation in the field of health. India synergy has paved the way for joint initiatives aimed
has been a source of reliable medicines and at promoting environmentally friendly energy
vaccines at affordable rates for Africa. During the solutions across the continent. India and Africa both
Covid-19 pandemic, India supplied medicines, are members of the International Solar Alliance (ISA).
vaccines and health-related equipment to 32 African
nations10.

Telemedicine is an emerging area of cooperation.

The healthcare partnership extends to other areas
including creation of health infrastructure and supply
of equipment as well as local capacity building in
areas such as drug production through joint ventures.

Education: India has been a long-standing partner in

Africa’s education initiatives. Around 40,000 African
students have been beneficiaries of the Indian
Technical and Economic Cooperation (ITEC)
programme, under which training, and capacity
building programmes are provided to students in India.

10
https://www.mea.gov.in/Speeches-Statements.htm?dtl/37907/Remarks+by+EAM+Dr+S+Jaishankar+on+the+occasion+of+Africa+Day+Celebrations
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https://www.mea.gov.in/Speeches-Statements.htm?dtl/37907/Remarks+by+EAM+Dr+S+Jaishankar+on+the+occasion+of+Africa+Day+Celebrations

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 Pathways for Shared Progress: India-Africa Economic Cooperation

Supporting harmonising policies and regulations Somalia, and Cote d’Ivoire. Progress is also
across its member countries, ISA’s current underway in Tanzania, Uganda, Senegal, and
interventions include formulating the National Solar Madagascar. Discussions are ongoing with Djibouti,
Energy Roadmap for Madagascar, Chad, Guinea, Mauritius, and Guinea.
and Uganda, tailored to the country's priority
interventions. The ongoing regulatory support to The SolarX Startup Challenge seeks innovative,
facilitate the growth of the solar energy sector cost-effective, and scalable local solutions to boost
ensures a supportive environment across Member the solar startup ecosystem. The first edition
Countries like Ethiopia, Nigeria, Uganda, Chad, focussed on Africa, receiving over 180 applications
Djibouti, Madagascar, Somalia, Gambia, and Liberia. from 28 countries.

ISA's capacity-building and training efforts have Under the G20 2023 India Presidency, ISA launched
made a significant impact, reaching 2,282 the virtual Green Hydrogen Innovation Centre
participants from the Africa region. The training (GHIC); this Centre of Excellence supports GH's
programmes focused on solar pumping systems, production, utilisation, and trade, providing a platform
solar mini-grids, solar rooftops, and solar parks, for knowledge sharing and building competency
enhancing the region's expertise in solar technology. across the GH value chain. GHIC serves as a
dynamic one-stop gateway to provide access to the
The Solar Technology Application Resource Centre GH knowledge repository, GH value-chain insights
(STAR-C) initiative is helping build the required mapped for 40 countries-including six African
human capacity and skills within member countries to countries - Namibia, South Africa, Nigeria, Egypt,
undertake energy transition independently. STAR-Cs Ethiopia, and Algeria.
have been successfully established in Ethiopia,

19
India-Africa
Trade
 Pathways for Shared Progress: India-Africa Economic Cooperation

Trade Relations
India’s trade with the African region comprising 54
countries was USD 97.85 billion in 2022-23. During
the period 2018-19 to 2022-23, trade increased at a
CAGR of 8.87%.

India’s exports to the African region stood at USD

51.20 billion and recorded a growth of 27.30% in
2022-23 vis a vis 2021-22. India’s imports from the
African region were USD 46.65 billion and registered
a decline of 5.41% during the same period.

In 2023-24, world trade in merchandise fell by 5%

due to geopolitical tensions, slowdown of major
economies, disruptions in supply chain leading to
India and Africa share a longstanding and high cost and delays in shipment. This was mirrored
multifaceted economic relationship characterized by in trade between India and Africa which fell by 15% in
robust trade, investment, and development 2023-24. While India’s export to Africa declined USD
cooperation. India’s cumulative investments in Africa 5.82 billion, India’s import from Africa came down by
during April 1996 to March 2023 amounted to USD USD 8.63 billion which resulted in increase in trade
75.2 billion. As emerging economies with surplus of India with Africa.
complementary strengths, India and African nations
have engaged in various sectors, including agriculture,
pharmaceuticals, technology, and infrastructure.

Bilateral trade expanded significantly by 9.26% in FY

2022-23 reaching a peak of almost USD 100 billion,
although it has declined in 2023-24. India is one of
Africa's top trading partners and the fourth-largest India’s exports to the African region
investor in the continent. stood at

India is also a major employer in several African

USD 51.20 billion and
nations and works on skill development programs for recorded a growth of 27.30%
local youth. in 2022-23 vis a vis 2021-22.

21
 Figure 1: India Africa Bilateral Trade in USD Billion

India's Bilateral Trade with Africa

120

97.85
100
83.4
V a lu e s in U S D B illio n

80 69.66 89.54
66.68 India’s Export
60 51.2
49.32 46.65 45.38 India’s Import
55.91
41.11 37.69 40.22 38.02
28.18
28.99 Total Trade
40 28.54 27.73
Trade Balance
20 7.35
4.55
-0.45
0 -8.7 -9.1
-12.57
2018 -19 2019-20 2020-21 2021-22 2022-23 2023-24
-20

Source: Ministry of Commerce & Industry, Government of India

Table 2: Region Wise Indian Exports to Africa, USD billion

Region 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

West Africa 7.70 8.18 9.45 13.57 17.73 12.88

East Africa 7.38 6.64 5.79 8.26 11.07 11.40

Southern African Customs Union (SACU) 4.38 4.41 4.22 6.61 8.92 9.30

North Africa 5.89 5.44 4.81 7.13 8.35 7.21

Other South African Countries 1.86 2.87 1.94 2.97 3.57 3.09

Central Africa 1.34 1.46 1.53 1.68 1.57 1.49

India's Total Exports to Africa 28.54 28.99 27.73 40.22 51.20 45.38

India's Total Exports to World 330.08 313.36 291.81 422.00 450.96 437.11

Source: Ministry of Commerce & Industry, Government of India

While West Africa continues to be the highest West African countries including Nigeria, Senegal,
recipient of Indian exports to Africa, exports have Benin, and Cote D' Ivoire, fell sharply in 2023-24.
fallen by USD 4.45 billion. Exports to Togo, which was
the largest export destination in 2022-23 fell by India’s exports in 2023-24 increased with East Africa
46.61% in 2023-24. India’s exports to other major and SACU countries.

22
 Pathways for Shared Progress: India-Africa Economic Cooperation

Table 3: Region Wise India’s Imports from Africa, USD billion

Region 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

Southern African Customs Union (SACU) 7.55 7.75 8.11 11.77 10.90 11.25

West Africa 20.08 17.24 11.73 22.16 18.20 11.22

Other South African Countries 5.64 5.34 2.64 4.73 6.32 6.13

North Africa 5.73 5.55 4.30 7.55 7.37 4.32

East Africa 1.55 1.44 1.28 2.81 3.06 3.93

Central Africa 0.55 0.38 0.11 0.29 0.80 1.16

India's Total Imports from Africa 41.11 37.69 28.18 49.32 46.65 38.02

India's Total Imports from World 514.08 474.71 394.44 613.05 714.04 675.43

Source: Ministry of Commerce & Industry (Govt of India)

West Africa consistently used to be the largest source Imports from other top countries of West Africa fell
market within Africa for India’s import requirements till including Nigeria, Ghana, Guinea, Senegal, Cote D'
2022-23. However, this dropped by 38.46% in Ivoire, etc. SACU emerged as the largest source
2023-24. Within West Africa, imports from Togo and market for India in Africa. India imported USD 11.25
Cameroon increased to USD 850.39 million and USD billion from SACU, mostly from South Africa.
788.11 million respectively.

Trade flow – Top 10 countries

Figure 2: Top 10 export destinations for goods exported by India in Africa, USD billion

Source: Ministry of Commerce & Industry, India

23
South Africa is India’s largest export destination in Djibouti, Ghana and Morocco. The top 10 export
Africa and 18th largest trade partner in the world. destinations constitute 71% of India’s exports to
India’s other top export destinations in Africa include Africa.
Tanzania, Nigeria, Egypt, Togo, Kenya, Mozambique,

Figure 3: Top 10 source countries for goods imported by India from Africa, USD billion

Source: Ministry of Commerce & Industry, India

India’s top 10 African import source countries include Ghana, Morocco, Guinea, Egypt and Algeria,
South Africa, Nigeria, Angola, Tanzania, Mozambique, representing 80% of India’s imports from Africa.

Figure 4: Top 10 trade partners of India in Africa, USD billion

Source: Ministry of Commerce & Industry, India

24
 Pathways for Shared Progress: India-Africa Economic Cooperation

India's largest trading partner in Africa is South Africa with a total trade value of USD 19.25 billion in the fiscal year
2023-24. Other top trade partners in Africa include Tanzania, Nigeria, Egypt, Mozambique, Angola, Togo, Kenya,
Ghana and Morocco.

Top Commodities
India’s top ten exports to Africa Other top export items belonged to the broad
categories of cereals (HS 10), vehicles other than
Mineral fuels and oils (HS 27) was India’s top export
railway or tramway (HS 87), machinery and
to Africa during 2023-24, with overall exports
mechanical appliances (HS 84), among others.
amounting to USD 15.31 billion, followed by
India’s top ten exports account for more than 78% of
pharmaceutical products (HS 30) at USD 3.94 billion.
India’s total exports to the region.

Table 4: India’s top 10 exports to Africa in 2023-24, USD billion

HS Code Commodity Exported Value in

2023-2024

27 Mineral fuels, mineral oils and products of their distillation; 15.31

bituminous substances; mineral waxes

30 Pharmaceutical products 3.94

10 Cereals 3.63

87 Vehicles other than railway or tramway rolling stock, 3.53

and parts and accessories thereof

84 Nuclear reactors, boilers, machinery and mechanical 2.67

appliances; parts thereof

17 Sugars and sugar confectionery 1.83

85 Electrical machinery and equipment and parts thereof; 1.48

sound recorders and reproducers, television image and
sound recorders and reproducers, and parts

39 Plastic and articles thereof 1.15

73 Articles of iron or steel 0.96

52 Cotton 0.93

Source: Ministry of Commerce and Industry, India

25
India’s top imports from Africa Other top import items were in the categories of
copper and articles (HS 74), edible fruits and nuts
Mineral fuels and oils (HS 27) was India’s top
(HS 08) and inorganic chemicals (HS 28). India’s top
imported item from Africa with an imported value of
ten imports from Africa, with a cumulative value of
USD 15.45 billion in 2023-24, followed by gems &
around USD 35 billion, account for more than 91% of
jewellery (HS 71), with imported value at USD
India’s total imports from Africa.
9.7 billion.

Table 5: India’s top 10 imports from Africa in 2023-24, USD billion

HS Code Commodity Imported Value in

2023-2024

27 Mineral fuels, mineral oils and products of their distillation; 15.45

bituminous substances; mineral waxes

71 Natural or cultured pearls, precious or semiprecious stones, 9.69

precious metals clad with precious metal and articles thereof;
imitation jewellery; coin

74 Copper and articles thereof 2.42

08 Edible fruit and nuts; peel or citrus fruit or melons 1.51

28 Inorganic chemicals; organic or inorganic compounds of 1.33

precious metals, of rare-earth metals, or radi. elem. or of isotopes

26 Ores, slag and ash 1.12

25 Salt; sulphur; earths and stone; plastering materials, lime and cement 1.00

12 Oil seeds and olea. fruits; misc. grains, seeds and fruit; 0.87
industrial or medicinal plants; straw and fodder

07 Edible vegetables and certain roots and tubers. 0.80

31 Fertilisers 0.69

Source: Ministry of Commerce and Industry, India

Currently, Africa’s exports to India are dominated by 5 destinations of South Africa, Nigeria, Egypt, Togo
African countries, which account for over two-thirds of and Kenya accounting for almost half the total
the total exports. There is a need for India to explore exports to Africa.
other sources of imports from Africa. A trade target of USD 200 billion can be set for 2030
At the same time, India’s exports to Africa are heavily at a modest compound annual growth rate of
concentrated in a few large economies with the 5 top 12.08%.

26
African
Continental
Free Trade
Area
 • Enhance manufacturing-related exports from Africa
by USD 560 billion.
• Encourage greater wage increases for women
(10.5%) compared to men (9.9%).
• Increase wages for both skilled and unskilled
workers by 10.3% and 9.8%, respectively.

As part of its mandate, the AfCFTA is to eliminate trade

barriers and boost intra-Africa trade. In particular, it is to
advance trade in value-added production across all
service sectors of the African economy.

The AfCFTA entered into force on May 30, 2019, after

24 Member States deposited their Instruments of
Ratification following a series of continuous
continental engagements since 2012.

The AfCFTA is one of the flagship projects of Agenda The AfCFTA will progressively eliminate tariffs on
2063: The Africa We Want, the African Union’s intra-Africa trade, making it easier for African
long-term development strategy for transforming the businesses to trade within the continent and benefit
continent into a global powerhouse. from the growing African market.

The AfCFTA is the world’s largest free trade area, The establishment of AfCFTA presents a significant
bringing together the 55 countries of the African Union opportunity to foster economic integration, boost
(AU) and eight Regional Economic Communities economic progress, reduce poverty, increase
(RECs). The overall mandate of the AfCFTA is to create employment opportunities, and shift Africa's
a single continental market with a population of about economic dependence on raw materials and natural
1.3 billion people and a combined GDP of resources towards more diversified economies. The
approximately USD 3.4 trillion12. Agreement was constructed around trade facilitation
measures designed specifically for the African market
The long-term objectives include creating a single,
and targeted at streamlining import, export, and
liberalised market; reducing barriers to capital and labour
transit processes.
to facilitate investments; developing regional infrastructure;
and establishing a continental customs union. The AfCFTA range is wide with inclusion of services,
investments, competition law, digital trade, and
According to a report by World Bank, AfCFTA presents a
intellectual property rights.
major opportunity for African countries to enhance
growth, reduce poverty, and expand economic inclusion, Realizing the full potential of AfCFTA requires a
with the following expected outcomes13: comprehensive approach that addresses policy
• Increase intra-African trade by 52.3% by eliminating harmonization, infrastructure development, regulatory
import duties, and potentially double this increase by frameworks, and capacity building.
removing non-tariff barriers.
• Raise the earnings of nearly 68 million people who The overall mandate of the AfCFTA
currently make less than USD 5.50 a day and help 30 is to create a single continental
million Africans escape extreme poverty. market with a population of about
• Increase Africa's income by USD 450 billion (a 7% 1.3 billion people
rise) by 2035, while boosting global income by USD and a combined GDP of approximately
76 billion.
USD 3.4 trillion.
12
https://www.worldbank.org/en/topic/trade/publication/the-african-continental-free-trade-area
13
https://www.worldbank.org/en/topic/trade/publication/the-african-continental-free-trade-area

28
 Pathways for Shared Progress: India-Africa Economic Cooperation

India’s Partnering Role

With the abolition of tariffs on 90% of trade items, the • Addressing job losses in affected industries by
AfCFTA is expected to increase intra-regional preparing governments to provide workers with
commerce from the current 17% of all trade in Africa appropriate safety nets and retraining programs.
to an estimated 52% within five years14. To address
• Supporting governments in implementing
this opportunity, Indian industry can consider
measures to enhance the workforce's capacity to
establishing operations in the 230 special economic
seize new opportunities.
zones (SEZs) across Africa.

India can work with Africa to leverage AfCFTA through

The long-term objectives of the Indian Government's
initiatives in renewable energy, transformative green
Focus Africa project align with Africa's Agenda 2063,
industrialization, agriculture, and food security.
defining clear priorities for the Indian government's
Moreover, India can contribute to strengthening
partnership with Africa in the short, medium, and long
financial institutions, engaging in multilateral forums,
terms. Leveraging private investments and blended
and supporting technology development to enhance
finance, these efforts could mobilize development aid
the effectiveness of AfCFTA.
to achieve the numerous objectives outlined in
Agenda 2063.
Despite the youth bulge in Africa, there remains a
noticeable gap between the current education and
Support from India can help in the following areas:
training offerings and the skills demanded by
• Regional production networks: India can consider businesses. There is a pressing need to develop not
conceptualising regional production networks only the skills required by today's businesses but also
based on the resources of African nations in those needed for the future. Leveraging digital
consultation with them. This can be followed up infrastructure can play a crucial role in bridging this
with setting up India specific economic zones, to gap in Africa's diverse education sector.
be developed in partnership with Indian industry,
for products along with their inputs.

Figure 5: Sector-wise Indian Investments in Africa

Others 4.2%
Construction 4.3%

Wholesale, retail trade,

restaurants & hotels 8.7%

Manufacturing
Transport, storage 35.7%
and communication
services 10.3% USD 65.8
billion

Agriculture, hunting,
forestry and fishing 14.0%

Financial, insurance, real estate

and business services 22.8%

Note: Legend is arranged based on the size of its share in total investments. Cumulative approved investments in Africa during April 2010 – March 2023 stood at
USD 65.8 billion
Source: RBI and India Exim Bank analysis
14
https://www.un.org/africarenewal/magazine/may-2023/afcfta-seizing-opportunities-prosperous-africa

29
Top 15
African
Economies
 Pathways for Shared Progress: India-Africa Economic Cooperation

To understand the opportunities provided by African

nations, an in-depth study of the growing economies
on the African continent is pivotal. The following
countries, identified for their high exports, were
studied to summarize their current economic
scenarios. These scenarios form the foundation for
business opportunities to enhance trade.

Egypt
Figure 6: % Share of GDP

% Share of GDP in 2023 GDP

USD 476.7 billion in 2022
Agriculture 11.0%
Current Account Balance % of GDP
-3.5 in 2022
POPULATION
111 million in 2022
Services Industry
55.0% 34.0% Population ages 15-64 (% of total)
62.3

Source: Country Brief-Egypt 2024; Africa Export-Import Bank Source: World Bank; IMF Datamapper

Egypt is the 12th largest country on the continent and Egypt's inflation, driven by global supply chain
the 30th largest globally, with a population of disruptions from the Ukraine war, surged to over 23.5
approximately 114 million, making it the third most percent in 2023 from 8.5 percent in 2022. Despite
populous country in Africa15. this, the fiscal deficit improved, narrowing from 7.5
percent of GDP in 2020 to 5.8 percent in 2022,
In 2023, Egypt emerged as the top contributor to supported by increased economic activity and higher
Africa’s GDP, accounting for 13.9 percent. Egypt has exports, particularly liquefied natural gas to Europe.
also been a leading driver of trade in Africa, holding
an estimated 10 percent share in 2023. Despite the In 2023, Egypt’s total exports were estimated at USD
challenges posed by the COVID-19 pandemic, 39.3 billion, down from USD 48.4 billion in 2022.
Egypt’s GDP expanded by 3.6 percent in 2020, while India is among the top 10 import partners of Egypt,
many countries experienced recession. Building on with a total trade balance of -USD 2.5 billion in
this momentum, the economy continued its upward 202317. The top products exported from Egypt to India
trajectory, growing by 6.7 percent in 202216. include mineral fuels, salts and sulphur, cotton, and

15
Egypt Country Brief: https://media.afreximbank.com/afrexim/countrybrief_Egypt_2024.pdf
16
Egypt Country Brief: https://media.afreximbank.com/afrexim/countrybrief_Egypt_2024.pdf
17
ITC Trade Map

31
fertilizers, while the major imports from India are The country also has significant potential for
meat, mineral fuels, and machinery. renewable energy, with substantial investments in
solar and wind projects, and a robust financial sector
Between 2000 and 2023, India invested around USD with ongoing reforms aimed at stability and growth.
10.4 million in Egypt, focusing on sectors such as
financial services, real estate, electricity, gas, and water18. Opportunities for Egypt include the potential revival
and expansion of its tourism industry, economic
Egypt's strategic location provides access to both reforms aimed at improving the business
African and Middle Eastern markets, with the Suez environment, significant infrastructure investments,
Canal being a crucial global trade route. regional trade agreements like the AfCFTA and
The economy is diversified, including key sectors like increased foreign direct investment from Gulf
tourism, agriculture, natural gas, oil, and manufacturing. countries and China.
With a population exceeding 100 million, Egypt has a
large domestic market that drives demand.

Nigeria
Figure 7: % Share of GDP (Q1 to Q3)

% Share of GDP in 2022 GDP

USD 472.6 billion in 2022
Agriculture Current Account Balance % of GDP
25.4% 0.2 in 2022
POPULATION
218 million in 2022
Services
56.0% Population ages 15-64 (% of total)
53.9
Industry
19.0% Inflation, Consumer Price (annual %)
18.8 in 2022 from 17 in 2021

Source: Macroeconomic Outlook 2023; IMF Source: World Bank

The country's economic performance in 2022 was The structure of Nigeria's economy is evolving, with
notably driven by the non-oil sector, which saw an sectors like finance and insurance, mining and
average growth of 5.1% in the first three quarters19. quarrying, water and waste management, and
Nigeria's economy achieved an estimated real GDP transport and storage showing notable growth, though
growth of 3.3% in 202420. their contribution to the overall GDP remains modest.

The services sector showed robust growth at 7.1%, Nigeria's reliance on crude oil, which accounted for
and the agricultural sector expanded by 1.8% and the 79.2% of total exports and grew by 59.6%, continues
industrial sector posted a negative growth of 5.7%. to make the economy vulnerable to price fluctuations.

18
DPIIT & RBI; and India Exim Bank Analysis
19
Macroeconomic outlook 2023
20
IMF: https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD/NGA

32
 Pathways for Shared Progress: India-Africa Economic Cooperation

Non-oil exports also increased by 41.8%, while Indian investments in Nigeria span sectors such as
imports were driven by refined petroleum products, construction, community, social, and personal
machinery, and transport equipment21. services, and other miscellaneous areas.

India plays a significant role in Nigeria's trade Nigeria's large and growing population makes it one
landscape, being one of its top import partners. Major of Africa's largest consumer markets, supported by
Nigerian exports to India include mineral fuels, oil abundant natural resources, particularly oil and gas.
seeds, edible fruits and nuts, and aluminium, while The economy is diverse, encompassing agriculture,
key imports from India comprise mineral fuels, telecommunications, and services, and is buoyed by
machinery, vehicles, and pharmaceuticals. a strong entrepreneurial spirit and strategic location
that offers access to West African markets and
international trade routes.

South Africa
Figure 8: % Share of GDP

% Share of GDP in 2022 GDP

USD 405.27 billion in 2022
Others 12% Agriculture 4%
Current Account Balance % of GDP
Industry - 1.6 in 2023
18%
Population
60 million in 2022
Population ages 15-64 (% of total):
66
Inflation, Consumer Price (annual %)
6 in 2023 from 7.0 in 2022
Services 66%

Source: World Bank Source: World Bank

South Africa is the second largest economy in During 2023-24, exports from India to South Africa
Sub-Saharan Africa. South Africa’s real GDP growth were USD 8.70 billion. India’s imports from South Africa
decelerated from 1.9% in 2022 to 0.6% in 2023. during the same period were USD 10.54 billion22.

Growth in the key sectors of agriculture came down, Major exported items from India to South Africa
while manufacturing picked up marginally owing to include petroleum products (USD 3.76 billion), motor
increased demand for petrochemicals and vehicles. vehicle/cars (USD 1.54 billion), drug formulations,
The exchange rate of the South African rand biologicals (USD 0.57 billion), telecom instruments
weakened by 12.4% against the US dollar in 2023 (USD 0.21 billion), industrial machinery for dairy, etc.
due to declining terms of trade for South Africa’s main (USD 0.14 billion), other construction machinery
exports. The financial sector is resilient, well (USD 0.10 billion), inorganic chemicals (USD 0.09
capitalized, and profitable. billion), etc. in 2022-2323.

21
Economic Outlook 2023
22
Ministry of Commerce: https://tradestat.commerce.gov.in/eidb/iecnt.asp
23
https://www.ibef.org/indian-exports/india-south-africa trade#:~:text=In%202022%2D23%2C%20bilateral%20trade,from%20April%202000%2DSeptember%202023.

33
Major items imported by India from South Africa (1.0%), construction (0.3%) and Community, social
include coke, coal and briquettes (USD 3.48 billion), and personal services (1.5%)24.
gold (USD 3.36 billion), pearl, precious and
semi-precious stone (USD 0.84 billion), copper and The potential sectors of interest for Indian industry in
products made of copper (USD 0.78 billion), bulk South Africa agriculture, agro-processing, agri-tech,
minerals and ores (USD 0.43 billion), pulp and ICT, healthcare, automotive, solar energy, education,
wastepaper (USD 0.39 billion), iron and steel (USD and infrastructure.
0.24 billion), etc. in 2022-23.
Potential industries for suitable business
As per the Ministry of Finance, Government of India, opportunities for India are cold storage, beer & wine,
during the last two decades (FY01 to FY 22), India’s medical plastics & disposable plastics, vehicles,
overseas direct investment to South Africa amounted machinery, textiles, and chemicals. The data from fDi
to USD 949 million. From April 2010 – March 2020, markets of Financial Times suggests that India’s
South Africa attracted notable Indian investments in announced investments have mostly been in the
several sectors of Manufacturing (0.7%), Financial, sectors like coal, oil and gas, renewable energy,
insurance, real estate, and business services (1.8%), automotives, metals, hotel and tourism and software
Agriculture, forestry, fishing, and mining (0.3%), & IT services.
Wholesale, retail trade, restaurants, and hotels

Algeria
Figure 9: % Share of GDP

% Share of GDP in 2022 GDP

USD 195 billion in 2022
Others 4% Agriculture 11%
Current Account Balance % of GDP
8.6 in 2022 to 2.3 in 2023
Services POPULATION
39% 45 million in 2022
Population ages 15-64 (% of total)
63
Inflation, Consumer Price (annual %)
Industry 9.3 in 2022 from 7.2 in 2021
46%

Source: World Bank Source: World Bank

Algeria’s economic growth rate accelerated from 3.6% Economic growth depends heavily on the
in 2022 to 4.2% in 2023, driven by the hydrocarbon performance of the oil and natural gas sectors.
sector, industry, construction, and services25. A new Nevertheless, the share of hydrocarbons in GDP has
monetary and banking law was passed to stimulate been declining, from 44.3% in 2005 to 34.2% in 2012
financial innovation and inclusion and modernize and 19.5% in 2019, while that of services has been
financial supervision tools. rising. Real non-hydrocarbon GDP growth accelerated
in 2022, supported by private consumption26.
24
RBI; and India Exim Bank Analysis
25
African Development Bank Group: https://www.afdb.org/en/countries-north-africa-algeria/algeria-economic-outlook
26
World bank: https://documents1.worldbank.org/curated/en/099607506202340553/pdf/IDU029af6e650ac6404e170bc79062eb3b0de925.pdf

34
 Pathways for Shared Progress: India-Africa Economic Cooperation

The trade between India and Algeria has rebounded Significant opportunities exist in the segments of oil
by 24% in 2022 and reached USD 2.1 billion. Exports and gas, renewable energy, defence, cereals, dairy,
from India to Algeria during 2023-24 were USD power, ICT, and infrastructure.
848.16 million. India’s imports from Algeria during the
same period were USD 885.54 million27. FDI received from India to Algeria during FY 2001 to
2022 was USD 12 million. Investments are
India’s export to Algeria consists of rice, heterocyclic concentrated in the areas of business services,
compounds, polyacetals, etc. India’s import from pharmaceuticals and industrial equipment.
Algeria consisted largely of oil and oils obtained from
bituminous minerals, and crude oil. The top Indian investing companies in Algeria include
BLS International Services Limited, Vijay Electricals,
Cooperation in the energy and mining sectors is the Dodsal Engineering and Construction Shapoorji
main interest for most Indian businesses, in view of Pallonji, Zydus Cadila, Dabur, Sun Pharma and Cipla,
the availability of oil, natural gas and mining products among others.
in Algeria.

Morocco
Figure 10: % Share of GDP

% Share of GDP in 2022 GDP

USD 130.91 billion in 2022
Other 9.7% Agriculture 10.3%
Current Account Balance % of GDP
-3.5 in 2022
POPULATION
Industry 37 million in 2022
Services 25.5%
Population ages 15-64 (% of total)
54.5%
66
Inflation, Consumer Price (annual %)
6.7 in 2022 from 1.4 in 2021

Source: World Bank Open Data Source: World Bank; IMF Datamapper

Morocco, situated in North Africa, has made The GDP is projected to recover, with an expected
significant economic progress over the last decade, growth rate of 2.8% in 2023 and 3.1% in 202428.
driven by robust public investment and Additionally, inflation is expected to trend downward,
comprehensive institutional, macroeconomic, and providing some relief to consumers and businesses
sectoral reforms. However, the economic landscape alike. The country's ability to navigate the economic
has faced challenges recently. The GDP growth, fallout from the COVID-19 pandemic and various
which was a robust 8% in 2021, fell to 1.3% in 2022 geopolitical shocks underscores its economic
as a result of global conditions.

27
Ministry of Commerce: https://tradestat.commerce.gov.in/eidb/iecnt.asp
28
https://www.worldbank.org/en/country/morocco/publication/morocco-economic-monitor-fall-2023-from-resilience-to-shared-prosperity

35
resilience and adaptive capacity. A relatively stable India is the 11th largest source market for goods
currency has also been a cornerstone of Morocco's imported by Morocco which includes mineral fuels,
economic stability, helping to mitigate some of the iron & steel, motor vehicles, medicaments, cereals
volatility experienced in other sectors. etc. India is also the 7th largest export destination for
goods exported by Morocco including fertilisers,
Morocco has been open to international trade since the inorganic chemicals, aluminium etc.
1980s. Morocco has FTAs already in force with UK,
India received USD 141 million FDI equity inflow from
UAE, Türkiye, US, EU and EFTA countries.
Morocco from Apr 2000 - March 202430, while India’s
outward direct investment to Morocco is USD 238
Morocco's long coastlines have made it a major fish
million31.
producer in Africa. To keep this industry healthy for the
future, Morocco has adopted practices that are good for Morocco's government is working to create more jobs
the environment and the economy. Its "Blue Strategy" and bring in investment from other countries.
focuses on creating areas of economic activity along Emphasis is placed on value added sectors:
the coast. Additionally, Morocco has the most extensive automotive, aerospace, textile, pharmaceuticals,
forest area in North Africa. outsourcing, and agro-food industry.

Apart from sharing close political relations, the trade Morocco is extensively working on renewable energy,
ties between India and Morocco are also thriving. in 2019 share of renewable energy in total energy
The total trade grew at 8.60 % CAGR between 2019-20 consumption in 11% while the target set for 2035 is
to 2023-24. India exported USD 1.03 billion, while 40%32. This provides an important avenue for Indian
importing USD 1.04 billion worth of commodities in companies to invest in Morocco as the country is
looking to reduce the energy cost and increasing the
2023-24 from Morocco29.
use of renewable and low carbon energy.

Ethiopia
Figure 11: % Share of GDP

% Share of GDP GDP

USD 126.7 billion in 2022
Current Account Balance % of GDP
Agriculture -4.3 in 2022
39.0%
POPULATION
123 million in 2022
Services
38.0% Population ages 15-64 (% of total)
57.2

Industry 23.0%

Source: Ethiopia Country Brief 2024; Africa Export-Import Bank Source: World Bank; IMF Datamapper

29
Data cited from Ministry of Commerce, Govt of India
30
DPIIT
31
Dept of economic affairs, Govt of India
32
General report, The New Development Model of Morocco: https://www.csmd.ma/documents/CSMD_Report_EN.pdf

36
 Pathways for Shared Progress: India-Africa Economic Cooperation

Ethiopia's economy, one of the fastest growing in the machinery, while Ethiopia exports oil seeds and
region, expanded by 6.1% in 2023 despite global and vegetable oil to India.
regional challenges33. Agriculture remains pivotal,
contributing significantly to GDP and employing over Indian companies have made significant investments
70% of the population. Projections indicate GDP in Ethiopia, particularly in agriculture, floriculture,
growth of 5.8% in 2023 and 6.2% in 202434. engineering, manufacturing, cotton and textiles, water
management, and healthcare. Ethiopia’s strategic
India is a key economic partner for Ethiopia, being location, diversified economy, robust trade with India,
the second-largest source of imports. Bilateral trade infrastructure investments, and educational cooperation
between the two countries amounted to USD 642.59 are significant strengths. Opportunities arise from
million in 2022-23. India's main exports to Ethiopia industrialization, economic diversification, regional
include vehicles, pharmaceuticals, sugar, cereals, and trade agreements, renewable energy, and tourism.

Kenya
Figure 12: % Share of GDP

% SHARE OF GDP IN 2023 GDP

USD 113.42 billion in 2022
Agriculture
21.8% Current Account Balance % of GDP
-5.2 in 2022
POPULATION
54 million in 2022
Services Industry
61.3% 16.9% Population ages 15-64 (% of total)
59.3
Inflation, Consumer Price (annual %)
7.1 in 2022 from 6.1 in 2021

Source: Kenya Economic Survey, 2024 Source: World Bank; IMF Datamapper

Kenya's economic outlook for 2024 shows both rising debt service obligations, high borrowing costs,
strengths and challenges. In 2023, Kenya’s real GDP and the sharp depreciation of the shilling. However,
growth accelerated to 5.6%, up from 4.9% the the current account deficit narrowed from KSh 694.2
previous year35. billion in 2022 to KSh 603.7 billion in 202336.

However, projections for 2024 indicate a slight Despite these hurdles, Kenya's economy has shown
slowdown to 5.0%. This deceleration is due to a remarkable resilience, driven by strategic government
challenging environment marked by elevated inflation, policies aimed at bolstering macroeconomic stability.

33
IMF Estimates: https://www.undp.org/ethiopia/publications/undp-ethiopia-quarterly-economic-profile-january-2024
34
African Development Bank Group: https://www.afdb.org/en/countries/east-africa/ethiopia/ethiopia-economic-outlook#:~:text=Real%20GDP%20growth%20fell%
20to,and%204.4%25%20in%202022).
35
World Bank Data: https://www.worldbank.org/en/news/press-release/2024/06/05/kenya-afe-economy-exhibited-robust-growth-in-2023-despite-persistent-
challenges#:~:text=Kenya's%20Economy%20Exhibited%20Robust%20Growth%20in%202023%20Despite%20Persistent%20Challenges,-Share%20more&text=N
airobi%2C%20June%205%2C%202024%20%E2%80%94,to%20slow%20down%20to%205.0%25.
36
Kenya Economic Survey 2024: https://www.knbs.or.ke/wp-content/uploads/2024/05/2024-Economic-Survey.pdf

37
Notably, merchandise exports grew by 15.5%, "Silicon Savannah" with a thriving technology industry
significantly outpacing the 5.8% growth in further enhance its economic profile.
merchandise imports in 2023.
Kenya's power sector is one of the most developed in
India is among Kenya's top import partners, with key sub-Saharan Africa and is a global leader in the
exports to India including organic chemicals, edible off-grid solar and geothermal markets, with over 90%
vegetables, coffee, tea, and spices, while imports of its power generated from renewable energy
from India include mineral fuels, pharmaceuticals, sources.
cereals, machinery, and vehicles.
There are many opportunities for growth in Kenya,
Indian investments in Kenya have totalled around such as ongoing and planned infrastructure projects,
USD 286.8 million from 1996 to 2023, focusing on tourism potential, regional trade integration within the
sectors such as transport, storage, and East African Community, and investments in
communication services, wholesale and retail trade, renewable energy.
restaurants and hotels, and construction.
The growing middle class boosts demand for goods
Kenya benefits from its strategic location as a trade and services, providing a substantial market for
hub for East Africa and has a diverse economy that businesses. Kenya’s leadership in renewable energy,
includes agriculture, manufacturing, tourism, and particularly geothermal and wind power, positions it
services. Its strong financial sector and reputation as well for sustainable growth.

Angola
Figure 13: % Share of GDP

% Share of GDP in 2022 GDP

USD 106.78 billion in 2022
Agriculture
13.6% Current Account Balance % of GDP
9.6 in 2022
POPULATION
36 million in 2022
Services Population ages 15-64 (% of total)
41.5%
52
Industry
44.9% Inflation, Consumer Price (annual %)
21.4 in 2022 from 25.8 in 2021

Source: World Bank Open Data Source: World Bank Open Data & IMF Datamapper

Angola's economy exhibits concentration within the oil This reliance on a single industry highlights the
and gas sector. Oil production directly contributes potential vulnerability to external factors impacting
approximately 29% to the nation's GDP. Its exports global oil prices.
constitute a substantial 96% of Angola's total exports.

38
 Pathways for Shared Progress: India-Africa Economic Cooperation

From 2014 to 2022, Angola experienced negative and services sectors. Water is abundant in Angola,
real GDP growth primarily due to a downturn in with around 46% of the country’s land being arable,
international oil prices. Despite the challenges, highlighting the underutilized potential of
Angola's economy stabilized and grew at a rate of agriculture. Investments in modern mechanized
3% in 2022, largely due to sustained high oil prices agriculture technology and storage facilities could
driven by geopolitical conflicts. significantly increase productivity.

Additionally, Angola's current account balance is in Moreover, Angola has a hydropower potential of
surplus, amounting to USD 11.76 billion. However, approximately 18 GW37, which could meet both
inflation and unemployment remain high, at levels of national and regional demand. The country also
21.4% and 30%, respectively. boasts diverse tourist attractions that have yet to
be fully exploited.
India and Angola share close trade relations. India is
the 5th largest source market and 2nd largest export Diversifying into agriculture and services can
destination for Angola. Around 99% of Angola’s
provide Angola with a more resilient economic
export to India is constituted of oil & gas sector only.
foundation, reducing its dependence on the volatile
India’s export to Angola is relatively diversified
oil and gas sector. By leveraging its natural
covering fuel, cereals, motor cars, medicine, etc.
resources and investing in infrastructure and
Angola has significant potential to diversify and technology, Angola can foster sustainable
expand its economy, particularly in the agriculture economic growth and development.

Tanzania
Figure 14: % Share of GDP

% Share of GDP in 2022 GDP

USD 75.73 billion in 2022
Other 17.3%
Agriculture
Current Account Balance % of GDP
24.3%
-5.6 in 2022
POPULATION
65 million in 2022
Services Population ages 15-64 (% of total)
30.7%
54
Industry
27.7% Inflation, Consumer Price (annual %)
4.4 in 2022 from 3.7 in 2021

Source: World Bank Open Data Source: World Bank; IMF Datamapper

37
https://www.afdb.org/en/countries-southern-africa-angola/angola-bank-intervention-strategy

39
Tanzania's annual average GDP grew by 5.9 percent Indian industry. Tanzania offers vast arable land with
between 2016 and 2020, surpassing East Africa’s favourable climate condition for farming. Tanzania
average of 4.2 percent38. Although Tanzania’s GDP also seeks to increase production to meet its unmet
growth rate fell to 2% in 2020 due to the COVID-19 sugar demand. Aim is to increase average production
pandemic, it has shown resilience and bounced back of 460,048 tonnes in 2022-23 to 706,000 tonnes
to 5.2% in 2023. sugar by 2025-26.

This growth has been primarily supported by the Tanzania’s rich natural resources provides investors
services sector, especially tourism, financial and opportunities in exploration, mining operations, and
insurance services, transport and storage, and trade mineral processing. Tanzania has also graduated to
and repair subsectors. Agriculture remains one of the lower middle-income country recently. The journey
most critical sectors in Tanzania, providing ahead would require investments in road, highways,
employment to the majority of the working population. ports, railways. Indian companies could invest in
Key food crops produced by Tanzanian farmers include connectivity and infrastructure projects in Tanzania.
maize, wheat, rice, sweet potatoes, bananas, beans, Tourism, skill development, IT/ITeS are some of the
sorghum, and sugar cane, while the country's cash other areas which could provide investment
crops include coffee, cotton, cashew nuts, tobacco, opportunity in Tanzania.
tea, and sisal. In addition to its agricultural prowess,
Tanzania is rich in minerals, arable land, and wildlife, Tanzania's vast arable land, ideal climate, and recent
which form the backbone of its economic strength. economic growth present a wealth of investment
opportunities for Indian companies. From establishing
Tanzania and India share close, friendly ties, with a food processing plants to meet Tanzania's rising
significant Indian community residing in Tanzania. sugar demand, to capitalizing on the abundance of
As of October 2023, there are around 40,000 people natural resources for exploration and mining, Indian
of Indian origin and approximately 15,000-20,000 expertise can flourish.
Indian nationals living in the country39.
Furthermore, Tanzania's infrastructure needs in roads,
India is Tanzania's largest export destination and the railways, and ports create an entry point for Indian
second-largest source of imports. Tanzania imports investment in connectivity projects, while tourism,
goods such as mineral fuels, medicaments, skill development, and IT/ITES sectors offer
motorcycles, cane or beet sugar, and semi-finished additional avenues for mutually beneficial
products of iron from India. In return, Tanzania’s top partnerships.
exports to India include cashew nuts, gold, pulses,
and gemstones. The mutually beneficial relationship between
Tanzania and India can be further strengthened
India's outward FDI to Tanzania stood at USD 149 through strategic investments and partnerships.
million from April 2000 to May 2024, with major Indian companies, with their expertise and resources,
Indian companies operating in Tanzania can contribute significantly to Tanzania's
manufacturing tractors and farm equipment, buses, development in agriculture, infrastructure, and various
and automobiles. Indian industries are active in other sectors.
sectors like infrastructure, steel, mining, sugar
production, power transmission, and insurance. As Tanzania continues on its growth trajectory, these
investments will not only support the country's
Given the agrarian nature of the country, food economic advancement but also solidify the
processing provides lucrative investment prospect for long-standing ties between the two nations.

38
https://www.afdb.org/sites/default/files/documents/projects-and-operations/tanzania_-_anchoring_development_on_better_infrastructure_-_country_diagnostic_note_2021.pdf
39
https://www.mea.gov.in/Portal/ForeignRelation/Tanzania-02-11-2023.pdf

40
 Pathways for Shared Progress: India-Africa Economic Cooperation

Côte d’Ivoire (Ivory Coast)

Figure 15: % Share of GDP

% Share of GDP GDP

USD 70.02 billion in 2022
Agriculture
Current Account Balance % of GDP
20.6%
-7.7 in 2022
POPULATION
28 million in 2022
Services
55.1% Population ages 15-64 (% of total)
Industry 56.1
24.3%

Source: Côte D’ivoire Country Brief 2024; African Export-Import Bank Source: World Bank; IMF Datamapper

Ivory Coast's economy is one of the fastest growing India is one of Ivory Coast's top three import partners,
in Sub-Saharan Africa, with projected GDP growth importing cereals, vehicles, pharmaceutical products,
rates of 7.2% in 2023 and 7.0% in 202440, reaching and mineral fuels from India, while exporting edible
an estimated GDP of USD 79 billion in 202341. This fruits, rubber, and wooden articles to India.
growth is driven by political stability and the
implementation of the National Development Plan Ivory Coast boasts a strategic location along the
(NDP) from 2012-2015 and 2016-2020, which West African coast, fuelling its robust economic
boosted public and private investments, domestic growth driven by agriculture and mining. It is the
consumption, and the services sector. world's leading cocoa producer and a significant
exporter of coffee, palm oil, and cashews, bolstered
Total trade rose to USD 59.8 billion in 2023, up from by improved political stability.
USD 52.8 billion in 2022. The political landscape has
been stable since the 2020 presidential election, with Opportunities for economic diversification, regional
the next election scheduled for October 2025. trade integration, renewable energy development, and
tourism expansion are promising.

40
African Development Bank Group: https://www.afdb.org/en/countries/west-africa/cote-d%E2%80%99ivoire/cote-divoire-economic-outlook
41
Côte D’ivoire Country Brief 2024: https://media.afreximbank.com/afrexim/Coted-Ivoire-Country-Brief-2024-1.pdf

41
Democratic Republic of the Congo
Figure 16: % Share of GDP

% Share of GDP in 2022 GDP

USD 64.72 billion in 2022
Others 12% Agriculture 4%
Current Account Balance % of GDP
Industry -6.3 in 2023
18%
Population
99 million in 2022
Population ages 15-64 (% of total)
51
Inflation, Consumer Price (annual %)
19.9% in 2023 from 9.3% in 2022
Services 66%

Source: World Bank Source: World Bank

The Democratic Republic of Congo (DRC), about the Growth was also supported by exports (up 17.3%)
size of Western Europe, is the largest country in and investment (up 9.2%)43.
Sub-Saharan Africa (SSA) and an LDC. DRC is
endowed with exceptional natural resources, including During 2023-24, exports from India to DRC were
minerals such as cobalt and copper, hydropower USD 580.69 million. India’s imports from DRC during
potential, significant arable land, immense the same period were USD 209.44 million44. The top
biodiversity, and the world’s second-largest rainforest. commodities exported by India are pharmaceutical
products, automobiles, machinery & mechanical
The DRC’s economy is largely dependent on the appliances, cereals and electrical machinery
price of commodities, particularly copper, cobalt, tin, &equipment. The top imports on the other hand were
tungsten, and tantalum. Most of the country’s mineral of mineral fuels, cocoa and cocoa preparations,
resources remain untapped and are estimated to be aluminium and articles, electrical machinery &
worth USD 24 trillion. equipment, iron & steel and copper & articles.

The economic growth rate was robust at 7.5% in From India, during FY 2001 to 2022, DRC received
2023, due to lower performance in extractive FDI accruing to USD 23 million. The top sectors for
industries42. Growth in non-extractive sectors rose investments have been building materials,
from 3.1% in 2022 to 3.6% in 2023, driven by communications, minerals, real estate and software
agriculture (up 0.45%), construction and public works and IT services with the leading companies being
(up 0.57%), and transport and telecommunications Bharti Airtel, TATA Motors, and Mahindra.
(up 0.61%).

42
https://www.trade.gov/country-commercial-guides/democratic-republic-congo-market-overview
43
African Development Bank Group:https://www.afdb.org/sites/default/files/2024/06/06/aeo_2024_-_country_notes.pdf
44
Department of Commerce: https://tradestat.commerce.gov.in/eidb/iecntq.asp

42
 Pathways for Shared Progress: India-Africa Economic Cooperation

Investment opportunities are present for Indian The DRC is Africa’s largest producer of copper and
businesses in the agriculture and mining sectors. the world’s largest producer of cobalt, a strategic
With nearly 90% of its arable land unused, the DRC metal used in battery production. This could be of
is promoting the establishment of agro-industrial high interest to Indian companies looking at moving
parks, which can provide opportunities for Indian towards EVs.
companies to invest in value addition of items like
palm oil, rubber, cocoa, coffee, and more. Notably, Furthermore, the DRC has great hydroelectric
maize, cassava, rice and soybeans along with potential that can be leveraged for long-term
fishing have been identified as high-potential sectors investments. Energy is another focus sector where
by the DRC. the DRC is looking to attract investments.

Uganda
Figure 17: % Share of GDP

% Share of GDP in 2022 GDP

USD 45.57 billion in 2022
Others 7% Agriculture 24%
Current Account Balance % of GDP
-8.4 in 2022
Services Population
42% 47 million in 2022
Inflation, Consumer Price (annual %)
5.5 in 2023 from 7.2 in 2022

Industry 27%

Source: Uganda Bureau of Statistics Source: World Bank

A landlocked country located at the crossroads of East receives USD 2 billion annually from development
and Central Africa, Uganda is endowed with abundant partners, with most of it directed to social sectors.
agricultural, land, and mineral resources that form the
backbone of its economy. Uganda’s economy Uganda’s exports surged with increased volumes of
expanded 4.6% in 2023, lower than the 6.3% production and improvement in terms of trade,
registered in 2022. Despite strong performance in resumption of gold trade, and recovery of tourism.
mining, construction, and hospitality, lower Imports grew stronger supported by demand from
manufacturing output and contractions in food investments into the country’s oil development
production and public administration led to the program, hence weakening the current account.
slowdown.
Exports from India to Uganda during 2023-24 were
Agriculture’s contribution to GDP has declined from USD 508.14 million. India’s imports from Uganda during
53% in 1990 to 24% in 2022. Manufactured exports the same period were USD 880.83 million45. Uganda is
constituted 13% of total exports in 2022. Uganda a beneficiary of Duty Free Tariff Preference (DFTP)
Scheme of India for Least Developed Countries.
45
Ministry of Commerce: https://tradestat.commerce.gov.in/eidb/iecnt.asp

43
Major items of Indian exports to Uganda include From April 2000 to March 2023, India’s FDI inflow
pharmaceutical products, vehicles, plastic, paper and from Uganda amounted to USD 10.2 million46 which
paperboard, organic chemicals. Major commodities of is 0.002% of share in India's Total FDI Inflows from
imports from Uganda to India are edible vegetables Africa. From April 2010 – March 2020, Uganda
and certain roots and tubers, coffee, tea, mate and attracted notable Indian investments in several
spices, wood and articles of wood, wood charcoal, sectors: Agriculture, forestry, fishing, and mining
cotton, essential oils, and cocoa and cocoa (0.2%), Wholesale, retail trade, restaurants, and
preparation. hotels (0.5%), construction (0.1%), Community,
social and personal services (0.2%)47.
Regular engagement between the private sectors in
India and Uganda has deepened the involvement of The potential sectors of interest and agriculture,
Indian businesses in Uganda. A Double Taxation agro-processing, agri-tech, ICT, healthcare,
Avoidance Agreement between India and Uganda is automotive, solar energy, education, and
in effect since 2004. infrastructure.

Senegal
Figure 18: % Share of GDP

% Share of GDP in 2022 GDP

USD 27.68 billion in 2022
Others 10.01%
Current Account Balance % of GDP
Services
49.96%
-19.9 in 2022
Agriculture POPULATION
15.49%
17 million in 2022
Population ages 15-64 (% of total)
55
Inflation, Consumer Price (annual %)
9.7 in 2022 from 2.2 in 2021
Industry 24.54%

Source: World Bank Open Data Source: World Bank; IMF Datamapper

Senegal, a Western African country classified as a Community of West African States (ECOWAS) against
lower middle-income nation, is one of the Mali, Senegal's leading customer for exports.
fastest-growing countries in Africa. Despite its Nevertheless, the Senegalese economy is expected to
impressive growth trajectory, Senegal's real GDP rebound, with a projected growth rate of 7.1% in 2024.
growth dropped to 4.0% in 2022 from 6.5% in 2021.
This decline can be attributed to several factors, Inflation in Senegal reached a record high of 9.7% in
including geopolitical tensions, a slowdown in the 2022, driven primarily by soaring food prices.
secondary sector, an unfavourable agricultural However, it has since declined to 5.9%, indicating a
season, and sanctions imposed by the Economic stabilization in the economy.

46
Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Government of India
47
RBI; and India Exim Bank Analysis

44
 Pathways for Shared Progress: India-Africa Economic Cooperation

India shares close economic and developmental India's export basket to Senegal includes a wide
relations with Senegal. Over the years, India has range of products such as cereals, meat,
extended several lines of credit to Senegal for automobiles, and more. Conversely, India imports
projects in agriculture and irrigation, transport, rural critical raw materials from Senegal, including
electrification, fisheries, women’s poverty alleviation, phosphoric acid and raw cashews.
IT training and equipment, medical infrastructure, and
railways. Indian investments in Senegal span several sectors,
including construction, tourism, retail, trading,
Bilateral trade between India and Senegal showed a phosphates, and pharmaceuticals.
rising trend before 2023-24, increasing from USD 946
million in 2019-20 to USD 2.51 billion in 2022-23. The country's relationship with India, marked by
However, trade fell to USD 1.57 billion in 2023. In significant trade and developmental cooperation, is a
2022-23, India exported goods worth USD 938.57 vital component of its economic strategy. As both
million to Senegal and imported goods worth USD nations continue to collaborate, their partnership is
633.92 million, showing declines of 17.25% and expected to yield mutual benefits and contribute to
53.98%, respectively. their respective economic advancements.

Mozambique
Figure 19: % Share of GDP

% Share of GDP in 2022 GDP

USD 18.41 billion in 2022
Other 9.92%
Current Account Balance % of GDP
Services
40.56%
-34.7 in 2022
Agriculture POPULATION
26.73%
33 million in 2022
Population ages 15-64 (% of total)
54
Inflation, Consumer Price (annual %)
10.3 in 2022 from 6.4 in 2021
Industry 22.79%

Source: World Bank Open Data Source: World Bank Open Data & IMF Datamapper

Mozambique is strategically located, sharing borders Mozambique's real GDP grew from 2.4% in 2021 to
with Tanzania, Malawi, Zambia, Zimbabwe, South 4.4% in 2022, with an estimated increase to 6% in
Africa, and Eswatini, four of which are landlocked 202348. This growth marks a consolidation of
countries. This geographic positioning makes recovery from recent shocks such as the COVID-19
Mozambique a potential gateway to several neighboring pandemic and other geopolitical events. The growth
nations. The country boasts abundant arable land, a has been mainly driven by the extractive sector,
reliable water supply, substantial energy resources, rich particularly the start of Liquified Natural Gas (LNG)
mineral deposits, and significant natural gas reserves, production at the Coral South offshore facility, along
constituting the foundation of its natural resource with the service sector on the supply side and private
strength. consumption on the demand side.
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https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD/MOZ

45
Inflation, which was higher in 2022 due to increases Indian industry can leverage its expertise through
in fuel and food prices, has been reduced to 7.1% in targeted investments in key sectors to enhance
2023, owing to a tighter monetary policy. cooperation between the two countries. In agriculture,
Mozambique's import volume fell from USD 14.51 India can invest in and supply farm mechanization
billion in 2022 to USD 10.09 billion in 2023, which equipment, tractors, farm trucks, and harvesting
has significantly improved the current account deficit machinery to modernize farming practices and
from 34.2% of GDP in 2022 to an estimated 11.1% in improve productivity.
202349.
The construction and infrastructure sector offers vast
India and Mozambique share close economic and opportunities for building roads, railways, and water
trade linkages. India is the 4th largest source country management systems, essential for Mozambique's
for goods imported by Mozambique and largest development. The energy sector, especially
overall in terms of exported goods from Mozambique. renewable sources like solar and wind, is another
It is also India’s fifth-largest trade partner in Africa. critical area where Indian expertise can help
Mozambique diversify its energy portfolio and achieve
In 2023-24, India exported USD 1.99 billion worth of sustainable growth.
commodities to Mozambique and imported USD 2.42
billion. India’s exports to Mozambique include fuel, Indian expertise in Fast Moving Consumer Goods
medicine, cereals, bicycles, and books, while imports (FMCG) can cater to the growing consumer market in
from Mozambique consist of coal, LNG, legumes, Mozambique. Investments in healthcare can enhance
copper, and cashew nuts. medical facilities, provide affordable healthcare
solutions, and address critical health issues in
Indian companies have made substantial investments Mozambique. Opportunities for exploration, extraction,
in Mozambique, particularly in natural gas, coal and value addition in coal and LNG present lucrative
mining, consumer products, commercial agriculture, prospects for Indian companies.
and automobiles. These investments constitute
These strategic investments can further foster strong
nearly a quarter of India’s total foreign direct
bilateral ties and mutual growth.
investments (FDIs) in Africa, with a significant focus
on natural gas and coal.

49
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46
 Pathways for Shared Progress: India-Africa Economic Cooperation

Mauritius
Figure 20: % Share of GDP

% Share of GDP in 2022 GDP

USD 12.95 billion in 2022
Others 12% Agriculture 4%
Current Account Balance % of GDP
Industry - 5.1 in 2023
18%
Population
1 million in 2022
Inflation, Consumer Price (annual %)
10.8% in 2022 to 7.0% in 2023

Services 66%

Source: World Bank Source: World Bank

Real GDP growth remained robust at 7% in 2023, Petroleum products have been the largest export item
from 8.9% in 202250. Growth was driven by services for India between 2007 to 2019 until MRPL supply
(construction and tourism) on the supply side and by contract was terminated in mid-2019. Other Indian
consumption and investment on the demand side. exports to Mauritius include pharmaceuticals, cereals,
cotton, shrimps, prawns and bovine meat. Main
Mauritius is a beacon of economic success in imports are vanilla, medical devices, needles,
Sub-Saharan middle-income country with a per capita aluminium alloys, scrap paper, refined copper, men's
income surpassing USD 10,00051. This remarkable cotton shirts, etc.
transformation was rooted in a stable democracy and
a relatively diversified economy that now includes Cumulative FDI worth USD 161 billion came from
tourism, manufacturing, fisheries, ICT, and financial Mauritius to India in the two decades from 2000 -
services, the latter contributing 40% of GDP. 2022 (26% of total FDI inflows into India), largely due
to the Double Taxation Avoidance Convention (DTAC).
Since 2005, India has been among the largest Mauritius is India’s third largest source of FDI.
trading partners of Mauritius. For FY 2023-2024,
Indian exports to Mauritius was USD 778.03 million, In Mauritius, Indian companies have invested over
while Mauritian exports to India stood at USD 73.10 USD 200 million in the last five years. Mauritius
million and total trade came in at USD 851.13 accounted for 72.9% of India’s investments in Africa
million52. due to its status as a low-tax jurisdiction during April

50
African Development Bank Group:https://www.afdb.org/sites/default/files/2024/06/06/aeo_2024_-_country_notes.pdf
51
World Bank: https://www.worldbank.org/en/country/mauritius/overview
52
Ministry of Commerce: https://tradestat.commerce.gov.in/eidb/iecnt.asp

47
2010 – March 2023, in sectors like manufacturing, forestry, fishing, and mining (6.8%), Transport,
financial, insurance and business services and storage, and communication services (99.8%),
transport, storage and communication services, Wholesale, retail trade, restaurants, and hotels
among others. With the given data, it is not possible (97.7%), construction (97.6%), Community, social
to disaggregate the FDI data to know the volume of and personal services (97.5), Electricity, gas, and
Indian FDI outflows that are routed through Mauritius water (44.4%), and miscellaneous (85.4%)53.
to other countries.
The potential sectors of interest can be identified as
From April 2010 – March 2020, Mauritius attracted agriculture, agro-processing, agri-tech, ICT,
notable Indian investments in several sectors: healthcare, automotive, solar energy, education, and
Manufacturing (93%), Financial, insurance, real infrastructure.
estate, and business services (97%), Agriculture,

53
RBI; and India Exim Bank Analysis

48
Sectors of
Cooperation
 African countries are keen to develop local agricultural
capacity to feed their population. India already
exports cereals and sugar in significant quantities to
Africa and can invest in cultivation in Africa.

Potential Areas of Collaboration

Constraints in Africa’s agricultural sector such as low
agricultural productivity56, lack of farmer education
initiatives, and lack of access to inputs in areas such
as water, fertilisers, and farm mechanisation reflect
various collaboration opportunities between India
and Africa. Indian Industry can augment Africa’s
farm mechanisation capacities by collaborating with
the agro-processing firms in Africa by providing
tractors, equipment such as plows and harrows
along with irrigation techniques such as sprinkler

Agriculture and
and drip irrigation.

Further, extreme weather conditions impact the

Food Security agriculture sector leading to severe storms and

droughts in the sector. Indian and African industry
can cooperate in research and development to
Overview develop mitigation measures such as developing
early warning systems and utilising renewable forms
India holds the second place globally in terms of
of energy to promote sustainable farming practices.
production of fruits, vegetables, tea, farmed fish,
Further, organising training programmes for farmers
sugarcane, wheat, rice, cotton, and sugar. India’s
on sustainable practices can further develop Africa's
improved performance is evident in its increase in
agricultural sector.
agri-exports, which reached USD 53 billion in FY23,
surpassing previous records. Cooperation in technology can also act as a key
driver in Africa’s rise to become a global
Nominal GDP of Sub-Saharan Africa amounts to
food-provider. To maximise agricultural production in
USD 2.03 trillion54 of which the agriculture, forestry,
Africa, some possible technological interventions
and fishing sectors contribute almost USD 350.11
which can be adapted from India include seed
billion, which implies that almost 17% of the GDP of
technology, zero-till agriculture, and precision
Sub-Saharan Africa depends on the agriculture
farming. Collaborative research initiatives can focus
sector. However, the potential of the agricultural
on developing drought-resistant and high-yield crop
sector is substantial as it could potentially produce
varieties, pest control methods, and others.
two to three times more agricultural output,55
contributing significantly to the global food
production and domestic and global food security. Increase in agri-exports, which
reached
USD 53 billion in FY23

54
https://data.worldbank.org/indicator/NY.GDP.MKTP.CD
55
https://www.mckinsey.com/~/media/McKinsey/Industries/Agriculture/Our%20Insights/Winning%20in%20Africas%20agricultural%20market/Winning-in-Africas-
agricultural-market.pdf
56
https://www.fao.org/science-technology-and-innovation/increasing-agricultural-productivity-in-africa-can-sti-help-africa-to-make-a-quantum-
leap-in-agricultural-productivity/en#:~:text=The%20productivity%20of%20Africa's%20agriculture,than%20half%20the%20global%20average.

50
 Pathways for Shared Progress: India-Africa Economic Cooperation

To raise africultural productivity and strengthen • India has been cooperating with African nations
Africa’s value chains, promoting agricultural on leveraging India’s digital public infrastructure
diversification and enhancing the food processing to ensure availability of adequate finance to
sector are critical. Indian Government has also African farmers57. An established digital
collaborated with Africa to promote agri-business by payment ecosystem in Africa will lead to lower
launching Vocational Training Institutes, Soil Testing transaction costs and ensure affordable access
and Soil Health Card, among others. to capital for farmers.

Food-processing • India and Africa can together work on

strengthening the agriculture infrastructure of the
Almost 60% of farmers in Sub-Saharan Africa are region and collaborate on disaster management
small farmers with a plot size that is less than 1 and climate change solutions.
hectare. Establishing the food processing sector,
while bringing small firms under the financial • India’s ICRISAT has been working on technologies
ecosystem in Africa, will help raise farmer incomes for African agricultural transformation and phase II
by improving access to finance. is underway with AfDB support. It is also working
on strengthening seed systems through farmer
Further, training food processing units will ensure research networks in West Africa. Such ventures
that they adhere to quality standards for both local should be expanded.
and international markets. India and Africa can help
• Africa’s food sector is one of its largest industries
forge partnerships to promote Africa’s food
and can gain from cooperation with India in terms
processing sector for local consumers and establish
of machinery, inputs and skills. Indian industry can
the brand value of Africa in the global market.
consider exploring the governmental initiatives in
African countries for food processing as food
security is vital to Africa.
Recommendations
• Farm mechanisation is required by Africa. While
several Indian tractor companies are selling Africa,
smaller farm machinery can also be exported.
• Focusing on enhancing the agricultural startup
ecosystem of Africa can help both sides address
common challenges. An agri startup hackathon can
be planned at regular intervals.

• Indian industry can invest in skill development of

rural small and medium enterprises in Africa’s
agri-business industry.

• India can cooperate with Africa on seeds including

hybrid seeds to expand access to high-yield seeds
under High Yield, Resilient and Adaptive practices
(HYRAP). India can work with local programs such
as Program for Africa’s Seed Systems and African
Seed Investment Fund.

57
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51
 While there are about 500 fintech companies in
Nigeria, South Africa, Kenya, and Tanzania, the
other 50 countries in the African region have limited
digital and physical infrastructure.

India’s Digital Public Infrastructure (DPI) ecosystem

has brought huge gains in areas such as fintech and
financial inclusion, citizen identification, delivery of
public benefits, and provision of government
services. Applications such as DigiLocker for
document storage, Co-WIN for vaccination, Jan
Dhan Yojana, Shram portal for employees, among
others, have made lives of citizens easier.

African countries can leapfrog by using India’s DPI.

India has expressed its willingness to share DPI
tools free of cost with Africa and support skill
development. There are many examples of DPI

Digital Public being used in Africa, for example, the 50-in-5

initiative shares learnings and best practices,

Infrastructure
Uganda’s NBI/EGI project, Ghana’s e-transform and
digital governance plans in Kenya.

Overview Potential Areas of Collaboration

As a result of significant investment in digital
India’s fintech ecosystem includes payment
infrastructure by the Government of India, the Indian
gateways, UPI, QR-based payment system, digital
fintech and telecommunications markets have
wallets, digital customer lending, and bite-sized
expanded exponentially. India’s telecom industry is
insurance products, among others. India can help
the 2nd largest in the world with a subscriber base
Africa in setting up an adequate digital infrastructure
of 1.09 billion (April 2024)58. The fintech market size
to facilitate smooth transfer of funds within and
in India is significant as well with the number of
outside Africa.
digital transactions in FY 2023-24 exceeding 116
billion. It is estimated to reach USD 1.5 trillion in Indian telecom companies can further establish
202559. themselves in Africa with a special focus on rural
areas to enhance connectivity and communication.
Africa, on the other hand, expanded by 3.2%60 in
Indian companies already have a footprint in Africa
2023 with its fintech and telecom markets yet to
with one company being the second largest telecom
realise their full potential. The fintech market size of
operator with over 143 million active subscribers63.
Africa is estimated to reach USD 6561 billion by
2030, which reflects immense potential and
collaboration opportunities between India and Africa. India's fintech market size is
The tele-density of Sub-Saharan Africa remains estimated to reach
approximately close to 1 per 200 inhabitants62.
USD 1.5 trillion in 2025

58
https://www.investindia.gov.in/sector/telecom
59
https://www.investindia.gov.in/sector/bfsi-FinTech-financial-services#:~:text=India%20is%20amongst%20the%20fastest,~%241.5%20Tn%20by%202025.&text=
The%20Payments%20landscape%20in%20India,terms%20of%20revenue%20by%202030.
60
https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/DZA?zoom=DZA&highlight=DZA
61
https://web-assets.bcg.com/69/51/f9ce8b47419fb0bb9aeb50a77ee6/bcg-qed-global-fintech-report-2023-reimagining-the-future-of-finance-may-2023.pdf
62
https://www.fao.org/4/x0295e/x0295e11.htm
63
https://airtel.africa/assets/pdf/H1-2023/Airtel-Africa-plc_Factsheet_1Aug2023.pdf

52
 Pathways for Shared Progress: India-Africa Economic Cooperation

Therefore, there is precedent for Indian

telecommunications companies to continue to
Recommendations
expand into African markets and set up adequate 5G • Africa’s digital prowess has yet to reach its true
infrastructure, especially in Sub-Saharan Africa, to potential and initiatives such as the Pan African
improve telecommunications infrastructure in Africa. e-Network Project (PAeNP) are steps in the right
direction. Indian industry with support from the
Given that internet is the most important component Government should pursue similar projects to
for ensuring digital inclusion in an economy, ensure deeper internet connectivity throughout the
undersea submarine cables in and around Africa African region.
can provide exclusive internet facilities to African
• The potential of the IT sector in Africa is huge and
citizens. The Asia Africa Europe-1 (AAE-1), a the focus should be on producing enough IT
25,000 km submarine cable, was launched in July professionals in Africa with support from India’s
2017and the 2Africa project, one of the largest ed-tech industry. Indian industry can also offer
subsea projects globally connects India, Africa and support to the African industry in transitioning from
other countries. India and Africa can increase the labor-intensive technology to artificial intelligence
number of undersea cables to improve and robotics to raise productivity and facilitate
diversification and mitigate risks of dependence on ease of doing business.
limited cable lines. • Robust regulatory reforms, led by dedicated
ministries, will create a conducive environment for
Connectivity in the form of enhanced 4G/5G increased FDI inflows into Africa's digital
cooperation, smooth access to finance, and better infrastructure, leading to improved financial
internet connectivity can augment the digital inclusion and greater access to capital for
infrastructure capabilities of Africa. businesses and individuals alike.

53
 As per the (SDG) Sustainable Development Goals
Industry Index, the top ranking countries included
Egypt, Morocco and Tunisia, with Cote d’Ivoire and
Senegal among the most improved economies
between 2015 and 2021.

The manufacturing sector of India contributes

around 16% to India’s GDP and employs almost
11% of total employment with the sector poised to
reach USD 1 trillion by FY 2025-26.

India aims to provide technologies and know-how

that is appropriate, adaptable and affordable for
African countries. Building local capacities is the
objective, to ensure that the manufacturing
relationship with Africa is supportive and based on
Africa’s needs.

Manufacturing Potential Areas of Collaboration

Textiles and apparel
Overview India exports a large amount of cotton to Africa with
Africa's manufacturing sector is evolving, and the exports in 2023-24 amounting to USD 932.12
sector contributes approximately 10% to the million. However, India’s textile exports to the world
economy of Africa while contributing 7.4% of include jute, raw wool, woollen yarn, handicrafts, and
employment. The manufacturing sector's contribution silk, among others65 and India can provide incentives
to GDP and employment reflects immense potential for domestic producers of such products to further
for India and Africa to expand cooperation in the develop the textile markets in Africa. This will not
various sub-sectors of manufacturing. only lead to exchange of technologies between India
and Africa but will also enhance Africa’s textiles
The largest manufacturing sector in terms of value
manufacturing capabilities.
added include food products, other non-metallic
mineral products and beverages. Promising While Africa has a rich history of colourful textiles
industries include vehicles and electrical equipment, and apparel, it is important to engage with small
which were the fastest growing in 2021. Other manufacturers. Countries like Ethiopia, South Africa,
sectors which grew well included garments, furniture Mauritius and others have developed successful
and fabricated metals. apparel industries. Ghana and other countries are
working on more environmentally friendly and
There is significant diversity in manufacturing across
sustainable manufacturing with waste management
African economies, with the more competitive
and air quality improvement.
industrial economies being South Africa, Morocco,
Egypt, Tunisia, Botswana and Eswatini. These
economies consistently achieved high ranks in the India exports a large amount of
Competitive Industrial Performance Index over the cotton to Africa with exports in
last 10 years64. 2023-24 amounting to
USD 932.12 million

64
https://www.unido.org/sites/default/files/unido-publications/2023-12/documents_Yearbook_2023_UNIDO_IndustrialStatistics_Yearbook_2023_Africa.pdf
65
Ministry of Commerce and Industry, Government of India

54
 Pathways for Shared Progress: India-Africa Economic Cooperation

African countries have instituted policies to drive the Indian companies have a strong presence in African
growth of textile and manufacturing sectors including countries, including manufacturing and services.
the establishment of industrial zones and parks.
They also offer lower costs of energy, labour supply • Electric vehicles: African companies have
and land. expanded production of electric vehicles as
2-wheelers, 3-wheelers and 4-wheelers have
India can undertake efforts to develop the entire value witnessed increasing demand across the
chain in Africa, ranging from sharing expertise in continent. Cooperation in EVs between India and
cotton cultivation to spinning and yarn, to weaving Africa is a two-way exchange as India would be
and knitting as well as design and fabrication. Taking keen to source Africa's essential raw materials for
a regional production network approach, Indian batteries and manufacturing.
industry can explore synergies between cotton-
producing countries and upstream value chains. Nigeria was the largest market in Africa for EVs in
2021. While Africa’s EV revenues were estimated
Electronics at less than USD 100 million, EV and battery
In today’s modernized world, the semiconductor manufacturing and related services can be areas
industry holds great importance for the electronics of cooperation. India can begin by exporting
industry in the world and Africa (Kenya, Nigeria, relatively low-cost EVs to African countries and as
Rwanda and Ghana) exports critical minerals that per African road conditions. African governments
can be intensively utilized in the production of such like South Africa also offer incentives for local
technologies. The two sides can collaborate to manufacturers.
enhance the potential of Africa in the semiconductor
Critical minerals like lithium drive the energy
industry by utilizing India’s manufacturing
transition, as they are essential for clean energy
capabilities and leveraging the natural resource
technologies, including wind and electric vehicles.
stock of Africa.
India relies on imports for its critical mineral
Further, India should establish manufacturing units in supply, hence providing further opportunities of
Africa to promote Indian brands in African markets. collaboration with Africa, as lithium production
India can also aid Africa in setting up a customer from Africa is projected to almost triple in 2024
support ecosystem for repair and maintenance, compared to the previous year.
offering infrastructure financing options for African
manufacturing firms, and supporting and developing • Automobile Manufacturing: Indian automobile
electronics manufacturing in Africa. companies are increasingly investing in setting up
of local assembly and manufacturing units across
Automotives Africa, moving up from being exporters. Indian
companies have invested in training mechanics in
In 2024, the African automotive market size was
repairs and maintenance and also provided
estimated at USD 20.5 billion, which is expected to
customer assistance, while building distributor
reach USD 26.30 billion by 2029, growing at a
networks in the continent. India is also shipping
CAGR of 5.1%. With an aim to produce its first EV
ready to assemble products.
by 2026, South Africa launched its policy for
electrification of transport under the Just Energy
Such efforts have enabled Indian companies to
Transition (JET) plan, with an estimated investment
take the lead in 2-wheelers. This model can be
of USD 6.84 billion from 2023 to 2027 to support
replicated in auto components manufacturing as
decarbonisation commitments.
well. This will ensure domestic manufacturing,
Over the years, India and Africa have enhanced affordability and sustainability of vehicles for
their cooperation in the automobile sector. Many terrains suited to Africa.

55
Chemicals and Petrochemicals

In Africa, the petrochemical industry has significant enabling the establishment of chemical and
potential for growth and is a key player in the petrochemical plants, which in turn help in
continent’s economic development. Countries like reducing costs, improving supply chain efficiency,
Nigeria, Angola and Algeria have been major and creating local employment opportunities.
producers of crude oil for many years and have
recently been investing in the development of their • Digitalisation: To address the challenge that is
petrochemical industries. faced by increase in global demand while keeping
environmental impact at a minimum, there is a
Lack of infrastructure and poor transportation need for sustainable transition driven by
network causes hurdles while transporting raw greentech and digitalisation. The sector can
materials and finished products. It is important for enhance environmental performance and achieve
companies in the industry to invest in technologies long-term economic viability by adopting these
that reduce emissions and improve environmental innovative approaches. Digital technologies such
performance, to address environmental concerns as AI, IoT, and advanced analytics facilitate
associated with the petrochemical industry. real-time monitoring, data-driven decision-making,
and automation, leading to improved operational
By recognising the potential for mutual benefits and efficiency and reduced resource consumption.
economic growth, India and Africa have been
strengthening their collaboration in the chemical and • Sustainable Development: Greentech plays a
petrochemical sector. crucial role in reducing greenhouse gas
emissions, minimising waste generation, and
• Manufacturing Facilities: Focus on conserving resources, and providing alternative
value-addition forms a key factor driving the feedstock in the petrochemical and chemical
growth of the petrochemical industry in Africa. sector. India’s Greentech solutions will enable
Many African countries are investing in African industries to adopt various sustainable
developing petrochemical plants, which provides alternatives which would include biomass,
a plethora of opportunities to Indian firms. bio-based feedstocks, and carbon capture
Investments by Indian companies are amongst others.

56
 Pathways for Shared Progress: India-Africa Economic Cooperation

Potential Areas of Collaboration

India has already made strides in partnering with
African educational institutions. The Indian Institute
of Technology – Madras (IIT-M) established its first
international campus on the island of Zanzibar,
Tanzania offering B.Tech and M.Tech degrees in
fields such as Data Science and AI68 and has
commenced operationalization with 45 students
joining in October 2023. The establishment of an
overseas campus not only diversifies the learning
experience of Indian students and familiarises them
with the African continent, it also provides
opportunities for African students to receive
education and training in emerging and integral
sectors to Industry 5.0 like Data Science and AI.

Indian businesses have also invested significantly

Skill Development on the African continent and into educating and
upskilling the African workforce that they have
employed on the continent. Specifically, businesses
Overview have invested in fields including agriculture,
Africa is at the cusp of a population boom with the pharmaceuticals, energy, and information and
continent’s population projected to grow from 1.4 communication technology (ICT). These skilling
billion people to over 2.5 billion people by 205066. initiatives range from workshops to training
Furthermore, Africa, like India, has a predominantly programs, and partnerships with local African
young population with nearly 60% of it’s people primary, secondary, and tertiary educational
under 25 years of age. institutes. These initiatives in turn enhance
employability and help in closing skill gaps of
However, while Africa has a significant demographic African youth while preparing them for roles within
dividend, lack of education and training programmes Indian organisations.
pose significant challenges. It is estimated that 20%
of primary school aged children and 58% of middle Additionally, through Corporate Social Responsibility
school aged children are out of school, with (CSR) initiatives, areas like community
landlocked countries in Central Africa having the development, education, and technological transfer
highest numbers of children out of school67. are in focus, which improve living standards and
familiarisation of technologies and new skillsets.
To reap the benefits of its demographic dividend,
Africa will have to invest significantly into primary,
secondary, and tertiary education and skilling
programs to train and equip young Africans with
requisite skills for employment and boosting Africa, like India, has a
all-round development. Therefore, India could be a predominantly young
potential partner and resource that African countries, population with nearly 60% of
companies, and citizens could rely upon for support it’s people under
in upskilling the population.
25 years of age.

66
https://www.imf.org/en/Publications/fandd/issues/2023/09/PT-african-century#:~:text=Fueled%20by%20a%20combination%20of,reach%20close%20to%202.5%20billion.
67
https://www.orfonline.org/expert-speak/india-africa-education-partnership-holds-the-key-to-a-prosperous-future#:~:text=Education%20and%20capacity%20
building%20has,in%20the%20school%20education%20system.
68
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57
Finally, joint ventures between Indian companies • India should partner with African primary,
and African companies can facilitate technology secondary, and tertiary educational institutions to
transfer to the African continent and improve cross improve awareness on opportunities for youth
cultural knowledge and skill transfer between Indian who complete schooling and incentivise African
and African employees. Therefore, continued youth to attend and stay in schools to lower the
expansion and presence of Indian businesses in African out-of-school rate
Africa will improve upskilling of young Africans
through corporate training workshops, CSR • Indian businesses should increase the frequency
upskilling initiatives, and technology and knowledge of skill development programs on the African
transfer through joint ventures. continent and partner directly with African
businesses or skill focused NGOs to improve
employability of African youth and close the skill
Recommendations gap on the continent.
Some potential steps that India and Africa can both
• Indian businesses should focus on Corporate
take to improve skilling of African youth could be:
Social Responsibility (CSR) programs on
• India should support the development of a women’s skill development to improve female
bilateral or multilateral education and skilling participation in the African workforce.
policy on the African continent, which would
monitor and measure learning outcomes and
improvement in employability in African youth.

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 Pathways for Shared Progress: India-Africa Economic Cooperation

There is a growing trend towards local production of

pharmaceuticals, with governments implementing
policies to promote local manufacturing through tax
incentives and import restrictions on certain
medications.

India has also been a preferred destination for

medical value travel from Africa. About 50,000
African patients visited India on medical visa in 2021.

Potential Areas of Collaboration

Digital health solutions are becoming increasingly
prevalent across Africa, ranging from telemedicine
platforms to mobile apps for disease management.
This digital shift is facilitating better access to
healthcare services and information, presenting

Healthcare and immense investment potential supported by both

public and private funds.

Pharmaceuticals Investing in local manufacturing plants and

distribution networks provides a direct path to

Overview meeting the increasing demand for pharmaceuticals.

Drug manufacturing capabilities can be developed in
Government of India initiatives such as Make in Africa, by training Africans in India through
India, Startup India, Digital India, National Health internships in Good Manufacturing Practices (GMP).
Stack and National Digital Health Blueprint highlight India can collaborate with Africa to establish joint
it’s role in prioritising innovations and incentivising manufacturing facilities through the supply of Active
the use of digital technology across all sectors, Pharmaceutical Ingredients (API). Indian companies
including health. The African pharmaceutical can invest and set up manufacturing units in Africa.
industry is valued at approximately USD 60 billion
and is projected to reach USD 70 billion by 203069. Further, building or upgrading healthcare
infrastructure, including hospitals and clinics,
Despite its vast market, the industry currently meets presents an opportunity to improve healthcare
only a fraction of the continent's pharmaceutical delivery and access to medicines. With India’s robust
needs, with over 70 per cent of drugs being growth in the infrastructure sector, it can assist Africa
imported. South Africa, Nigeria, and Egypt are the in building and developing its healthcare
largest pharmaceutical markets, collectively infrastructure too. Indian companies can assist with
accounting for nearly half of the continent's total the setting up of telemedicine centres in Africa under
market value. e-VidyaBharti and e-ArogyaBharti (e-VBAB) and set
up a chain of Indian hospitals in African countries.

Immense opportunities exist in funding R&D for

diseases prevalent in Africa, such as malaria,
About 50,000 African HIV/AIDS, and tuberculosis, as well as non-
patients visited India on medical communicable diseases. There is also a growing
visa in 2021.
market for herbal medicines and alternative therapies.

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59
The Indian industry can undertake collaborative effective strategies for healthcare data collection
research on infectious diseases with a focus on which can be further used for policy making and
developing vaccines. India can also provide support real time data monitoring.
for improving diagnostics for neglected tropical
diseases in Africa. • Members of the industry can work with the
Government in creating a healthcare fund by
India and Africa can organise annual industrial forging partnerships with institutions such as the
conventions between pharmaceutical companies World Bank, African Development Bank, etc. The
and business leaders from both regions to improve fund can help augment healthcare infrastructure
trade opportunities and collaboration; and set up a and can be used to finance the development
common e-marketplace for healthcare innovations plans of small and medium sized enterprises.
between India and Africa. Investing in education and India can offer even greater assistance to Africa
training for healthcare professionals and under India-Africa Development Fund.
pharmaceutical scientists can help address the skills
gap in the sector. • Indian Industry can join hands with the industry in
Africa in promoting research and development in the
healthcare sector which can facilitate greater
Recommendations collaboration in development of new treatments,
improved diagnosis, healthcare policy and
• Participation of the private sector is essential for developing capacities in the sector.
the development of health infrastructure; Indian
and African government can offer incentives • Indian healthcare companies should consider
facilitating greater investment from private helping in hospital management and training of
investors and multilateral development banks. doctors and nurses in African countries.
India can also offer support to Africa in creating

60
 Pathways for Shared Progress: India-Africa Economic Cooperation

Potential Areas of Collaboration

India launched its National Green Hydrogen Mission
in 2023 with a financial outlay of USD 2.38 billion, to
develop a comprehensive green hydrogen
ecosystem encompassing production, electrolyser
manufacturing, financing opportunities and
promoting research and innovation. Realising the
importance of green hydrogen, six African nations,
namely, Egypt, Kenya, Mauritania, Morocco,
Namibia and South Africa launched the Africa
Green Hydrogen Alliance (AGHA) to expand the
development of green hydrogen projects in the
African region.

Smart Cities are another way to reduce the

dependence on fossil fuels and augment innovative
solutions to mitigate the impact of climate change.
Green Economy Smart cities include core infrastructure such as
adequate water supply, assured electricity,
sanitation, sustainable environment, among others.
Overview The Smart Cities Mission of India launched in June
The Indian Government at the 26th session of the 2015 aims to develop innovative solutions to
United Nations Framework Convention on Climate increase the standard of living while aligning with
Change (COP 26) in 2021 pledged to achieve net India's net zero emissions target. Cairo, Algiers,
zero emissions by 2070. India’s low-carbon Rabat, Cape Town and Nairobi were among the top
development strategies depend on innovation in the 10 Smart Cities in Africa as per the Smart City Index
form of electric vehicles and low-carbon electricity 2024. Cairo was ranked as the Smartest City in
systems, smart cities, and development of Africa, with a global rank of 114.
low-carbon emissions strategies. India ranks 7th
globally in Climate Change Performance Index India and Africa can therefore collaborate in green
(CCPI, 2024) among the G20 countries, and has hydrogen, electric vehicles, and smart cities to reduce
made great strides in achieving its commitments. dependence on fossil fuels and meet rising energy
demands through advanced tech-driven solutions.
Africa contributes just 3.8% to global greenhouse
gas emissions. However, countries in Africa are
extremely vulnerable to climate change. Low levels
of economic development in Africa coupled with
extreme weather events such as floods and drought India launched the National
impact the poor in Africa much more intensely as Green Hydrogen Mission in
they lack funds to insulate themselves from such 2023 with a financial outlay of
adverse impacts. USD 2.38 billion

61
Recommendations
• Raising finance for sustainable solutions to • Formation of a specialized climate change
climate change is the need of the hour and the authority in Africa is suggested, bringing together
India Africa partnership can offer innovative government and industry experts, to plan and
financing solutions such as green bonds, blended execute tailored policies and programs for
finance, and others. Further, Indian industry can mitigating and adapting to climate change.
organize awareness programs among MSMEs to • Indian companies can share green product
educate them on environmentally friendly manufacturing in Africa. For example,
solutions, such as energy-efficient practices, and Confederation of Indian Industry (CII) has already
waste reduction techniques. certified close to 9000 building products as green
and these can be produced in Africa as well with
shared technologies.

62
 Pathways for Shared Progress: India-Africa Economic Cooperation

resources74. Most of the mineral processing and

production of goods with a significant share of
critical minerals is done outside of Africa.

African nations should seek to develop native

mineral processing capabilities or diversify their
export partners to not only increase the revenue
these nations receive but to also reduce
dependability on one market.

Potential Areas of Collaboration

One potential area of collaboration could be
between India’s leading mining conglomerates and

Critical Minerals
African state-owned mining operations to jointly
develop onsite mineral processing capabilities. India
is reliant on its supply chains of critical transition
minerals to develop technologies like solar panels.
Overview In 2023, the Government of India identified 30
As environmental challenges fundamentally shift critical transition minerals which include cobalt,
economic activity towards clean and green copper, and lithium.
technology, critical minerals will play a pivotal role in
this transition. The African continent has significant Another significant area of collaboration could be in
global reserves of critical transition minerals. Africa the form of dedicated critical minerals pacts
accounts for 48.1% of cobalt, 47.7% of manganese, between India and Africa to ensure equitable access
21.6% of natural graphite, 5.9% of copper, and 5.6% to mining blocs for Indian companies.
of nickel70.

On a national level, the Democratic Republic of

Recommendations
Congo (DRC) accounts for over 70% of global cobalt • India should pursue mineral exploration agreements
production and half of global reserves. Gabon, and critical minerals pacts in resource rich African
Ghana, and South Africa account for over 60% of countries to secure its mineral supply chain.
global manganese production71. Zambia is the • Indian mining businesses should launch
largest copper ore exporter in the world with over independent exploratory missions in African
USD 6.6 billion in exports in 202272. Finally, countries to assess and harness the critical
Zimbabwe holds the largest known deposit of lithium minerals present in these countries.
with a capacity of 11 million tonnes73.
• The Indian government should sponsor the joint
Therefore, Africa currently plays a significant and development of mineral processing facilities in
crucial role in the sourcing of these transition African countries and on the sites of critical mineral
minerals, but it could become a significant mines to improve supply chain efficiency and African
component of the entire value chain itself. participation in the critical mineral supply chain.
• Indian and African research groups on critical
While Africa has significant resources to build a minerals can be formed to facilitate knowledge
robust critical minerals industry, estimates show that transfer on mining and refining of critical minerals
African countries only generate 40% of the potential for industrial use.
revenue they could receive from these abundant

70
https://unctad.org/news/unlocking-africas-critical-mineral-wealth-energy-transition-can-pave-path-new-prosperity#:~:text=Africa%20is%20home%20to%
20sizeable,0.6%25%20of%20iron%20ore%20globally.
71
https://www.imf.org/en/News/Articles/2024/04/29/cf-harnessing-sub-saharan-africas-critical-mineral-wealth
72
https://oec.world/en/profile/bilateral-product/raw-copper/reporter/zmb
73
https://www.aljazeera.com/features/2024/6/12/as-china-scrambles-for-zimbabwes-lithium-small-miners-are-left-behind#:~:text=Located%20in%20the%20
Bikita%20hills,largest%2Dknown%20deposit%20of%20lithium.
74
https://unctad.org/news/unlocking-africas-critical-mineral-wealth-energy-transition-can-pave-path-new-prosperity#:~:text=Africa%20is%20home%20to%20
sizeable,0.6%25%20of%20iron%20ore%20globally.

63
 However, African countries are some of the largest
energy producers in the world with Algeria, Angola,
Nigeria, and Libya being four of the top 20 oil
producers globally. Fundamentally, this is due to the
export-oriented nature of Africa’s oil and gas
industry, where over 80% of Africa’s oil production is
exported from the continent. Therefore, given the
high concentration of individuals without access to
electricity and forecasted growth in Africa’s young
population, African countries must work to improve
the supply and reliability of energy transmission
systems to power development projects.

Renewable sources of energy could be a potential

opportunity to democratise energy access on the
African continent. The continent has significant
potential in renewable energy with 10 TW of solar
capacity, 100 GW of wind capacity, and 15 GW of

Power and energy geothermal energy77. Despite being less than 3% of

the global renewable energy market, Africa’s
utilisation of renewable energy has more than
Overview doubled since 2012.
Energy security and renewable energy are two
Solar energy is the fastest growing form of renewable
integral components of national and international
energy in Africa with solar accounting for 57% of
security. Some African countries are both net
investments in renewable energy between 2010 and
exporters and importers of energy and will be
202178. Furthermore, wind energy is expected to rise
significantly impacted by climate change. Therefore,
by over 900% based upon already announced
the development of secure supply chains of clean
projects in the sector. Therefore, African countries
energy sources is a critical and important initiative
should continue to support the development of
for the continent in the coming decades.
renewable energy projects on the continent to offset
negative impacts of climate change and increase
Presently, Africa lacks consistent access to electricity
energy accessibility and security.
with over 600 million people, or 43% of the African
population lacking consistent access to electricity75.
Africa is also one of the lowest consumers of energy African countries are some of the
with the continent contributing just 6% to global
energy consumption with a per capita energy
largest energy
consumption of just 180 kilowatt hours (kWh)76. producers in the world

75
https://www.iea.org/reports/africa-energy-outlook-2022/key-findings
76
https://www.csis.org/analysis/achieving-universal-energy-access-africa-amid-global-decarbonization
77
https://www.cppr.in/articles/future-prospects-of-india-africa-energy-ties
78
https://zerocarbon-analytics.org/wp-content/uploads/2023/11/GSCC_Africa_Final_V3-1.pdf

64
 Pathways for Shared Progress: India-Africa Economic Cooperation

Potential Areas of Collaboration Recommendations

India has supported energy security efforts on the • India should expand ISA initiatives to support
African continent through the ISA. Currently, 33 and develop solar capacity on the African
African countries are members of the ISA, which continent such as green bonds for solar panel
allows India to tap Africa’s latent potential in solar projects.
energy and provide technology, build capacity, and
employ Africans in the sector through various ISA • Indian renewable energy companies should
initiatives. invest and develop solar and wind renewable
energy projects in Africa to diversify India’s
Additionally, in 2020, the National Thermal Power energy supply chains and improve energy
Corporation (NTPC) won a contract to develop solar accessibility and security.
capacity in Mali and Togo, and is currently investigating
similar opportunities in Sudan, Malawi, Gambia, and • Indian companies can consider offering
Mozambique. Under the aegis of the ISA, India has favourable rates on refined oils for African
been able to expand to Africa and capture share in the countries with significant import dependency
promising solar industry on the continent. for energy. Therefore, these countries will be
able to provide energy to their citizens more
easily.

65
 Potential Areas of Collaboration
The India Middle East Europe Economic Corridor
(IMEC) is a recently announced joint initiative to
facilitate the transport of goods securely and
efficiently between India and Mediterranean
countries. North African states like Egypt and
Djibouti could play an important role in
Indo-Mediterranean trade due to their strategic
locations in the Red Sea and Gulf of Aden
respectively. Therefore, India should invest
significantly in port infrastructure in these countries
to strengthen and secure its commercial vessels
headed to the Mediterranean region.

Recently, there has been a significant uptick in the

volumes of shipments around South Africa and the
Cape of Good Hope. India could jointly establish and

Infrastructure invest in a dedicated corridor with eastern and

southern African nations like Mauritius, Tanzania,

Development South Africa, and the Seychelles to facilitate

commercial trade around the southern tip of the
African continent between India, Africa, and the rest
Overview of the world.
Infrastructure is a central component of facilitating
economic collaborations between India and Africa. Railways are another potential area of collaboration
Africa is situated along major shipping routes and between India and the African continent. India has
plays an integral role in global supply chains. The the fourth largest railway system in the world with a
Tanger Med Port in Morocco is the largest port in route length of 42,000 miles and carried over 8
Africa with a processing capacity of 9 million billion passengers in 202283. Furthermore, India has
twenty-foot equivalent units (TEU)79. The largest port developed its rail infrastructure sustainably with
in Southern Africa is the Durban Container Terminal, projections of 100% electrification by the end of
which has a combined capacity of 3.6 million TEUs 2024-2584.
and handles 65% of Southern Africa’s container
volumes80. The Port Said is a critical port because of
its geostrategic location along the Suez Canal,
which facilitates the transport of goods between
Asian and European markets and has a container
traffic of 800,000 TEUs81. Finally, the Port of Lome in India has the fourth largest railway
system in the world with a route
Togo is the largest one in West Africa with a capacity
length of
of 2.2 million TEUs82. Therefore, across the
continent, there is significant port infrastructure to 42,000 miles
facilitate global maritime trade and these could serve and carried over
as critical outposts in a dedicated shipping corridor 8 billion
between India and Africa. passengers in 2022
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https://www.tangermed.ma/en/ports-and-logistics/port/#:~:text=Tanger%20Med%20Port%20includes%204,of%209%20million%20TEU%20containers.
80
https://www.transnetportterminals.net/Ports/Pages/Durban_Container.aspx
81
https://dlca.logcluster.org/212-egypt-port-port-said
82
https://energycapitalpower.com/top-5-ports-to-watch-in-west-africa/
83
https://www.trade.gov/market-intelligence/india-railways
84
https://www.financialexpress.com/business/railways-indian-railways-on-track-to-achieve-100-electrification-with-rs-6500-cr-dedicated-budget-in-2024-25-says-
officials-3447207/

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 Pathways for Shared Progress: India-Africa Economic Cooperation

Indian companies have already taken steps to transportation infrastructure. Additionally, Indian
develop rail infrastructure on the African continent, infrastructure businesses could assist and invest in
with Rail India Technical and Economic Service developing highway infrastructure on the African
(RITES) winning a contract to supply locomotives for continent.
the Mozambique rail network85. Therefore, India can
share its expertise in the sector with African nations
to develop railway infrastructure on the continent.
Recommendations
• Indian Government and Indian businesses should
An estimated 80% of goods are transported by road; prioritise procuring ports along Africa’s Cape of
however, Africa’s road density has declined over the Good Hope to facilitate trade around the continent
past two decades. Consequently, the lack of and secure transnational supply chains.
navigable roads inhibits trade and transnational
linkages within the continent. It is estimated that • The Indian Government should enhance
Africa needs approximately USD 130-170 billion per partnerships between the Ministry of Railways
year over the next decade to correct this and African Railways Ministries to increase Indian
infrastructure gap86. India could be a reliable partner involvement in the development of rail
as the country has built over 92,000 kilometres of connectivity on the African continent.
highways over the past ten years, roughly averaging
25 km per day in roads constructed87. • The Indian Ministry of Roads and Highways
should sponsor technology transfer programs
Therefore, India could support Africa’s infrastructure between India and Africa to improve road
development through equitable loans or grants for connectivity and support the development of a
road construction and sharing knowledge on more interconnected AfCFTA.

85
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according%20to%20reports.
86
https://www.cgdev.org/project/designing-roads-africas-future#:~:text=Yet%20Africa%20currently%20trails%20the,roads%20are%20in%20South%20Africa.
87
https://timesofindia.indiatimes.com/city/delhi/nh-construction-set-to-touch-95000-km-in-10-years/articleshow/108122318.cms

67
 India is also one of the key space countries in the
world, with major successes to its credit such as
missions to the Moon, Sun and Mars along with
satellites and launch facilities. It has opened up the
space sector to private investments and several
Indian companies are participating in space
component manufacturing.

The African Union has set up the African Space

Agency (AfSA) and aims to leverage digital
applications for development. The space industry is
estimated to grow by over 16% to USD 23 billion by
2026. About USD 5 billion has been invested by 15
African countries in satellite projects. Over 300
companies are expected to work on areas such as
satellites, spacecraft components and emerging
technologies in space91.

The South African National Space Agency (SANSA)

Defence and Space is also in place and has built several satellites. The
African Union aims to develop services and products
aligned to its socioeconomic needs, indigenous
Overview capacity to operate and maintain core space
capabilities and industrial capabilities to translate
The Defence sector is a critical component of India’s
R&D into commercial use.
economy with an estimated 3.3% of India’s GDP
spent on the sector and over USD 2.63 billion of
exports in 2023-2488. The Government of India has
taken significant initiatives to promote, protect, and
Potential Areas of Collaboration
develop domestic defence production through policy There are significant opportunities and incentives for
measures such as Defence Production and Export Indian companies to develop products for African
Promotion Policy (DPEPP) and Defence Acquisition markets. Africa accounts for 15% of India’s total
Procedure (DAP 2020). The DPEPP is a planned defence exports with the three largest net importers
initiative by the Government of India to promote of Indian made defence products being Seychelles,
self-reliance in defence manufacturing, integration Mauritius, and Mozambique92.
into defence supply chains, and scaling the Indian
Additionally, India is sharing expertise in defence
defence industry to USD 25 billion in turnover and
manufacturing and research and development, with
USD 5 billion in exports89.
African nations in line with international norms and
Similarly, DAP 2020 prioritises indigenous defence ethics. Therefore, continued capital support and
financing for indigenous development of military
manufactured goods for the Indian military, which, in
hardware could be a promising area of collaboration
turn incentivises the domestic military industrial
between the continent and subcontinent.
complex. Finally, to further promote the defence
industry, the Indian Government has allowed up to
The African industry is estimate to grow
74% Foreign Direct Investment (FDI) in the
by over
automatic route and up to 100% FDI through the
government route90. 16% to USD 23 billion by 2026
88
https://www.investindia.gov.in/sector/defence-manufacturing
89
https://pib.gov.in/PressReleasePage.aspx?PRID=1643194
90
https://pib.gov.in/PressReleasePage.aspx?PRID=2004475#:~:text=Foreign%20Direct%20Investment%20(FDI)%20limit,in%20access%20to%20modern%20technology.
91
https://www.stimson.org/2023/who-woke-the-sleeping-giant-africas-emerging-space-programs-take-off/#:~:text=Grand%20Strategy,-November%2015%2C%
202023&text=As%20Africa%20looks%20to%20close,in%20the%20future%20space%20economy.
92
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 Pathways for Shared Progress: India-Africa Economic Cooperation

Another potential area of collaboration is the space Therefore, both geographies have extensive histories
sector. India and Kenya recently formed a strategic of defence cooperation across all regions of the
partnership on space to develop and expand Africa’s African continent, which should continue to be
space capabilities for monitoring weather events93. encouraged by India and African nations to promote
India’s ISRO could partner with additional African security of both regions and the ocean between them.
countries to launch and improve weather monitoring
and satellite capacity. India and Africa could cooperate closely on cyber
security and secure telecommunications. India is a
India should also increasingly prioritise closer global leader in ICT and the Government of India has
cooperation on defence with African nations through taken several initiatives to protect the country’s digital
Memorandums of Understanding (MoU) to increase infrastructure and industry including the National
security in both geographies and the Indian Ocean. Cybersecurity Policy (NCP). Under the aegis of the
India and South Africa signed an MoU on Defence NCP, India ranked 12th in cybersecurity resources and
Cooperation in 2000, which established the 13th in organisational capacity in the 2022-23 edition
India-South Africa Joint Defence Committee (JDC) of the MIT Cyber Defence Index. Therefore, deeper
which has held eight meetings since. India and cooperation between India and African nations on
Nigeria signed an MoU on Defence Cooperation in cybersecurity could facilitate technology transfer and
2007 that established the Joint Defence the development of native cybersecurity capabilities
Coordination Committee (JDCC) between both within these partnered countries.
countries that will hold a meeting later this year.

Additionally, India and Egypt signed an MoU in

September 2022 to enhance bilateral defence
Recommendations
cooperation and increase the frequency of joint • India should establish and share knowledge on
exercises and exchange of personnel. cybersecurity with African countries to maintain
the integrity of digital infrastructure and
Further, India is negotiating a defence cooperation connectivity in the African region.
agreement with Ethiopia that will focus on providing
training for Ethiopian troops as well as credit • India’s ISRO can invest and partner with African
restructuring for the Ethiopian military. countries to improve monitoring of weather events
and transfer technology for low-cost satellites.
Finally, India and African nations have conducted
joint maritime military exercises to promote regional • India’s military industrial complex should increase
security in the Indian Ocean including the IMT exports and promote indigenous development of
TRILAT 24 (India-Mozambique-Tanzania Trilateral military hardware on the African continent.
Exercise) and LAMITIYE-24 exercise between India
and the Seychelles.

93
https://www.downtoearth.org.in/africa/india-and-kenya-forge-alliance-to-expand-africas-space-capabilities-in-response-to-climate-crisis#:~:text=India%20and%
20Kenya%20forge%20alliance,in%20response%20to%20climate%20crisis&text=India%20has%20expressed%20interest%20in,and%20monitoring%20extreme%20
weather%20events.

69
Recommendations
 Pathways for Shared Progress: India-Africa Economic Cooperation

Country strategies
With the vast diversity in economies, industrial
strengths and resources in Africa, India needs to
take a differentiated strategy towards African
countries, depending on 3 factors.

First, the differentiation should be based on

economic development level of the partner country.
Least Developed Countries (LDCs) would need
higher support in terms of development partnerships,
aids, grants and Lines of Credit. The aim should be
to work with them towards their developmental goals.
At the same time, it needs to be seen how the
partner country can increase its trade to India. This
would require capacity building and investments.

Africa is set on a new trajectory of growth and India On the other hand, low and middle income
must be a close partner and friend in its economies need a separate strategy involving
developmental journey. Given the huge synergies greater private sector investments. These countries
between both sides, ample opportunities exist for not only have markets that can be tapped internally,
Indian industry to explore opportunities in Africa’s but would also enjoy capabilities of exporting to India
growth. Many Indian companies have succeeded in as well as exporting to third countries with Indian
establishing a strong footprint in Africa and have business investments.
seized leadership positions across sectors such as
telecom, automotives and FMCG. Second, the strategy needs to take into
consideration the size of the consumer market in a
The need of the hour is for more Indian businesses partner country.
to leverage growth opportunities in Africa. A private
investment-led economic cooperation model can Third, the strategy would need to look at the
yield best results, including being highly profitable particular strengths of the partner country in terms of
and successful for businesses willing to be in for the agriculture, industry, services, fintech and digital
haul. To do this, there is need to bridge the inclusion, and mineral and other natural resources.
information gap and the cultural gap. Indian
companies should also leverage the many The differentiated strategy should be developed by
governmental initiatives to enhance cooperation the Indian Government along with specific sectors
with Africa. that can be addressed in the partner economy.
Private sector can be attracted to participate through
various options including funding, marketing and
Least Developed Countries (LDCs)
investment support, among others.
would need higher support in terms of
development partnerships,
aids, grants and Lines of Credit.

71
From aid to investment Trilateral partnerships
In 2019, before the pandemic struck, Africa was India and Japan had agreed on a trilateral
moving to a balance between aid received and partnership initiative, the Asia Africa Growth Corridor,
benefits of trade and investment. According to the that was designed to bring together Indian and
World Investment Report 2022, Africa received a Japanese expertise and funds for tapping
record FDI of USD 83 billion in 2021. This was opportunities in Africa. This has not taken off as
double the FDI for 2020 but barely 5% of global FDI. expected due to various reasons such as lack of
information, cultural gaps and others.
Among Africa’s five regions, Southern Africa, East
Africa and West Africa saw higher FDI flows. Central India and Germany have worked on projects in
Ghana, Cameroon and Malawi, expanding farming
Africa remained flat, and North Africa registered a
opportunities for women and technology for potato
decline. Greenfield investments were at a low ebb
production. The two would like to expand this
but renewable energy attracted new investments
partnership to provide sustainable, viable and
with nearly 71 new projects in 2021.
inclusive projects for addressing development
challenges and meeting SDG targets for climate.
Africa provides great potential to attract international
investment in the green and blue economies Similarly, the UK and India Prime Ministers have
besides infrastructure. The challenges are to improve announced the Global Innovation Partnership to
the investment ambience and enhance African accelerate SDG in Africa. They have also worked
capacity to absorb investment. on Supporting Indian Trade and Investment for
Africa (SITA).
From 2022 onwards, FDI started declining and was
only USD 45 billion in 2022 and 3.5% of global FDI; Trilateral cooperation converges strengths of India in
this was on account of the diversion of global management and project development with the
interest due to the pandemic and emerging resources of advanced partner countries to
international crisis. undertake specific projects in Africa. Such trilaterals
are excellent solutions for further expanding India’s
In 2024, African growth is expected to be 3.7% rising engagement in Africa to meet common goals.
to 4.3% in 2025, indicating African resilience. If
these are matched by improved global economic Trilateral partnerships can be entered into for a range
conditions, and African policy measures, Africa of sectors such as agriculture, industrial development,
would be the second fastest growing region globally skill development, women’s empowerment, and trade.
The key is to build a huge scale for these
with 40 countries out of 54 set to achieve higher
partnerships so that they can be effective at large.
growth rates compared to 2023.
These should also bring in industry, academia and
The impact of COVID, the lagging implementation of
civil society organisations to partner in Africa.
SDGs and imperceptibility of climate finance all
make Africa anxious that its domestic budgets will
be strained for social sector spending. Therefore, the
countries are94 reluctant to borrow more and suffer
debt stress. This impacts India’s LOC led model.
Access to finance
Access to finance is cited as a key constraint for
The preferable model therefore would be an FDI led industry wishing to expand horizons in Africa.
model including PPP projects to achieve SDGs and To address this, several initiatives need to come
infrastructure development in Africa. together.

94
Contributed by Amb Gurjit Singh, Author of The Harambee Factor

72
 Pathways for Shared Progress: India-Africa Economic Cooperation

It needs to be understood that due to debt situation • ECGC denominates its risk cover in INR, rather than
of many African countries, Lines of Credit are not the currency of finance or investment (usually USD).
preferred by them as it could lead to further
• As a result, even with ECGC PRI cover, the Indian
expanding their debt. Therefore, alternative solutions
exporter / investor is exposed to an open USD-INR
should be considered.
exchange risk, and since the INR tends to depreciate
First, there is need for more Indian bank branches in against the USD more than it appreciates, the PRI
Africa. Finance is the key lubricant of trade finance, cover steadily deteriorates over time.
and a sound banking network is the key to finance95. • Consider an investment of USD 20 million for
• Whether a trade transaction is in letter of credit (say) a cotton yarn project, made by an Indian
terms, or on open account, the key documents of company in an African country in January 2020.
title flow through the banking system. For this The USD-INR in January 2020 was INR 70.96 per
purpose, banks use their own branch network, or USD, so the ECGC would extend PRI for a sum of
enter into correspondent banking relationships with INR 127.73 crore (being 90% of 141.92 crore at
other banks (advising, collecting, guarantees etc). that rate of exchange).

• In places where a bank has no branch of its own, Now assume that in December 2023 (just 4 years
especially overseas, it is critically dependent on later) there is some unfortunate natural crisis or
banks in that territory to provide the correspondent war like situation in that country. ECGC would pay
banking services. Since most of the banks with the sum of INR 127.73 crore to the Indian
wide networks and robust trade finance systems Investor; however, at the December 2023
tend to be OECD country banks, the costs of such exchange rate of INR 83.21 per USD, the Indian
correspondent banking tend to be high. Investor would realise only USD 15.35 million,
suffering a loss of USD 4.65 million (23.25%)
• Prior to 2016 when bank NPAs in India started purely on account of the rate of exchange. The
rising, Indian public sector banks such as State amounts in the example are small, but the
Bank of India, Bank of Baroda and others had a disincentive to invest, especially for a small or
large network of on-the-ground presence in Africa medium company, is very severe.
via their own branches, or by way of their banking
subsidiaries or joint ventures. • It should be noted that India is the only country in
the world, whose PRI agency (ECGC) provides
• As African branches were less profitable, many cover only in INR, rather than in the currency of
branches had to be closed for strengthening banks. credit or investment. China, Japan, Korea, Turkey
and the US all provide PRI in their home currency
• Private sector banks take a short term view of
or the investment / credit currency at the option of
profit, while PSU banks take a long view. With the
the investor/ exporter.
public sector banks now back in good health, it is
time for them to rebuild their reach in Africa and
this may be considered by the Indian Government.
India Africa Rupee Trade
Two, political risk insurance in foreign currency
needs to be addressed. Africa is a fast-growing market with significant
potential for economic expansion and development.
• While short term trade finance has excellent Recognising the benefits of rupee trade, India
political risk insurance (PRI) cover from the instituted the mechanism for trade settlement in
Export Credit Guarantee Corporation of India Indian rupees. In July 2022, the Reserve Bank of
(ECGC), this is not the case for medium / long India (RBI) authorised Indian banks to open and
term trade finance / project finance and maintain Special Rupee Vostro Accounts (SRVAs) for
investments. Investment into Africa is of particular partner trading countries' banks. Thereafter, banks
importance as the debt absorption capacity of of 6 African and 12 other countries were granted
these countries is low. approvals for opening SRVAs.

95
This section is provided by Mr David Rasquinha, former Managing Director, EXIM Bank of India

73
India currently has functioning SRVAs in Kenya, mapping, and e-governance. Continuing and
Mauritius, Seychelles, Tanzania, Uganda, and expanding such programmes is crucial for
Botswana with possibility of South Africa, Nigeria and developing skilled professionals and strengthening
Lesotho joining the list very soon. This action will help bilateral ties. To generate and incubate more ideas,
Indian traders make payments in rupees for all both India and Africa should look to engage with one
imports, which will be credited to Vostro accounts another in more programmes and platforms.
(special rupee accounts in Indian banks) of the
corresponding banks of the partner countries, while In a challenging global environment, services trade
Indian exporters will be paid from the balances in the is increasingly seen as vital for job creation, national
designated Vostro accounts. Any surplus rupee growth, and the exchange of ideas, knowledge, and
balances in Vostro accounts may be used for technology. The services sector significantly
investments, including Government of India securities. supports goods trade through supply chains and
e-commerce. Notable synergies exist between
Furthermore, India and Africa also share a huge services and manufacturing, such as telecom
expatriate population. Therefore, an INR trade services with equipment manufacturing, and
settlement initiative between African economies and electronic hardware with software. Other key areas
INR will further enrich the centuries old trade relation include IT, healthcare, pharmaceuticals, shipbuilding,
between the economies and will allow both Indian R&D, and biotech.
and African markets to grow.
Efficient transport, distribution, finance, utilities,
The benefits are substantial, encompassing reduced telecommunications, and business services are
transaction costs, mitigated risks from exchange rate crucial for cost-effective production and marketing of
volatility, and bolstered currencies for participating goods. Tourism with focus on medical value travel is
nations. another key area.

Additionally, this endeavour paves the way for Therefore, it is essential to enhance advocacy and
currency diversification, increased significance of awareness in both public and private sectors, and
Indian payment systems globally, and improved price to mobilize policy attention and resources to boost
discovery mechanisms for Indian businesses. the sector’s competitiveness. A services-driven
However, issues such as exchange rate volatility, regional development strategy, integrated into a
partial rupee convertibility, and limited international comprehensive policy framework, is crucial for
acceptance warrant careful consideration and linking services to broader national development
concerted efforts to overcome. goals.

Focus on services Role of Indian and

Traditionally, India has focused on East and
Southern Africa due to maritime proximity and a African Missions
large diaspora. The Indian Technical and Economic
Cooperation (ITEC) programme, which has Indian missions and posts are India’s presence on
expanded engagements to over 44 countries, the ground and are doing excellent work in
supporting capacity building, project assistance, deepening and strengthening the partnership with
scholarships, and institution-building has trained India. Similarly, African missions in India have an
over 200,000 civilian and defence professionals from extensive engagement and deep connects with all
160 countries, predominantly in Africa and Asia. stakeholders in the country. A greater focus on
economic diplomacy and support to private sector
Projects like the Pan African e-Network connect from missions of both sides could support
Africa’s 54 countries to India and each other, sharing investments and specific projects from India to Africa.
expertise in telecom, medicine, health, resource

74
 Pathways for Shared Progress: India-Africa Economic Cooperation

Embassies can consider working on the following • Lower transaction costs, including high shipping
areas: and insurance costs to facilitate trade.
Enhancing private sector engagement: Missions - High shipping costs and high cost of insurance
can work on setting up regular B2B meetings, in exports to African countries have led many
undertaking physical business delegations in both Indian exporters to sell on a ‘free on-board’
directions, identifying issues to be taken up with basis rather than ‘on-delivery’ basis. Due to
respective governments, providing information on high transaction costs and perceived risks,
areas of investment and supporting and working Indian exporters often avoid taking risks. So,
with businesses to bid for projects. reducing these costs is important for boosting
trade between India and Africa. Addressing
Skill development: CII has an intensive skill these costs will reduce risk perceptions and
development and training and placement encourage Indian exporters to engage more
programme, which can be replicated in African freely with African markets.
countries.
• Improve the dissemination of market information
Sustainability projects: CII through its centres of and knowledge about each other’s markets.
excellence supports Indian industry with capacity
- The knowledge asymmetry created due to the
building, assessments and audits in the areas of
lack of proper dissemination of information, and
green buildings, energy efficiency, water
the incomplete understanding that India and
management, waste and plastic waste management
Africa have about each other’s markets creates
and ESG compliances, among others. It can
major hurdles. It is necessary to create
undertake such projects in Africa with the help of
platforms in India for marketing and promotion
industry members.
of opportunities in African countries with
specific sectoral and regional sub-groups.

Other Areas of
Cooperation
• Establishing a Free Trade Agreement (FTA) or a
Preferential Trade Agreement will facilitate trade,
investment, and economic cooperation.
- The AfCFTA is a promising grouping that could
promote increased cooperation and improved
ease of doing business on the African
continent. Therefore, a free trade agreement
with the AfCFTA would improve trade and
connectivity between the continent and
sub-continent and increase the ability for Indian
companies to engage with the continent.
Additionally, individual free trade agreements
between India and key African nations could
also be pursued to improve trade linkages
between the two regions.

75
Conclusion
 Pathways for Shared Progress: India-Africa Economic Cooperation

highlighting upcoming investment opportunities

would be beneficial for Indian industry to explore
potential options.

The proactive agenda-setting by African

governments and leaders indicates investment
opportunities across various sectors that Indian
industry should capitalise on. In turn, governments
and leaders in Africa must provide tangible
on-the-ground support and frameworks. This
includes ensuring transparency, actionable policies,
and measurable outcomes to attract Indian
companies and reassure investors. Business growth
in Africa is crucial to establishing a sustainable
ecosystem that promises a brighter and more
developed future for millions of Africans.

The India-Africa partnership is mutually beneficial,

The strong partnership and mutual aspiration of both with both regions fostering each other's growth and
India and Africa to establish new economic development. Indian companies investing in Africa
engagements across emerging dimensions are are creating jobs and boosting economic growth in
evident and define their relationship. However, a African nations. Conversely, African countries offer
limiting factor is the availability of funds to fulfil these opportunities for Indian companies to expand and
aspirations. diversify their businesses.

The private sectors of both sides can play a crucial Africa presents a substantial market for Indian goods
role as active participants and partners in promoting and services, featuring a growing consumer base
bilateral linkages, with the private sector standing to and investment opportunities in sectors like
benefit the most from these initiatives. Interest from manufacturing, infrastructure and agriculture.
the private sector is increasing, as evidenced by Additionally, Africa's abundant natural resources and
growing trade and investment relations. youthful demographic offer Indian companies the
chance to invest and develop new markets.
Under the current government-led agenda, the
Indian industry faces challenges related to limited This is truly a mutually beneficial, mutually
knowledge and information about opportunities in productive partnership for both sides.
Africa. Additionally, there is apprehension about risk
factors on the continent.
Indian companies investing in Africa
A collaborative effort between government and are creating jobs and
industry is essential to stimulate interest in Africa
and facilitate accurate information flow.
boosting economic
Active support from embassies on both sides in growth in African nations.

77
Annex:
Indian Economy: Rising Growth Trajectory
In the last couple of years, the world has gone Amidst the global flux, Indian economy stands on a
through multiple crises which has added to the long firm economic footing buttressed by a strong
list of existing flashpoints. Despite these challenges, performance across sectors, which has imparted its
global growth is seen to sustain its momentum in resilience. The intrinsic strength of India’s
2024 supported by a rebound in global trade and an macroeconomic fundamentals was reaffirmed as it
anticipated soft landing in advanced economies. The registered a healthy growth rate of 8.2% in 2023-24,
International Monetary Fund (IMF) in its latest World making it the third consecutive year of above 7%
Economic Outlook projects the global economy to growth. The resilience in the domestic economic
grow at 3.2% in 2024, the same rate as in 2023. activity came on the back of strong investment
demand and manufacturing sector activity, coupled
with upbeat business & consumer sentiments.

Figure 21: Manufacturing sector activity strengthens in 2023-24 (y-o-y%)

10.1 9.9

2.9

-2.2
-2.8
2019-2020 2020-2021 2021-2022 2022-2023 2023-2024

Source: CSO

Moreover, there has been a continued uptrend Services PMI have also maintained buoyancy. The
witnessed in a slew of high-frequency indicators revival in rural demand has also been encouraging,
such as GST revenue collections, bank credit, auto with rural FMCG growth, which was lagging the
sales and air passenger traffic among others since urban demand having picked up since Q2 2023-24,
the start of the current fiscal year. Manufacturing and overtaking the urban demand in Q4 2023-24.

78
 Pathways for Shared Progress: India-Africa Economic Cooperation

Figure 22: GST Revenue collections have been robust over the years (Rs lakh crore)

20.18
18.07

14.83

11.37

2020-21 2021-22 2022-23 2023-24

Source: PIB

With this background, CII expects India to grow at a thrust on capex while maintaining fiscal prudence,
healthy rate of 8% in 2024-25, higher than the continued softening of inflationary pressures, and
estimates of the RBI (7.2%) and IMF (6.8%) for the improvement in global trade prospects are the other
current year. Our optimism stems from expectations key factors, which would support growth in the
of next-gen reforms pertaining to the factor market, current fiscal. Having said that headwinds from
being carried forward in mission mode. Apart from geopolitical tensions, volatility in international
these next-gen reforms, the expectations of an commodity prices, geoeconomic fragmentation, and
above-normal monsoon, the government's continued elevated food prices pose risks to the outlook.

Figure 23: Budget on track to adhere to the fiscal glide path (Fiscal deficit as % of GDP)

9.2

6.8
6.4

5.8

5.1
4.7

2019-20 2020-21 2021-22 2022-23 2023-24 (RE) 2024-25 (BE)

Source: Budget documents

79
 Figure 24: India’s real GDP growth trajectory over the years (y-o-y%)

9.7
8.2 8.0
7.0

3.9

-5.8

Note: 2024-25 is CII forecast

Source: CSO

Headline inflation as measured by the Consumer stay stubbornly high, non-food categories have
Price Index, which had been a cause of worry in the exerted a downward push on the headline print since
last fiscal, has been showing signs of softening the start of the current fiscal. A slew of supply-side
lately. CPI inflation continued to stay above the RBI’s developments announced by the government
target of 4% as it averaged 5.4% in 2023-24 as coupled with lagged impact of the RBI rate hikes
compared to 6.7% in 2022-23 mainly on the back of have also contributed to moderation in inflation.
high food prices. Even as food prices continue to

Figure 25: Annual CPI inflation print (y-o-y%)

6.7

6.2

5.5
5.4

4.8

2019-20 2020-21 2021-22 2022-23 2023-24

Source: CSO

80
 Pathways for Shared Progress: India-Africa Economic Cooperation

Going forward, expectations of a normal monsoon by the key multilateral organisations are encouraging
this year will help to soften food prices, thus aiding in and will help to support India’s external demand.
bringing down the headline print near the RBI’s
target of 4%. RBI, on its part, which has maintained Further, regarding external financing, India has seen
a status-quo on the key interest rates since February robust Foreign Direct Investment (FDI) inflows in the
2023 is expected to pivot to cutting rates in the recent years, supported by government’s enabling
second half of the year in tandem with improvement policy reforms and attractiveness of robust economic
in transmission of the past rate hikes to the money fundamentals of the Indian economy. In the fiscal
market rates. year 2023-24, India attracted gross FDI inflows
amounting to USD 70.9 billion, as compared to USD
On the external front, despite persistent global 71.4 billion recorded in the previous year. Foreign
challenges, overall exports (merchandise + services) Portfolio Investments (FPI), too, have remained
stood at USD 778.4 billion in 2023-24, surpassing strong, aiding the emergence of a booming domestic
last year’s highest record of USD 776.3 billion. Even capital market.
as merchandise exports contracted by 3.2% due to
slower external demand as India’s key export To conclude, despite the challenges emanating from
destinations saw a slowdown, healthy outbound the global environment, we are optimistic that India’s
shipments of services were the main drivers of rich economic fundamentals and strong
overall exports. Going forward, the recent healthy performance across the sectors will continue to
export momentum seen since the start of the current impart resilience to the economy and take it to a
fiscal coupled with forecasts of better trade growth higher growth trajectory.

81
The Confederation of Indian Industry (CII) works to create and sustain an environment conducive
to the development of India, partnering Industry, Government and civil society, through advisory
and consultative processes.

CII is a non-government, not-for-profit, industry-led and industry-managed organization, with

around 9,000 members from the private as well as public sectors, including SMEs and MNCs, and
an indirect membership of over 365,000 enterprises from 294 national and regional sectoral
industry bodies.

For more than 125 years, CII has been engaged in shaping India’s development journey and works
proactively on transforming Indian Industry’s engagement in national development. CII charts
change by working closely with Government on policy issues, interfacing with thought leaders, and
enhancing efficiency, competitiveness, and business opportunities for industry through a range of
specialized services and strategic global linkages. It also provides a platform for
consensus-building and networking on key issues.

Through its dedicated Centres of Excellence and Industry competitiveness initiatives, promotion of
innovation and technology adoption, and partnerships for sustainability, CII plays a transformative
part in shaping the future of the nation. Extending its agenda beyond business, CII assists industry
to identify and execute corporate citizenship programmes across diverse domains including
affirmative action, livelihoods, diversity management, skill development, empowerment of women,
and sustainable development, to name a few.

For 2024-25, CII has identified “Globally Competitive India: Partnerships for Sustainable and
Inclusive Growth” as its Theme, prioritizing 5 key pillars. During the year, it would align its initiatives
and activities to facilitate strategic actions for driving India’s global competitiveness and growth
through a robust and resilient Indian industry.

With 70 offices, including 12 Centres of Excellence, in India, and 8 overseas offices in Australia,
Egypt, Germany, Indonesia, Singapore, UAE, UK, and USA, as well as institutional partnerships
with about 300 counterpart organizations in almost 100 countries, CII serves as a reference point
for Indian industry and the international business community.

Confederation of Indian Industry

The Mantosh Sondhi Centre
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