27 Jul 2016

Modi's Four-State Tour a Sign of Resurgent Interest in Continent

Written by  Kudrat Virk

No. 372: Modi's Four-State Tour a Sign of Resurgent Interest in Continent / Kudrat Virk / Business Day
27 July 2016

Earlier in July, Indian Prime Minister Narendra Modi's globetrotting foreign policy brought him to African shores for the second time in as many years. This, for a five-day whirlwind tour of Mozambique, SA, Tanzania and Kenya.

Much of the commentary on his two-day stop in SA focused on India's success in securing SA's support for New Delhi's controversial campaign to join the Nuclear Suppliers Group. Delhi, unlike the rest of the 48-member group, is not a signatory to the 1968 Nuclear Non-Proliferation Treaty, and was thwarted in its initial bid for membership earlier in the year.

The main aims of Modi's four-country visit were more wide-ranging, though, covering the gamut from economic to defence and security co-operation. Over the past decade Africa — once a close brother, then a distant cousin — has seen a resurgence in Indian interest.

But this has not attracted as much attention as the much larger, and expanding, Chinese footprint on the continent. The July 2016 visit was to a large extent a charm offensive aimed at boosting India's profile in Africa. A total of 19 agreements were signed, and the Indian prime minister promoted his "made in India" initiative, while paying homage to the shared African and Asian struggle against colonialism.

Modi's first African foray, in March 2015, was to the islands of Mauritius and Seychelles, and formed part of a three-country Indian Ocean tour that included Sri Lanka. His more recent visit took in four Indian Ocean Rim countries on Africa's east coast, all with Indian diaspora communities.

Modi's second sojourn thus was as much a part of India's strengthening diplomacy in the Indian Ocean region, as it was an exercise to enhance its ties with trade partners. SA, Kenya and Tanzania are among India's top-five export destinations on the continent. Mozambique, Modi's first stop, hosts nearly a quarter of Indian investments in Africa. It is also strategically located on the Indian Ocean. The Mozambique Channel, with Madagascar to its east, is a key "choke point" — 98% of SA's maritime traffic is estimated to pass through this waterway.

For both India and Africa, the Indian Ocean's sea lanes have immense importance. Since 2000, India-Africa trade has increased exponentially to an estimated $72bn in 2015, although it is still dwarfed by China's $220bn trade. Together, the two emerging Asian economies are thought to account for more than a quarter of Africa's external trade, much of it seaborne.

With major gas discoveries off Africa's east coast, Indian Ocean trade routes connecting the continent with India (and China) could gain greater significance. Mozambique has been seen as a key source for India to diversify its dependence on liquefied natural gas imports, as well as a means — along with Tanzania — to increase its food security. Modi's stops in Dar es Salaam and Maputo included agreements aimed at increasing agricultural co-operation and boosting exports of pulses to India.

The emergence of piracy off the Horn of Africa has underscored security concerns in the western Indian Ocean region, which lacks the regional architecture to tackle such threats. The maritime region is also an arena of strategic competition between New Delhi and Beijing. Chinese investments in port-development in Indian Ocean coastal countries including Kenya, Tanzania and Mozambique have tended to rouse India's suspicions of a "string of pearls" strategy to encircle it. India's maritime security strategy includes the East African coastal region, as well as the Cape of Good Hope and its littoral, as areas of primary interest. Maritime and defence and security co-operation formed part of the bilateral conversation at all four stops during Modi's July visit.

But what of the nature of this burgeoning trade between India and Africa? Oil, gas and commodities dominate India's imports from Africa and are crucial to meeting its growing energy and food demands. Indian exports to Africa consist mainly of manufactured products. This has contributed to anxiety about a new "scramble for Africa". Yet, India's present-day encounter with Africa has many facets.

The Indian commercial presence in Africa extends beyond extractive industries to the information and communications, manufacturing, as well as pharmaceutical sectors. It is also diverse and includes state-owned enterprises, private corporate giants, as well as medium-sized businesses.

Companies such as Tata and Ranbaxy have been here since the 1970s, while others — Bharti Airtel, for instance — are newer entrants. By one estimate, there are more than 150 Indian companies operating in SA alone. Beyond commerce, India is an emerging provider of development assistance. Its Pan-African e-Network Project aims to connect medical and education centres in India with counterparts in 53 African countries.

That said, the pattern of India-Africa trade is a concern; one that received relatively less attention in the hoopla surrounding Modi's July visit. The issue was raised in SA ahead of his arrival in the country, which is keen to increase its value-added exports to India, as well as to the other Brics (Brazil, Russia, India, China and SA) nations. In 2013-14, the five-member grouping undertook a joint study on ways to increase such exports in intra-Brics trade. The issue continues to be discussed at the ministerial level, and by the Brics contact group for economic and trade issues. But it has remained thorny and politically sensitive. SA has, in addition, run a persistent trade deficit with India. In 2015, this amounted to R13bn, with total trade of R95bn.

India has emphasised capacity development in its outreach to Africa in an effort to distinguish itself from China; as well as to counteract the negative imagery of exploitation. Modi has identified India as a partner in the building of African capacities and institutions. The rhetoric is not meaningless. Education and skills development have been the focus of several Indian initiatives in Africa since the first India-Africa Summit in 2008. New Delhi has also progressively increased scholarships for Africans to study in India. In 2015, at the third India-Africa Summit, it committed to extending 50,000 such scholarships.

Each stop on his July visit witnessed Modi courting the local Indian community. The tour featured a strong emphasis on the historical, cultural, and emotional ties that bind contemporary India to Africa. This was particularly evident in SA, where Modi expressed his penchant for symbolism by retracing Mahatma Gandhi's fateful train journey from Durban to Pietermaritzburg.

But all of this stands in contrast to recent incidents of violence against African students and migrants in India that, in the eyes of many, have exposed latent racism and prejudice in parts of Indian society. If the relationship with Africa is seriously "beyond strategic considerations", then India needs to invest as much effort pushing for better understanding of Africa in India as it is in promoting India in Africa.

Virk is a senior researcher at the Centre for Conflict Resolution

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