Besdies success stories such as Bharti Airtel’s sweep in the telecom sector, the over-arching themes that arose from the discussions highlighted that China may seem ahead in terms of exploiting the business opportunities on offer in the neighbouring continent, but India has a much longer term goal in view.
“We are not competing with China. India is not in the same line of business because the nature of the Indian economy is different. We are focussing on capacity building. Our strengths lie in building relationships and linkages with people,” stressed Navdeep Suri, joint secretary in the public diplomacy division of the Indian ministry of external affairs. His department has been at the heart of spearheading some innovative new campaigns for an India-Africa push, including facilitating people-to-people contacts through the Indiafrica program.
Indian investments in Africa currently stand at roughly $30 billion, with Bharti Airtel’s acquisition of Zain leading the way. Trade between the two countries is worth about $50 billion and a government target of $70 billion has been set for 2015.
“Investments follow trade and the advantage of Africa for Indian companies lies in the fact that you can get first world results at third world costs. In the long run, India wins hands down over China because of the large Indian Diaspora and the fact that we like to work with the local community. Healthcare, IT, renewable energy, oil and gas, and, of course, agriculture and food processing are just some of the areas of potential growth,” said Zain Latif, the founder of TLG Capital who has clinched a series of deals in sub-Saharan Africa, largely in the field of healthcare.
Access to finance, which has been a stumbling block in the region, seems to be easing with a number of private equity firms coming in. However, the note of caution sounded by all Africa experts and watchers was to keep the vast divide across the 54 countries in mind.
“The region is much more stable than 15 years ago and if Indian companies go in with a long-term strategy, there is no reason for low returns. Africa offers a huge opportunity to leapfrog technology and for Indian companies to innovate in a new way,” added Barnik Maitra, partner at McKinsey India who works with Indian companies on their market entry strategies in Africa.
by Aditi Khanna