India in the WTO

An India-Africa forum in early April is all set to follow in the foot-steps of last years Africa summit in Beijing. According to a report

India is likely to announce duty free import of select items from some African countries at its first-ever summit with 14 African countries in April here.
The April 8 summit will come out with an action plan for reinvigorating India-Africa ties and a political declaration that will encapsulate broad directions of this partnership in the 21st century, a top official source said.
The action plan will include a broad spectrum of areas, including trade, investment, education, agriculture, mining, infrastructure, education and culture.
‘We are working on a package of duty concessions that may cover some agricultural items for least developed countries of Africa,’ official source said.
Total trade with Africa for 2006-07 was estimated at around $20 billion with exports to Africa growing by more than 180 percent.
The duty-free and quota-free regime for some African countries will be a big step to energise trade ties between India and Africa.
India is leaving no stone unturned to make the upcoming India-Africa forum summit a big success and expects it to be a precursor to a bigger summit with the 53-nation African continent.
Algeria, Burkina Faso, Democratic Republic of Congo, Egypt, Ethiopia, Ghana, Libya, Nigeria, Senegal, South Africa, Uganda and Zambia are among the countries to attend the summit. The participating countries have been chosen by the African Union.
The summit has been structured as a three-tier interaction between senior officials (April 4), foreign ministers (April 7) and 17 heads of states/government of the two sides…

Indian officials differentiate between China’s approach to Africa and that of India. The same report continues:

Although the move appears to have been inspired by a similar summit China held with African states, Indian officials are keen to distinguish their approach, of capacity building and empowerment towards Africa, as different from the trade-driven Chinese approach.
India sees its partnership with Africa as one of empowerment and meeting genuine African needs. Nearly 15,000 African students study in India every year.
‘The summit will showcase the brand image of India in Africa. Africa has changed and so has India. The forum will be appropriate to give a new direction to the partnership between the two sides,’ said an official.
It will also be attended by heads of sub-regional groupings like the Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA) and the Economic Community for West African States (ECOWAS).
India’s help in setting up the Pan-Africa e-network that will electronically link 53 countries of Africa and bring them benefits of tele-education and tele-medicine highlights the new thrust of Indian diplomacy in Africa.
Besides, India has given generous lines of credit to assist the New Partnership for Africa’s Development (NEPAD) and written off the debt owed by the African countries under the HIPC (Heavily Indebted Poor Countries) Paris Initiative.
India has also spent more than $1 billion on providing training to more than 1,000 officials from sub-Saharan Africa under the Indian Technical and Economic Cooperation Programme (ITEC).

Here is what another source had to say

Recognising the immense opportunities for cooperation with Africa, India is likely to announce duty cuts for certain imports from Africa and assistance in developmental projects. As per the official sources, the core of the discussion will be how India and Africa can develop partnership in the first part of 21st century.

“We don’t want our approach tainted by the West approach. We’ll talk about Africa to Africans; we will talk to Brazil about Africa but not to these countries. We should not be seen as exploiters in Africa. We want to be partners in the genuine sense of the word,” said a senior official of the External Affairs Ministry.

While 48 African nations had participated in Beijing summit, only 14 are going to be a part of the Delhi summit. But these countries will have the mandate of the entire continent as they have been chosen by the African Union itself.

However, the significance does not lie in number; in fact it lays in the opinion that Africans hold themselves and who are eager to balance China’s overwhelming and aggressive moves in their continent with India’s gentle touch.

The Beijing summit produced wave of growing concerns for the western countries that realised grip over Africa has been steadily slipping into Chinese hands.

The Beijing summit had culminated into the commercial deals worth $1.9 billion with the African countries and eventually China offered credit lines worth $5 billion. It also declared that it would double aid to Africa by 2009 and pledged to push trade to the USD 100 billion mark by 2010.

Comparatively, India is a rather nervous investor in Africa in all sectors comprising petroleum. Over the past few years, China has managed to edge India out of many contracts. That must change. Indian companies must overcome its fear and lethargic way of dealing trade with foreign countries. They must go forward and forge aggressive step in their engagement with African nations for mutual advantage.

Very few countries in Africa are moving forward with development. Rest of the African countries has been sluggish in mobilizing private sector participation in infrastructure development.

What is significant here is Africa’s development can be accelerated with investments and technology transfer. It has plenty of natural resources comprising crude oil and minerals and the closer relations with the African continents will be proved beneficial for both the nations-India and Africa.

Africa’s demand for manufactured goods and services is on the elevated scale. The region also has millions of young literate and talented people who can be employed in the manufacturing and services sector.

As per the official sources, an Action Plan for furthering cooperation in areas like environment, health, education, energy and mining will be announced at the Summit, which could form a precursor for broader India-Africa Summit.

India has been having low-profile engagement with Africa for the last six decades mainly in terms of assistance in developmental projects and peacekeeping operations. Now the apt time has arrived for the country to grow financial relations with the African countries and Indian companies need to expand their presence overseas, step up and diversify trade with Africa.

Jairam Ramesh, India’s Minister of State for Commerce will visit Africa in March with a trade delegation. The focus will be on collaboration in diamond production and polishing. He was quoted as saying:

“We will visit diamond producing countries of Namibia, South Africa, Botswana and Angola from March 21 to 28 and explore possibilities for partnership for the Indian diamond industry,” Ramesh said on the sidelines of Gems and Jewellery Export Promotion Council function on Friday.
The four African countries are emerging as the key diamond producing regions, with several global firms planning to set up polishing units in the region.
India has been a traditional cutting and polishing hub for diamonds and in return for the rough diamonds that it would import from the African countries, it would provide training in cutting and polishing as well as technical assistance to set up local units there, he said.

Lower freight rates between India and Africa provide an advantage to Indian agri exporters. The Economic Times reports

The low freight advantage that India enjoys over other Asian countries especially China, has boosted commodity exports to Africa. Also substantial quantities of maize and soybean meal have been contracted for exports to South East Asia and Middle East due to low freight costs.
“In addition to other benefits a big factor for trade with India are the low freight charges,” Samwel E Dyelu, the general manager of a Tanzania based company told ET. Citing an example he said, a 20 ft container from China to Africa attracts a freight charge of $2000 while a container being imported from Mauritius would cost around $1000. The Indian freight cost should be around the Mauritius figure, he said.

…

The commodities that are now been imported by the African countries include meat, eggs, processed food, non basmati rice and milk powder. “Earlier China had the price advantage but now with increase in freight cost it is losing its share to Indian products which are better in quality,” Agricultural and Processed Food Products Export Development Authority (APEDA) director S Dave said.

 

Meanwhile talks are on for a possible free trade pact between India and the five member Southern African Customs Union (SACU). See report.