India_Africa_Trade_Presentation JNU.pptx

India Africa trade over the years and prospects for future engagement

1. Fostering Economic Synergies: India-Africa Trade & Investment Relations Dr. B K Pandey Professor of Practice Arun Jaitley National Institute of Financial Management(AJNIFM) Ms Areeba Furqan , Research Associate, AJNIFM

2. O bjective of the Paper • Analyze sectoral composition and trends of India-Africa trade • Evaluate the trend in FDI in Africa with special reference to the role of Indian investments in Africa’s economic growth • Assess the influence of trade agreements and development cooperation initiatives between Africa and India. Future Roadmap

3. Methodology Quantitative and Qualitative analysis of trade and investment flows Analysis o f key initiatives ( FDI flows, IAFS, AfCFTA, Line of Credit)

4. India Africa Trade • Historical background and strategic importance • Growth in trade from $10 billion (2000) to $100 billion (2024) • Key sectors: Energy, minerals, pharmaceuticals, agriculture

5. Trade Overview • India among Africa’s top five trading partners • India’s exports: Machinery, chemicals, textiles • Africa’s exports: Oil, minerals, agricultural commodities • Key trade partners: South Africa, Nigeria, Kenya, Egypt • Imports by India from Africa: Crude oil, gold, coal, diamonds, edible oils • Exports from India to Africa: Pharmaceuticals, automobiles, textiles, machinery, cereals

6. Trade Growth

7. Key Trade Agreements • Duty-Free Tariff Preference (DFTP) Scheme • India-Mauritius Comprehensive Economic Partnership Agreement (CEPA) • Preferential Trade Agreement (PTA) negotiations with SACU (ongoing)

8. Imports from Africa: Major countries Import by India from Africa (Million $US) 2014 to 2024 Country 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 22-23 23-24 Nigeria 14,383 8,402 6,273 7,321 8,402 8,264 5,010 7,789 8,003 5,072 South Africa 3,756 3,278 3,227 4,166 4,493 4,127 3,217 4,284 5,137 5,051 Angola 4,507 3,450 1,949 2,890 3,755 3,451 1,626 3,060 5,076 2,314 Ghana 812 2,352 1,558 2,689 3,670 2,380 1,336 1,688 1,178 Egypt 1,923 892 644 899 1,145 1,505 1,397 2,047 2,017 1,175 Morocco 867 878 758 663 1,102 855 1,191 1,807 2,695 1,218 Botswana 1,167 780 1,115 1,163 1,321 1,122 893 1,278 1,257 674 Tanzania 1,255 1,149 753 980 728 856 521 1,009 1,179 1,554 Mozambique 388 327 676 1,622 1,436 804 423 803 1,780 1,294 Equatorial Guinea 716 420 909 605 628 963 357 855 855 174 Total Import from Africa by India 33,485 25,516 20,426 26,279 30,459 28,954 16,883 28,081 34,987 23,441 Import from Top Countries by India 29,774 21,929 17,862 22,999 26,680 24,327 14,635 24,267 29,688 19,705 % 89% 86% 87% 88% 88% 84% 87% 86% 85% 84%   Source: ITC Trade Map, based on UN Comtrade

9. Export from India to Africa Export from India to Africa (Million $US) 2014 to 2023 Country 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 22-23 23-24 South Africa 4,543 4,237 3,175 3,921 3,875 4,329 3,571 5,351 8,360 7,478 Nigeria 2,664 2,065 1,838 1,410 1,908 5,705 4,210 4,632 4,795 4,870 Egypt 2,472 2,324 2,187 2,342 2,318 2,840 2,641 3,232 4,093 3,228 Kenya 3,008 2,578 2,026 1,648 1,830 1,706 1,772 2,107 2,123 1,929 Ethiopia 1,056 1,151 1,302 1,091 1,201 1,340 1,489 2,404 2,365 1,636 Tanzania 2,454 1,259 1,090 1,152 1,218 1,262 1,084 1,210 1,961 1,949 Uganda 1,490 1,154 835 736 817 855 959 1,051 1,161 1,256 Morocco 508 400 634 617 703 1,159 676 1,070 1,378 1,481 Mauritius 1,212 811 768 823 1,028 776 405 808 643 645 Ghana 996 852 528 633 674 582 1,034 959 1,057 Cote d'Ivoire 553 371 374 455 500 453 539 859 936 982 Total Export to Africa from India 27,693 23,161 21,040 21,308 22,037 26,995 23,221 32,925 38,786 36,201 Export to Top African Countries from India 20,403 16,832 14,381 14,374 15,571 20,555 16,808 22,899 27,839 25,530 Top 10% 74% 73% 68% 67% 71% 76% 72% 70% 72% 71%   Source: ITC Trade Map, based on UN Comtrade

10. Fluctuating Trend in FDI in Africa

11. FDI Trends in Africa Growth from $2.8 billion (1990) to $82.2 billion (2021) to 52.63 (2023). Steady rise until the 2008 financial crisis. Flattening of trend post-2008. 2023 figures 26% below 2021 peak. Outward FDI from Africa Comparatively small Inward FDI Stock Growth Surge from $60 billion (1990) to over $1 trillion (2022). Africa’s Share of Global FDI is fluctating fluctuating from, 1.4% in 1990, 2021: 5.4% of global FDI inflow, 3.95% in 2023 Inward FDI stock around 2% of global total. • Key FDI destinations: Egypt, South Africa, Mozambique, Nigeria, Uganda

12. FDI INFLOW TO AFRICA According to the UNCTAD 2024 World Investment Report, the top countries sending FDI to Africa include T he UK, the US, China, countries of the EU including Germany and France, Singapore and India The main receivers of FDI in Africa measured as the share of a country’s inward FDI stock in total inward FDI stock in Africa in 2022 are the following 10 countries (as a percentage of the total): South Africa (16.5%), Egypt (14.2%), Nigeria (8.6%), Morocco (6.8%), Mozambique (4.9%), Ghana (4.1%), Tunisia (3.8%), Algeria (3.3%), Congo (3.2%) and Ethiopia (3.1%), based on UNCTAD’s FDI database.

13. Sector-wise Distribution of FDI (2023) Manufacturing: 48% (largest share). Financial services: 26%. Agriculture and mining: 18%. Other sectors include construction, electricity, gas, water, transport, and communication.

14. Indias outward direct investment Country India Outward Direct Investment Position ($ million) Mauritius 9,286.6 South Africa 524.0 Nigeria 365.8 Gabon 338.4 Kenya 265.2 Libya 227.1 Morocco 218.3 Zambia 204.4 Uganda 154.4 Botswana 62.1 Zimbabwe 51.8 Ghana 24.9 Cameroon 16.3 Senegal 15.8 Tunisia 13.1 Mali 11.8 Namibia 6.7 Algeria 5.4 Rwanda 4.5 Sudan 4.5 Seychelles 2.5 Benin 1.8 Burkina Faso 0.1 Malawi 0.1 Angola 0.0 Burundi 0.0 Cabo Verde 0.0 Chad 0.0 Djibouti 0.0 Guinea 0.0 Guinea-Bissau 0.0 Liberia 0.0 Niger 0.0 Sierra Leone 0.0 Somalia 0.0 Togo 0.0 Total Africa 5.4

15. India's Foreign Direct Investment (FDI) in Africa

16. Key Highlights of India-Africa Investment Indian FDI in Africa saw significant growth over the years. Peak investment in 2015: $19.8 billion. In 2022: $13.8 billion, accounting for 12.6% of India's total outward FDI. India-Africa Forum Summit (IAFS) & Line of Credit (LoC) programs support development Key investment areas: Infrastructure, Energy, Manufacturing, Banking, Agriculture FDI to Africa rebounded by 113% in 2021 (US$ 83 billion), with India playing a crucial role Trade Complementarity Index (TCI) rose to 71.7% in 2021 , highlighting growing collaboration Cumulative Indian investments: $70 billion Lines of Credit (LoCs): US$ 12.26 Billion extended Mauritius as a strategic investment hub (40% of India’s ODI)

17. Key Recipient Countries (2022) Mauritius: $9.3 billion (67% of India's total FDI in Africa). Historically the largest recipient of Indian FDI. Share of India's FDI in Africa through Mauritius declined from 83.2% (2015) to 67% (2022). Key sectors: financial services and manufacturi South Africa: $524 million. Nigeria: $366 million. Gabon: $338 million. Kenya: $265 million. Other recipients: Libya, Morocco, Zambia, Uganda, Botswana, Zimbabwe, and Ghana.

18. Opportunities for Future Growth Leveraging AfCFTA to enhance intra-African trade & regional integration. Expanding collaboration in healthcare, digital innovation, and sustainable industries. Strengthening ease of doing business and governance frameworks.

19. Challenges in India-Africa Economic Relations Regulatory barriers & trade imbalances , Political instability, regulatory barriers, commodity dependency Over-reliance on commodity-based exports in Africa. Infrastructure & governance challenges limiting FDI.

20. Strategic Roadmap for India Promote technology transfer & industrialization in Africa. Support economic diversification beyond commodity-driven sectors. Expand FDI & trade footprint in emerging African markets.

21. Future Prospects • Enhancing investment climate and ease of doing business • Leveraging AfCFTA for deeper economic integration • Promoting sustainable development & economic diversification

22. Thank you