India's service industry is the most significant contributor to the country's economy and accounts for over 50 per cent of the GDP.^[1] In the financial year 2022-23, India's service sector witnessed a Year-on-Year (YoY) growth of 8.4 per cent compared to a contraction of 7.8 per cent in the previous financial year of 2021-22.^[2] Similarly, India's services export rose by 42 per cent to USD 322.72 billion in 2022-23 from USD 254 billion in 2021-22. And in the coming year 2023-24, it is expected to grow at 9.1 per cent to cross USD 400 billion.^[3] Travel, transport, telecommunications, computers, information services, medical and other business services occupied the major share in the service export basket.^[4]

Despite multiple challenges and concerns of a global recession followed by the pandemic and the Ukraine crisis, India has set services export target of $400 billion for the current fiscal year. This is a lofty target, primarily contingent upon the post-pandemic recovery that some key industries, like tourism, hospitality, and entertainment, are expected to undergo. Be that as it may, this aligns well with the Government of India's goal of exporting 1 trillion dollars of goods and services by 2027.^[5]

As India lays a roadmap for this target, Africa could become a sustainable importer of Indian services. Most of India's exports to Africa currently consist of IT and ITES, but the future appears promising, particularly for two more services: management consulting and engineering consulting. India has a lot of potential to provide management and engineering services in Africa. Considering strong similarities in social and economic conditions between India and Africa, the latter can gain a great deal from inexpensive Indian services pertinent to the African situation. Additionally, the Indian service sector excels at adaptation and quick learning, essential for success in Africa.

Africa is the second largest recipient of Indian Lines of Credit (LoCs), accounting for more than 40 percent of the total LOCs.^[6] So far, India has extended 195 lines of credit (LoCs) worth $12 billion, covering as many as 357 projects in 42 African nations.^[7] With steady growth in Indian investment in Africa and India-assisted projects under LOCs, there is a strong argument in favour of increasing the involvement of Indian consultancy services and consultants for project management and execution in Africa. This becomes more important as many proposed projects from African sides lack adequate technical and other details. Due to the lack of those details, many recent projects got rejected.

Indeed, many funds are available to Africa from various multilateral donors, but many of these funds remain unused due to a lack of bankable projects. For example, as per Mr Mukul Sarkar, Chief General Manager, India Exim Bank, out of India's $32 billion commitment for Africa, more than $10 billion remain unused. Given India's knowledge and exposure in specialised areas, African sides can use Indian consultancy services to reap the benefits of these funds.

Indian consultancies can help Africa to develop those projects properly, particularly in flawless preparation of the Detailed Project Report (DPR). Value-added consultation services are also necessary for the exploration of prospects, the creation of feasibility studies, as well as the creation of time-bound action plans that can hasten project execution. Reducing start and finish line delays will help in preventing an increase in project expenses. Indeed, considering the excellent expertise of Indian consulting services in the continent's commercial and social background, they need to be encouraged and prodded hard to intensify their activity in Africa.

As a matter of fact, technical consultancy is already an essential pillar of India's development cooperation with Africa. The ITEC programme covers consultancy services and feasibility studies as one core component. During the ITEC application process, the consultancy process gets started when the partner country submits a request under ITEC outlining its specific requirements and clarifying the roles and obligations of both parties.

Some of the areas where African countries can benefit the most from Indian consultancy are:-

• Encourage research and facilitate networking
• Accelerate initiatives promoting the transformation of various trade and business relations between India and African nations
• Combat cybercrime and aid Indo-African exchange initiatives
• Form a consortium of various exchange programmes for top ICT students, ICT investors, and scholars
• Projects involving development cooperation, infrastructure, and institutional connectivity
• Improving partnerships between people and skills

Indian consultancies have recently offered their skills to various African nations in diverse fields, including information technology, auditing, legal matters, agriculture, Ayurveda, statistics, demography, public administration, and textiles. Numerous nations have also used the expertise of defence specialists. Results of feasibility studies and consulting services performed at partner countries' request are provided to the relevant governments free of charge to utilise as they see fit.

There are plenty of examples where Indian consultancy services successfully established and served the local population in Africa. Prominent software companies, including Tata Consultancy Services, Infosys, Tech Mahindra, and Wipro, have all setup offices in Africa to cater to outsourced clients in Europe and West Asia. They accomplish this by deploying low-cost models in strategically located delivery centres. While South Africa, Nigeria, Egypt, Kenya, and Ghana account for the majority of ICT spending in Africa, certain Indian ICT companies have also invested in Ethiopia, Uganda, and Malawi.

The increased need for ICT in Africa, the expansion of the urban middle class on the continent, and the increased involvement of multinational firms in industries like manufacturing, communications, and natural resources—all of which require IT support services—are driving these investments. Enterprises specialising in mobile technology, e-governance, social media and skill development have been particularly effective in winning business from Indian entrepreneurs' low-budget, innovative business strategies.

In 2020, the NABARD Consultancy Services (NABCONS) provided consulting services to Africa when it undertook a feasibility study for the India-Africa Institute of Agriculture and Rural Development in Malawi (IAIARD).^[8] In this project, NABCONS is set to work with IAIARD to create training programmes for, among other things, microfinance and agro finance. For an initial three-year period, the Government of India will cover all costs associated with hiring teachers from India as well as travel, logistics, and training course costs for students from other African nations.

Another Delhi-based company, Telecoms Consultants India Ltd. (TCIL), has most recently served as a consultant on projects, including privatising telecommunications in African nations. The Pan African e-network Project (PAENP) was implemented with the help of TCIL, which designed the complete network solution, bought the services and equipment, installed, tested, commissioned, ran, and maintained the network, as well as offered tele-education and tele-medicine services to 53 AU member nations by creating 170 Virtual classroom in African countries. ^[9] Under these projects, TCIL will, initially, extend free tele-education and tele-medicine courses to African students, doctors and paramedics, which may later be extended more on a self-sustainable model.

Another example is FICCI which has been assisting businesses and other groups in Kenya with capacity-building efforts and consulting in resource conservation since 2014. India has established itself as the African nation's top choice for consulting services, particularly agriculture.

Despite being Africa's second-largest trading partner, India's trade volume is still tiny compared to China, the continent's principal trading partner. In 2021, China represented about 20% of Africa's imports, compared to India's approximately 6% share.^[10] This gives a rare chance for the Indian technical consultant to significantly contribute to the developmental aspirations of Africa, as Africa is forging its development path.

Today, Africa has emerged as a significant recipient of developmental funding from multilateral and regional funding agencies. The African consulting market is currently anticipated to be valued at over $2 billion, and it is expanding at a rate of roughly 5-7% annually. ^[11] Several elements, including the rising middle-class population in Africa, the expansion of African multinational corporations, and the growing demand from African firms for consulting services, are fuelling this increase.

Going forward, the government of India may consider developing a fund for consulting services proposal that would assist both public and private Indian consultancy organisations. India may also offer consulting services to those large projects where the Indian government loses out. Services export could also be handy, especially in resource-intensive countries. Instead of local currency financing or countertrade arrangements to finance goods, services export can support future repayments. India's service sector would also assist low-income countries in achieving their development goals. In recent times, several African countries have offered India the mining and export rights of lithium and cobalt as a part of their loan repayments.^[12]

As India assumed the G20 presidency, on 12–13 January 2023, India organised the virtual summit referred to as "Voice of the Global South Summit". Dubbed the most extensive digital conference of the Leaders and Ministers of the developing world, the primary objective of hosting this virtual meet for India was to consult developing countries not represented in G20 on their developmental priorities and what they expected India to achieve through its presidency. Over time, India transitioned from being a recipient to a donor nation. As it strives to claim its leadership role for developing countries, it is high time for India to impart its expertise and wisdom to Africa. And Indian consultancies need to play a more prominent role in this endeavour.

Refernces

^[1]Ministry of Finance. “Services contributed over 50% to GDP”. January 31, 2022. https://pib.gov.in/PressReleasePage.aspx?PRID=1793804
^[2]Ibid
^[3]The Economic Times. “Services exports may reach USD 400 bn during 2023-24: SEPC.”April 19, 2023. https://economictimes.indiatimes.com/news/economy/foreign-trade/services-exports-may-reach-usd-400-bn-during-2023-24-sepc/articleshow/99607290.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
^[4]Ibid
^[5]Anirban Chowdhury. “Services exports likely to touch $1 trillion 3 years before target”. Economic Times. March 21, 2022. https://economictimes.indiatimes.com/news/economy/foreign-trade/services-exports-likely-to-touch-1-trillion-3-years-before-target/articleshow/90299720.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
^[6]Sujan R Chinoy. “Covid-19 pandemic may create opportunities to deepen India’s engagement with Africa”. The Indian Express. May 29, 2020. https://indianexpress.com/article/opinion/columns/africa-day-india-coronavirus-covid-19-6432071/
^[7] “Future LoCs to Africa could cover defence, says EXIM Bank MD”. The Economic Times. June 16, 2023.
https://economictimes.indiatimes.com/industry/banking/finance/banking/indias-exim-bank-plans-to-step-up-funding-for-african-countries/articleshow/101024186.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
^[8] “Nabard Consultancy Services (NABCONS)”. Business Connect India. January 11, 2021. https://businessconnectindia.in/nabcons/
^[9]TCIL Brochure. https://www.tcil.net.in/brochure/tele-education.pdf
^[10]Sara Joy and Srejita Nandy. “India should leverage emerging markets to meet export target of $2 trillion”. CNBC TV18. October 13, 2022. https://www.cnbctv18.com/economy/india-leverage-emerging-markets-africa-to-meet-export-target-of-us-2-trillion-14931931.htm
^[11]Helene Laffitte. “The African Consulting Industry 2022: A Comprehensive Guide”. Consulting Quest. June 6, 2022. https://consultingquest.com/insights/the-african-consulting-industry/
^[12]Subhash Narayan “African countries offer India lithium access to repay loans”. The Mint. August 26, 2022. https://www.livemint.com/economy/african-nations-offer-india-lithium-as-repayment-for-aid-11661444209410.html

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