Interaction with Shri Dammu Ravi, Secretary, Economic Relations, Ministry of External Affairs

On 28th November 2022, VIF organised its 2nd Africa Expert Group meeting. Shri Dammu Ravi, Secretary Economic Relations, Ministry of External Affairs, was the key speaker at the meeting. During the meeting, Mr Ravi gave a brief overview of the contours of India-Africa relations and interacted with the experts.

Secretary Dammu Ravi, in his address to the VIF Expert Group, appreciated VIF for creating this much-needed Africa Expert Group. He also congratulated Amb Rajiv Bhatia and Amb Gurjit Singh as both wrote an excellent book each on India and Africa relations last year. In economic diplomacy, he mentioned that while China occupies about 35 per cent of the overall relationship, India has only a five per cent share of the African trade. China has invested about USD 870 billion in Africa, while Indian investment is between 45 to 60 billion. While the difference is stark, he emphasised the importance of understanding the whole canvas of the relationship without comparing it with China or any other country. Africa today is much different than what it was. The new Africa is much more aspirational and assertive. The new Africa wants more regional integration and partners in their journey without colonial or neo-colonial baggage.

Considering how to improve our engagements with Africa, we need to respond to the demands of the time. The Global Value Chain (GVC) concept has changed the perceptions of how trade is conducted. Accordingly, India may consider establishing manufacturing bases across Africa instead of focussing only on the flow of goods. This will qualify the products as local; create local employment earning India some goodwill. In the meantime, this will also boost India’s make-in-India mission. Instead of procuring raw materials from Africa, importing them to India and then manufacturing some goods, India may consider producing directly in Africa and exporting around the globe. France has been doing this successfully over the years. Countries like Uganda, Ethiopia, and Tanzania have already shown interest in setting up manufacturing hubs in their countries. India may also think of clusters where India can set up its 4-5 bases in North, East, West and South Africa with port facilities and serve the whole region from that base.

The currency swap is another idea that India may consider seriously. Invoicing in rupees would be a game changer for the India-Africa trade. CII and FICCI would play an important role in raising awareness regarding the process. India has already done this with Russia and, therefore, could be replicated, even in a better way. Countries like Nigeria and Sudan are keen to make this happen. But they need more clarity on the process. As a matter of fact, China does all their credit projects in Yuan.

India has a total commitment of 32 billion LoC, of which 16 billion goes to Africa. There are 600 committed projects, out of which 300 are already completed. However, there are challenges such as Indian LoCs being expensive, quality is not always certain, and the sub-contracting process is not so transparent. And the biggest challenge of LoC is the increasing inability of African countries to repay their debts. Using rupees and attaching certain conditions related to the procurement of raw materials etc., could help to minimise this challenge. Public sectors will need support to grow as global companies in all these. They can take the support of the private sector or even the Indian diaspora.

ITEC scholarship has been incrementally increasing for years. But the time has come to reform it. The greater value would be that India can open some educational institutes instead of giving some scholarships. Indian agriculture education institutions, medical colleges, engineering institutes etc, will have a lot of demand in Africa. Many Indian students go to Europe to study in their medical colleges. Some of the students can be diverted to Africa and thus creating a win-win situation. IIT Chennai will soon open an offshore campus in Tanzania, which can be a hub for technology education in Africa. More similar models need to be explored. The north-South partnership can be more helpful in this regard.

There are complaints regarding the treatment of African students who come to India to study. MEA is working with other government departments to give one extra year to African students where they can work or do some internship. This would also help India to create a trained workforce across the continent, and going forward, they can be absorbed in different Indian companies working in those respective countries. Concerning the India Africa Forum Summit, the Indian government is planning to hold it sometime in early 2023. India would also consider if India can facilitate the entry of the African Union (AU) into the G20. This would give a great impetus to India’s strong relationship with Africa.

Secretary MEA’s address was followed by some active interactions where every member made observations and asked specific questions to the Secretary. Secretary noted all the concerns and assured the group of the actions to enhance India’s Africa outreach. He facilitated the group and requested them to bring out a policy paper focusing on both IAFS IV and the upcoming G20. This would be useful for Indian policymakers to prepare for those meetings.