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Source: This post is created based on the article “The win-win potential of India’s partnership with African nations” published in Live Mint on 19th July 2022.
Syllabus: GS Paper 2 –International Relations – Bilateral and Multilateral relation of India
News: The African Continental Free Trade Area (AfCFTA) has the potential to create the largest free trade area in the world, by geography.
India and Africa share a long and rich relationship. Our freedom movement became an inspiration for African nationalists in their desire for independence from colonialism. Now African Continental Free Trade Area (AfCFTA) will strengthen trade and investment relations between India and Africa.
India’s present engagement in developmental activities of Africa
India has already been involved in several developmental projects in Africa via concessional loans, grants, and capacity-building programs. It has played a significant role in Africa’s socio-economic development.
India’s cumulative investments in Africa stand at $70 billion.
Lines of Credit (LoCs) worth $12.26 billion have been extended to African countries.
193 projects have been completed and 66 are under execution. These projects related to oil and gas, mining, banking, pharma, textiles, the automotive sector, and agriculture.
Skill development and capacity building play a vital role in the empowerment of the youth and women. India has been engaged on this front as well. In 2017, under Indian Council for Cultural Relations, almost 50,000 scholarships had been granted to African students over five years. Indian Technical and Economic Cooperation program is assisting Africa in giving people opportunities to learn new skills and acquire knowledge through training programs.
What is the significance of the African Continental Free Trade Area (AfCFTA)?
AfCFTA provides a wide scope to create the largest free trade area in the world, by geography, and an opportunity to lift 30 million people out of extreme poverty.
It will create a single market for goods and services, thereby enabling a single market for goods and services, easy movement of persons, and promoting industrial development.
India can leverage the new opportunities presented by the AfCFTA. India can facilitate a digital transformation of Africa through innovation and the transfer of technology.
The 17th Confederation of Indian Industry Exim Bank Conclave on the India Africa Growth Partnership has marked the following priority areas to focus on:
Indian industries could align their efforts with the priority areas set by a free trade agreement. It will promote India-Africa bilateral trade and investment under AfCFTA.
There are opportunities in services trade with Africa in the fields of Information Technology (IT), Mobile payment solutions, banking, and financial services.
India’s success in manufacturing vaccines and pharmaceuticals, and advances in telemedicine, can open up new opportunities in the pharmaceuticals and the healthcare sector.
India is the world’s third-largest startup ecosystem. Thus, it could count on its strengths to fortify the digital infrastructure of an entire continent, thereby contributing to the achievement of the continent’s Agenda 2063.
The AfCFTA seeks to facilitate international supply chains for food, pharmaceuticals, and various other essential products. India can help in building important infrastructure for cross-border supply chains. It will help Indian industries to operate efficiently in Africa.
Women consist of 90% of Africa’s labor force in the informal sector, engaged mainly in education, healthcare, and tertiary services. Under the AfCFTA these women-oriented developmental sectors will get a boost. India’s efforts on this part would enhance its brand image across the continent as its economy emerges.
