India starts trade talks with African countries in effort to rival China

David Smith in Johannesburg
Monday 23 May 2011 16.29 BST

The Indian prime minister arrives in Ethiopia to bolster economic and political links in a new 'scramble for Africa'

India's prime minister and dozens of business leaders began trade talks in Ethiopia on Monday as the Asian giant strives to catch up with China in what has been dubbed "the new scramble for Africa".

Manmohan Singh received a red-carpet welcome as he led a delegation to the India-Africa summit in Addis Ababa, aiming to trumpet historical and cultural links with the continent in an effort to emerge from Beijing's shadow.

"The India-Africa partnership rests on three pillars of capacity building and skill transfer, trade and infrastructure development," said Singh at the start of the six-day trip to Ethiopia and Tanzania. "Africa is emerging as a new growth pole of the world, while India is on a path of sustained and rapid economic development." The trade meeting is to be attended by 15 African leaders. On its fringes was an India show comprising business seminars, cultural projects and a trade exhibition.

Bilateral India-Africa trade has grown from about £620m in 2001 to £28.5bn in 2010. India's commerce and industry minister, Anand Sharma, hopes it will reach £43bn by 2012. Some 250 Indian companies have invested, mainly in telecommunications and chemical and mining companies.

But India remains about a decade behind its Asian rival. China says its two-way trade stands at £75bn, a 43.5% increase on the previous year, and up from just £620m in 1992. It has built roads, bridges, railways and power stations in return for access to markets and resources.

Brahma Chellaney, professor at the New Delhi-based Centre for Policy Research, told Reuters: "India is massively playing catch-up to China in Africa, and only in recent years is it trying to engage the continent in a serious way. But it is trying to build political and economic ties, and position itself as different to China, which has acquired the image of being a new imperial power."

The fierce competition between the pair for resources, minerals and food to fuel their turbo-charged economies has been likened by commentators to the so-called scramble for Africa among European countries in the 19th century.

India is especially focused on energy. The country imports 70% of its oil and has turned to new suppliers such as Nigeria, Sudan and Angola to reduce its dependence on the Middle East. It also needs uranium for its ambitious civil nuclear programme.

India is also looking to Africa to expand its diplomatic influence, especially its bid for a seat on an expanded UN security council. Defence ties with African states bordering the Indian Ocean could boost the fight against terrorism and piracy.

India's wooing of Africa includes aid, technology and education, such as a new centre in Uganda to train businesses about global markets, a diamond processing facility in Botswana, and assistance to cotton farmers in four of the continent's poorest countries.

Officials in New Delhi stress that India's links with Africa are centuries old, bolstered by trade across the Indian Ocean and a million-strong Indian diaspora across Africa. Thousands of Africans have earned degrees from Indian universities and technological institutes on scholarships funded by the Indian government.

Shyamal Gupta of the Confederation of Indian Industry told Associated Press: "India is interested in Africa not just because of its resources. It is also actively participating in the economic development of Africa."

But, like China before it, India has been criticised for turning a blind eye to human rights abuses and corruption. Its state-owned oil company has invested in Sudanese oil, and New Delhi avoided criticising the Khartoum government at the height of the Darfur crisis.

Alex Vines, head of the Africa programme at the London-based thinktank Chatham House, which produced a report on India's engagement in Africa, said: "India has enjoyed less western scrutiny over its Africa policy than China. India's concern over Chinese expansion is acute and ever present. Its anxieties are not restricted to economic competition, but extend to security matters as well.