India-Africa Trade Soars, Could Top $90B by 2015
Bilateral India-Africa trade has grown by nearly 32% annually between 2005 and 2011,including through the economic crisis, and is projected to reach $90 billion by 2015, according to a report from the Confederation of Indian Industry and World Trade Organization.
Even more importantly, Indian private investment in Africa has surged, with major investments having taken place in the telecommunications, IT, energy, and automobiles sectors.
Meanwhile African exports to India have been growing annually at 32.2% while Indian exports to Africa grew annually at 23.6%.
Some estimate the bilateral trade between the two countries could reach $176 billion by 2015 if annualised growth rates between 2001 and 2011 continue.
Also, African exports could touch upwards of $121 billion, assuming that India’s demand for African minerals and fuels remain unabated. India currently faces an energy deficit, and coupled with potential supply insecurity from other regions, Africa’s role as a supplier of minerals and fuels may intensify
in the short run. The continent now supplies around a fifth of India’s total crude oil imports – a figure that has risen from practically zero in 2005
At the 2nd India-Africa Forum Summit in 2011, India pledged to extend LOCs worth $5.4 billion until 2014 to support the developmental requirements of its African partners.
The triennial Summits, which began in 2008, are recognition of the growing importance of India-Africa ties where the highest leadership from India and African countries come together for a structured interaction on political and economic co-operation.
Currently, World Bank estimates put the percentage of the population in India living on less than $1.25 per day at 32.7% in 2011. In Africa this percentage is estimated at around 47.5%.
Together, nearly 900 million people in India and Africa live in extreme poverty – almost 70% of the worldwide total. Almost 20% more populous, India occupies just over 10% of the same land area as the 54 sovereign nations of the African continent.#
Marked disparities exist both within and between Africa’s nation states and India’s federal states.
Africa’s trade surplus with India is rising rapidly, albeit driven in large part by a narrow range of suppliers and commodities. The top six African exporters, viz., Nigeria, South Africa, Angola, Egypt, Algeria and Morocco account for 89% of total African exports by value to India thanks mainly to exports of oil and gas, ores and gold. In 2011, the top six had a trade surplus of over US$ 24.5 billion. If current rates of growth are sustained, Africa’s trade surplus could reach US$ 67 billion by 2015.