The world recognizes Africa’s enormous potential with its rich natural resources (energy, minerals and agriculture) and large population. . India has enjoyed close relations with many African countries (currently 54) over the centuries.
At present, the trade volume between Africa and India is about 90 billion US dollars, but the growth potential is huge. Agricultural trade in particular has been on solid footing for many years. Indian entrepreneurs have invested in some African countries, helping to create jobs and income there. However, considering the growth potential, business opportunities are not yet fully exploited.
Africa and India face some common features and challenges. Ensuring food and nutritional security for the broad population is a top priority. It turns out that global warming and climate change are a huge challenge for both. There is enormous scope for cooperation in building resilience to climate change.
Agriculture is plagued by smallholder farming, low input levels, low productivity, low levels of mechanization, and inefficient supply chains. Agricultural infrastructure also requires rapid modernization and investment to improve supply chain efficiency.
Turning specifically to agribusiness, India has strong bilateral trade in agricultural products with many African countries. Major Indian exports to Africa include rice, sugar, meat, dairy products, confectionery and beverages. India imports pulses, oilseeds, spices, coffee, cotton and raw cashews from Africa. India has close trade ties with countries such as Tanzania, Mozambique, Malawi, Uganda, Kenya, Ethiopia, Nigeria and Côte d’Ivoire.
To meet the domestic shortage of pulses, India has signed MoUs with Mozambique and Malawi to import pigeon peas (Tours/Alhar). Interestingly, given India’s Least Developed Country (LDC) status, imports from many African origins are duty-free in India. This helps to facilitate trade and support small farmers in Africa.
In a major development last year, India signed rupee payment agreements with as many as 18 countries around the world. Tanzania, Uganda, Kenya and Botswana are all on the list. Hence, invoices and payments will be in Rs. The Reserve Bank of India has issued a circular dated July 11, 2022.
India has its own advantages in the field of agriculture and has made remarkable progress in recent decades. Our farm R&D is arguably the best in the world. The domain expertise and skills of Indian scientists can be used to enhance African agriculture and related activities such as livestock and fisheries.
Joint research on agricultural inputs (seeds, agrochemicals, fertilizers, and water) is currently needed to improve the efficiency of input delivery and input utilization. Digitization will help.
While two-way trade in agricultural products will continue, Africa and India could form joint working groups to examine investment opportunities in processing and value addition. Investing in agricultural infrastructure—warehousing, logistics, e-marketplaces—is one area that offers opportunity.
Closer engagement between Africa and India will bring benefits to stakeholders on both sides – growers, processors, consumers, traders and service providers.
Excerpts from the author’s keynote address at the recent Africa-India Agribusiness Summit concluded in Dar es Salaam, Tanzania
