‘Africa needs to exploit India’s preferential trade agreements’

India’s Ministry of

Commerce has identified

four “missing links” to

building a strong trade

and investment relationship

between India and Africa.

“First,” said joint secretary

in the Ministry, Manoj

Dwivedi, “is the inability of

African countries to exploit the

preferential trade agreements

provided by India.”

There’s also a strong need for

capacity-building of small and

medium business enterprises

in Africa, while he believes

the use of technology would

help leapfrog development in

many sectors. “The inability of

Indian financial institutions to

push credit facilities to banks

in Africa is another major

concern,” Dwivedi said during

a panel discussion on Africa

and India trade cooperation at

the 52nd African Development

Bank (AfDB) meeting held in

Ahmedabad, India last month.

He added that the two parties

had made progress on a number

of other levels

and that the

rapid growth in

bilateral trade

flows had come

about because

both Indian

and African

governments

“have

systematically

brought down

the barriers to

seamless bilateral trade flows by

dismantling various tariff and

non-tariff barriers”. Dwivedi

added that the private sector

in both regions had been at the

helm of various trade promotion

and facilitation initiatives.

“It’s time to consolidate our

trade agreements, preferably

within trade blocs such as the

Economic Community of West

African States (Ecowas), the

Southern African Development

Community

(SADC) and the

East African

Community,

to ensure

improved

adoption of

preferential

trade

agreements,”

he commented,

noting that

only half the

countries offered duty-free

partnerships with India had

taken the opportunity.

According to research by

the AfDB”, India has steadily

opened up its markets to

African exports. The result is

that Africa’s trade surplus with

India has increased rapidly,

albeit largely driven by a

narrow range of suppliers and

commodities. Consequently,

the research shows that

India’s exports to Africa have

increased almost four-fold

from US$7 billion in 2005-

2006 to US $25 billion in

2015-2016, accounting for

9.5% share in India’s total

exports.

Conversely, India’s imports

from Africa increased sevenfold

from US$4.9 billion in

2005-2006 to US $31.7 billion

in 2015-2016, accounting for

8.3% share in India’s imports.

The country’s imports from

Africa grew at an annual

average of 29.8% during 2005-

2006 to 2015-2016, compared

to India’s exports to Africa that

grew at an annual average of

15.9% during the same period.

INSERT AND CAPTION

It’s time to

consolidate our trade

agreements.

– Manoj Dwivedi