Growing Indian presence in Africa

As part of its drive to grow and amass ever greater profits, the Indian big bourgeoisie is expanding its reach abroad as well as within the country. It is seeking new markets, sources of energy, minerals and raw materials, as well as profitable fields for investment of its capital.  One of the areas where it is expanding its presence most dramatically in recent years is the resource-rich continent of Africa.

For many years, the Indian state had political ties with select African states and leaders based on the Non-Aligned Movement, but the Indian ruling class as a whole showed very little interest in developing trade and economic ties with Africa, which it considered a “backward” region. This began to change only in the last few years with the collapse of the economic partnership with the Soviet Union and former socialist bloc, the growth of the Indian big bourgeoisie in the context of globalisation and liberalisation, as well as the fear of China rapidly increasing its presence in Africa.

Whereas China began to pay serious attention to forging economic and other ties with African countries from the late 1990s, the Indian state and big bourgeoisie began to do so from about 2004.  China is now Africa’s 3rd largest trading partner, with a volume of trade of $50 billion, while India’s trade with Africa has increased from $5 billion to $25 billion in just 5 years.  Currently, Indian official investment in Africa is more than $2 billion, while private investment is more than $5 billion.

After China hosted a massive, 40 country Africa Summit in Beijing in 2006, the Indian government hosted its own India-Africa Forum meeting in Delhi in April 2008.  In this summit, the Indian government extended credit worth $5.4 billion to the region for a period of four years. The projects in which India is involved include rural electrification in Mozambique and Ethiopia, an IT training centre in Lesotho, railways in Senegal and Mali, a cement factory in the Congo, as well as the construction of the National Assembly complex in Ghana and military barracks in Sierra Leone.

The summit meeting in 2008 has been followed up by a 3-country visit to southern Africa by Vice-President Hamid Ansari in January of this year, the first visit by a high-level Indian functionary to this part of the world in more than two decades. During the course of this visit, further lines of credit for various projects were extended to Zambia, Malawi and Botswana. The condition for the credit is that 85% of the material and equipment for these projects has to be sourced from India.  Thus, a growing market for the goods of big Indian companies has been ensured. The Indian state is particularly interested in Malawi’s rich uranium reserves, as well as Botswana’s diamonds for the diamond-cutting industry in Surat.

Big Indian capitalists have been active in extending their operations in Africa.  Among the biggest is the Tata group, which has a presence in 14 countries in areas such as transportation, telecommunications, hydro power and the hotel business, and investments over $1.6 billion.  The pharmaceutical giant Cipla, Vijay Mallya’s UB Group, Mahindra and Mahindra, Kirloskar, and Dr Reddy’s are some of the other big private players in Africa.

Just like China, a major concern of Indian companies is to snap up the rich mineral and metal deposits and energy sources in different parts of Africa.  Vedanta Resources is investing $1 billion in Zambia’s biggest copper mine, while state-owned ONGC has captured oil fields in Nigeria, Angola and Sudan.

A new and revealing area of investment by Indian companies in Africa is agriculture. They have purchased hundreds of thousands of hectares in Ethiopia, Kenya, Madagascar, Senegal and Mozambique. These farms are used to grow rice, sugar cane, maize, lentils palm oil, vegetables and other crops both for sale back in India or for export to third countries.  In Ethiopia alone, more than 80 Indian companies have invested an estimated £1.5 billion in buying huge plantations. in Ethiopia. The largest among them is the Bangalore-based Karuturi Global, which has purchased nearly 350,000 hectares for what it calls the world’s largest “agricultural land-bank”!  Serious concerns have been voiced at what is being called “food piracy”, which can lead to large-scale expulsion of local farmers from their lands and devastating food shortages in those countries.

In the context of this growing interest in the exploitation of Africa’s resources and in the African market, Indian officials and media are beginning to talk in glowing terms of a revival of India’s age-old commercial and civilisational ties with Africa. However, it must be remembered that these relations, when deemed exploitative by the peoples of Africa in the past – as they were in the colonial period – have led to great resentment and anger against India and Indians. Already, in some places in Africa, there have been riots and measures taken against Chinese companies which have been considered to have been taking advantage of the countries in which they were operating. Given the aggressive profit-seeking motives of the Indian big capitalists in Africa, this can be one result of the current Indian expansion in Africa.

The growing interest shown in Africa recently by the Indian state and the Indian big bourgeoisie has nothing to do with building friendly relations with the peoples of Africa. Africa is being viewed as a new frontier for exploitation by the monopoly capitalists in India who are striving to become big players in the global capitalist system of exploitation.


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growth    farms    Senegal    Madagascar    Kenya    China    exploitation    oppression    profits    Mar 16-31 2010    World/Geopolitics    Economy    

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