Page last updated at 17:41 GMT, Sunday, 6 April 2008 18:41 UK

India to court Africa for business

Karishma Vaswani
By Karishma Vaswani
India business correspondent, BBC News, Delhi

At the external affairs ministry in Delhi, preparations are underway for what many are saying is India's most important diplomatic event this year - the India-Africa summit which kicks off this week.

Delhi street
Leaders will be gathering in Delhi for the first India-Africa summit

It is expected that the leaders of 14 African nations will be attending the summit.

It's an impressive line-up of African leaders.

Amongst them is South African President Thabo Mbeki, Ugandan President Yoweri Kaguta Museveni, Tanzanian President Jakaya Mrisho Kikwete and Algerian President Abdelaziz Bouteflika.

Also present will be the Democratic Republic of Congo President Joseph Kabila Kabange and Ethiopia's Prime Minister Meles Zenawi.

It is the first India-Africa summit - a historical forum that no doubt India will use as an attempt to balance the growing influence of China in Africa.

Historical ties

But India's leaders are keen to stress that this is not just an opportunity to build up business ties between India and Africa.

Anand Sharma, India's minister of state for external affairs, says that the summit is more a way for India and Africa to strengthen their historical ties and work together in the future as partners.

"India and Africa have always shared a long history", he tells me as he shows me old photographs of Indian leaders and African leaders over the years.

"India has always supported Africa's freedom movements throughout the years - and we will continue to be a partner now in Africa's economic development as it emerges as a rising economic power."

What Mr Sharma is talking about, is the relationship that was cultivated between India and Africa through Mohandas Karamchand Gandhi, the man who led India out of British colonial rule over 50 years ago.

Many Africans revere Gandhi as much as Indians do - Gandhi famously first ruffled British feathers in South Africa by staging a civil disobedience movement to fight segregationist laws against the Indian diaspora.

A few decades after that, African-American civil rights leader, Martin Luther King drew from the writings of Gandhi in the development of his own theories about using non-violence as a method to bring equal rights to African-Americans.

Common aims

Apart from their shared affection for the Indian leader, Africa and India also share a common desire to lift millions in their populous countries out of poverty.

Poor children in India
Both India and Africa face the common concern of poverty

Many African countries face the same problems as India does regarding health and education.

Already both regions are working together on a number of projects.

One of India's busiest airports, Mumbai International Airport, is being modernised in a billion dollar joint venture between India's GVK group and the Airports Company of South Africa.

Many wondered why an Indian and African firm would tie up to build an airport.

But South Africa's economy has gone through some of the challenges facing India. The South African Airports Operator hopes this will turn into a partnership of profit.

Connie Muller was sent to India from South Africa two years ago, to help provide expertise on behalf of the South African airports firm as part of its involvement in the Mumbai airports project.

"There's a lot of similarities between what India's airports are going through and what we went through in South Africa," he tells me while giving me a tour, showing me technical aspects that the South Africans have put in place at Mumbai airport.

"A foreign partner joined us in our transformation of our own airports - and we saw how much that partner was able to benefit financially in the long run."

European link

Its not just African companies that want to invest in India.

Indian firms have been making their forays into the African continent for some time.

Indian water pump maker Kirloskars for example has been providing African nations with water pumps that help African farmers irrigate their land, so that they're not dependent on volatile rainfall for their crops to grow.

It sold 75 million dollars worth of water pumps to African nations in the last 3 years, and hopes to see 300 million dollars worth of business this year alone.

But it hasn't always been easy to get into Africa.

"Africa has always been closer to Europe", says managing director of the firm Sanjay Kirloskar.

"It's only natural that countries that have not been used to trading with India will take some time to be convinced of doing business with Indian firms.

"But once you convince African countries of the value that your product can bring to their people, and you show them that your price is also extremely competitive by European standards, then they are convinced."

"It's up to us really."

Natural resources

But while businesses in both regions are looking for opportunities to invest in each other's nations, the Indian government is especially keen to access African oil.

It is estimated that Africa has $30bn worth of untapped oil and gas assets.

Oil platform in Nigeria
India is especially interested in Africa's untapped energy resources

India and China are locked in a fierce battle to get to these resources.

Recently India's state run oil and gas firm ONGC competed with China for 2 oil blocks in Africa - but lost.

According to RS Sharma, the firm's chairman, ONGC's bid was initially the highest of any of the bidders.

"Subsequently we learned that the Chinese agreed to match our bid - and offered to put in more money to help build some infrastructure in that African country.

"So as a result we lost."

The competition to get into Africa to gain access to its resources is intensifying.

Africa is quickly emerging as the world's new oil hub - and India is keen to ensure that it has a say in who gets a chance to participate in the country's commodities boom.

Economic partners

At the summit this week, India is expected to try to court African leaders with its expertise in areas including technology, IT and education.

But African officials say whether it is China or India - investment in Africa has to be for the long term.

"Africa is no longer interested in economic partners who have a colonial mindset, or are looking just to exploit our natural resources," says Francois Moloi, the South African High Commissioner to India.

"We want investment in our nation, and we welcome economic partners - but it is also about developing a partner for the long term... not just to have companies or countries come in and raid our country and then leave."

"That, we don't want."

India will be keen to stress what an able partner it can be in Africa's economic development.

India is desperate to beat China in the race to win over the continent.

But any victory will be hard won - investment in Africa will now be on African terms.

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