Export-Import Bank of India (Exim Bank)’s recent publication on “Enhancing India’s Trade Relations with Africa: Focus on Select Countries” was released at the hands of Dr. Arvind Mayaram, Secretary, Department of Economic Affairs, Ministry of Finance, Government of India during the India-Africa Partnership Day, jointly organized by Exim Bank and Federation of Indian Chambers of Commerce and Industry (FICCI), in Marrakech, Morocco on May 30, 2013, as part of the Annual Meeting of African Development Bank Group. The event was organized with the objective of sharing India’s developmental experiences with Africa, particularly in Public-Private Partnership.
Exim Bank’s latest study highlights that the two-way trade between India and Africa has witnessed a robust 12-folds rise from US$ 5.2 billion (2001) to US$ 63 billion (2011). Underlying this trade growth is the significant rise in Africa’s trade balance with India, from a deficit of US$ 0.4 bn in 2001, to a trade surplus of US$ 16.4 bn in 2011. While India has emerged as the third largest export destination for Africa, India however, ranks as the fifth largest source for Africa’s imports, highlighting the potential for further enhancing Africa’s imports from India.
Potential to enhance India’s imports to Africa can be assessed from the fact that, despite the increasing trend in India’s exports to Africa, India’s share in the import basket of major importers in Africa is still marginal. For instance India accounts for a marginal 1.7% share in Algeria’s total imports in 2011; 3% share in Angola’s total imports; 3.6% share in Egypt’s total imports; 1% share in Morocco’s total imports, 4.3% share in South Africa’s total imports, and 3.4% share in Nigeria’s total imports.
The study draws attention to the fact that with a view to balancing the burgeoning trade gap between India and Africa, there is need for increased focus on India’s export potential to the major countries in Africa with which India maintains the largest and rising trade deficit as also to potential countries in Africa, based on projected growth of imports, projected growth of GDP and size of the market.
To enhance India’s exports to Africa, while also addressing the issue of rising trade deficit, Exim Bank’s study attempts to identify potential focus items for increased exports to select countries in Africa, based on India’s export capability and import demand in focus countries, up to the 6-digit level of HS commodity code classification.