Lack of proper financing mechanism and poor infrastructure facilities are the major constraints to trade and investment between India and Africa, according to a report jointly released by the Confederation of Indian Industry (CII) and the World Trade Organization (WTO) here on Tuesday.
The trade between India and Africa has grown to around $50 billion in 2011-12 from $1 billion in 2001. Both together account for a huge market of 2.2 billion people with a combined GDP of more than $3 trillion. There has also been a surge in Indian private investment in Africa with big ticket investments in the telecommunications, IT, energy and automobiles sectors, the joint report states.
“Lack of financing and poor infrastructure facilities are the two key constraints in India-Africa trade and investment. African traders’ concerns include poor access to Indian buyers and trade finance. On the other hand, transport and logistics costs and poor business environments are cited as major difficulties by Indian traders,’’ the report states.
Suggesting a number of steps to be taken to boost trade and investment between India and Africa, the report says that to sustain trade growth, there is an urgent need to broaden the trade basket and increase cooperation between small and medium enterprises. “The commercial wings of Indian embassies in Africa can play a facilitating role by providing in-country research on market expansion opportunities available to Indian exporters,’’ the report adds.
The report is of the view that India’s investment-led trade approach could help sustain the dynamic trade growth between India and Africa, and help extend trade in terms of the number of partners involved and also the range of goods and services traded. Investments for joint ventures between India and African countries would best open up the route for enhancing goods trade. In addition, it says, greater cooperation in agriculture and agro-processing would have a great bearing on the food security situation in India and African continent.
This article has been corrected for editorial error.