The countries in the African continent have a common problem, scarcity of foreign exchange for trade. The resource-rich African countries have gone millennia-old practice of ‘barter exchange’ to trade with India. These countries see India as a trustworthy nation, and therefore the countries – Zambia, Ghana and Rwanda have approached India with the proposal to ‘exchange’ minerals like copper and gold in return of completion of projects.
Two Indian companies ‘Ircon International’ – a subsidiary of Indian Railways and the ‘State Trading Corporation of India (STC)’, an arm of Ministry of Commerce are already in talks with African nations to swap commodity in return of project completion. Icron International will build projects in African nations while STC will import minerals.
“It appears business in future will happen through barter. Every country is facing issues with foreign currency. India will build projects and we will be getting goods in return,” said a senior official. STC is already exploring the possibility of barter exchange with other African countries. This is not the first time when Icron and STC have joined hands to carry out barter exchange.
In the early 2000s, these companies made a similar arrangement when India imported Palm oil from Malaysia while Icron completed railway projects in return.
Africa is an important source of raw material. Zambia has a huge depository of cobalt, copper, platinum, as well as gold. Ghana is rich in bauxite, manganese, diamonds, and it’s the largest producer of Gold on the African continent while Rwanda has tin, tantalum and tungsten.
India and China- the two raw material hungry emerging superpowers seek to exploit the rich landscape of Africa for the benefit of the continent. European powers only exploited people and natural resources of Africa for selfish interests and the relation was of domination rather than of cooperation.
The new power centres of the world located in Asia are battling for influence in Africa. India’s engagement with the continent goes hundreds of centuries-old with a vibrant history of trade between the old African civilizations and empires in the Indian peninsula.
According to Strabo, a Greek geographer who lived before Christ :
“At any rate, when Gallus was prefect of Egypt, I accompanied him and ascended the Nile as far as Syene and the frontiers of Kingdom of Aksum, and I learned that as many as one hundred and twenty vessels were sailing from Myos Hormos to India, whereas formerly, under the Ptolemies, only a very few ventured to undertake the voyage and to carry on traffic in Indian merchandise.”
The engagement increased further in the colonial period when the Subcontinent was under British control and a large chunk of African landmass was also controlled by the same colonial hegemon. A large Indian Diaspora could be still found in nation-states of Africa. The common bridge of English as an administrative language also goes in favour of India. Bollywood movies are very popular in Africa with huge black as well as the white market.
On the other hand, China has deep pockets compared to that of India. The total Indian loan to African countries since 2005-06 is 27.91 billion dollars while China has extended the Line of credit of 126 billion dollars. Chinese relations with Africa are new and mainly economic. All that China is interested is in the natural resources like ivory, oil, gold etcetera which the continent possesses in large amounts.
Africa is the next big market and it has also an abundant amount of natural resources in the field of energy and minerals which India needs. Therefore a greater involvement will be beneficial for India as well as for Africa.