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    India in Africa

    Implications for Norwegian Foreign

    and Development Policies

    NUPI Report

    NorskUten

    rikspolitiskInstitutt

    Norwegian

    InstituteofInternationalAffairs

    Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey,

    yvind Eggen and Mzukuzi Qobo

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    Publisher:Copyright:

    ISBN:

    Visiting address:

    Address:

    Internet:E-mail:

    Fax:

    Tel:

    Norwegian Institute of International Affairs Norwegian Institute of International Affairs 2012

    978-82-7002-320-2

    Any views expressed in this publication are those of the

    authors. They should not be interpreted as reecting the

    views of the Norwegian Institute of International Affairs.The text may not be printed in part or in full without the

    permission of the author.

    C.J. Hambros plass 2d

    P.O. Box 8159 Dep.

    NO-0033 Oslo, Norway

    [email protected]

    [+ 47] 22 99 40 50

    [+ 47] 22 99 40 00

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    India in Africa

    Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey,

    yvind Eggen and Mzukuzi Qobo

    Implications for Norwegian Foreignand Development Policies

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    Table of Content

    Executive Summary .............................................................................. 7Purpose .............................................................................................. 7Indias relations with Africa ............................................................. 7India in Africa: forms of engagement ............................................... 7Implications for Africa ...................................................................... 8Implications for Norway ................................................................. 10

    1. Overview ......................................................................................... 13

    1.1 Historical background .......................................................... 131.2 Indias foreign policy ........................................................... 131.3. Indias Africa policy............................................................. 151.4. Sectoral overview of current engagement ............................ 18

    1.4.1 Trade ............................................................................. 181.4.2 Investments ................................................................... 21

    Investment overview ....................................................................... 221.4.3 The energy sector .......................................................... 221.4.4. Diplomacy and security ................................................ 231.4.5 Development assistance ................................................ 251.4.6 Agriculture and food security ....................................... 281.4.7 Health cooperation ........................................................ 301.4.8 Climate and the environment ........................................ 31

    1.5. Country case studies ............................................................. 321.5.1 Nigeria........................................................................... 321.5.2 Sudan............................................................................. 36

    2. African responses and implications for Africa ............................... 412.1 Introduction .......................................................................... 412.2 Differences between India and other powers ....................... 422.3 Implications for economic growth ....................................... 43

    2.4 Political implications ............................................................ 462.5 Implications in specific policy areas .................................... 482.5.1 Good governance, democracy and human rights .......... 482.5.2 Management of natural resources, climate and the

    environment .................................................................. 492.5.3 Food security and agriculture ........................................ 502.5.4 Security, peace and reconciliation ................................ 512.5.5 Capital movements, tax havens and corruption ............ 522.5.6 Health ............................................................................ 522.5.7 Decent Work ................................................................. 53

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    6 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    3. Implications for Norway ................................................................. 553.1 General implications: reconsidering assumptions ................ 553.2 Development cooperation .................................................... 57

    3.2.1 Poverty alleviation ........................................................ 593.2.2 Good governance, democracy and human rights .......... 613.2.3 Fighting corruption ....................................................... 623.2.4 Climate and the environment ........................................ 63

    3.3 Business engagement in Africa ............................................ 643.4 Multilateral cooperation ....................................................... 65

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    Executive Summary

    PurposeThe growing engagement of emerging powers such as China and Indiain Africa has major implications for development on the continent.This report, commissioned by the Norwegian Ministry of Foreign Af-fairs, presents and reviews Indias new engagement in Africa and dis-cusses the implications of this engagement for development in Africaand for Norwegian foreign and development policies.

    Indias relations with AfricaSince Indias independence, it has supported African national strug-gles against colonialism and against apartheid in South Africa, and ithad a leading role in the Non-Aligned Movement (NAM). But in spiteof historical ties and ideological affinity, the African continent wasrelatively marginal in Indias foreign policy and diplomacy until1990s. In official rhetoric, Indias relationship with Africa is still

    based on the shared historical experience of colonialism. Nevertheless,Indias involvement in Africa is driven first and foremost by what is

    seen as its national interests.

    There are three main factors that have led India to recast its Africapolicy. First, securing cheap energy and other strategic raw materialson a long-term basis is an economic and political imperative. Second,Africa has emerged as an important market for Indian goods and ser-vices. Africa is viewed as an underdeveloped market for low-technology and cost-effective manufactured goods and services.Third, India considers the Indian Ocean region to be within its sphereof influence, and has expanded its military presence in the IndianOcean.

    India in Africa: forms of engagementBetween 2000 and 2009, the volume of trade between India and Afri-ca increased by more than 700%. The increase mainly reflects a sharpincrease in demand for oil and other raw materials, but during thesame period Indian exports to Africa have more than doubled. Indianinvestments in Africa are in many sectors, including service, manufac-turing and infrastructure. The investments are led by the private sec-tor, but the government also takes an active role through investment

    by state owned companies, extension of credits and active diplomacy.

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    8 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    Diplomatic ties have been scaled up significantly, reflected both interms of increased priority to Africa at the Ministry of External Af-fairs, and in the number of embassies and high commissions in Africa.

    India has continually participated in UN peacekeeping operations inAfrica. It has entered into defence agreements with several countriesin East Africa, funds training of officers, and has supplied militaryequipment to several African countries.

    Development assistance from India has been increased rapidly. Thebulk is devoted to training, capacity building, consultancy services,deputation of experts, study tours and other soft investments.

    Two sectors where development assistance and economic cooperationare closely integrated are agriculture and health. A number of initia-tives have been taken to increase cooperation in agriculture focusingon capacity building, research and sharing knowledge, while Indianagricultural firms invest in many African countries. In the health sec-tor, training of health personnel, joint research and other forms of de-velopment cooperation correspond with Indian export of pharmaceuti-cals and medical tourism.

    India and African countries have joint interest in their call for devel-oped countries to substantially cut their climate gas emissions and

    make legally binding commitments, while allowing voluntary cuts fordeveloping countries, as well as providing funds to support developingcountries in addressing address climate change, with some differencesin approach.

    Implications for AfricaBy and large, Indias engagement in Africa has been welcomed byAfrican governments. The fact that India can present its engagementas an expression of south-south solidarity has probably contributed toits legitimacy.

    African countries have benefitted from export to India both in terms ofincreased quantities of exports and in terms of higher prices caused bygrowth in demand. However, export of raw materials means vulnera-

    bility to fluctuations in prices. African imports from India can reduceprices for consumers and thereby contributing to improved standardsof living. Where these imports compete with domestic producers, itcan lead to reduced local output, factory closures and job losses.However, in most cases it is reasonable to assume that import fromIndia primarily replaces imports from other countries.

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    India in Africa. Implications for Norwegian Foreign and Development Policies 9

    Indian investments are an important source for much needed capital,normally followed by corresponding technology transfers and expand-ed trade. The actual effects, including labour conditions and potential-ly harmful effects from industrial development, depend more on sectorand the actual projects than on the nationality of the investor. Thereare no indications of Indian businesses being particularly problematicas compared to e.g. national or other foreign companies. Capitalmovements are notoriously difficult to trace, but several factors pointtowards the possibility of informal capital movements and tax avoid-ance, and there are some allegations of Indian financial institutions

    being involved in illicit capital movements out of Africa.

    Indias engagement also has political implications for African coun-

    tries. First, the emergence of India as a more significant political andeconomic partner can give African countries greater autonomy in rela-tion to other external actors, since the existence of a greater range of

    partners can give African state more scope of choice. Second, closerties with India can also contribute to giving African states more au-tonomy in domestic policy-making by enabling access to foreign re-sources, which again make governments less dependent on taxation ofdomestic actors and more able to resist pressure from domesticgroups. Since India, like China, attaches greater importance to the

    principle of non-intervention and provide funding with less or no po-litically motivated constraints and conditions, Indian funds is poten-

    tially better than Western aid in terms of domestic autonomy. The ac-tual implications of this will vary between countries depending oncontext. In countries where patrimonial relations between the state andsocial groups are predominant, Indias engagement is likely to rein-force existing forms of rule, especially if economic resources aretransmitted through state institutions in ways that enable officials touse them to maintain patronage networks.

    There is little explicit environmental concern in Indias engagement inAfrica. Parts of Indian engagement certainly have implications for theclimate and the environment. However, there is no reason to believe

    that activities involving Indian actors and interests will differ in signif-icant ways from those involving other foreign (or national) companiesin this regard.

    In the agricultural sector, Indian companies are involved in long-termland leases of land, which is controversial. Most of the benefits accrueto the state and to companies and not to local inhabitants. This raisesconcern about Africas food sovereignty, protection of land rights forAfrican subsistence farmers and displacement of farmers from theirland.

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    10 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    In security related areas, the two most prominent forms of direct In-dian engagement are participation in peacekeeping operations and na-val security. Here, India is a major contributor to those aspects of Af-rican security interests.

    Implications for NorwayThe increased interest from several emerging powers indicates that,far from being marginalized, Africa is of increasing interest, both ininternational relations and in the world economy. So far, China hasdominated in Western attention, sometimes with a view that sees Chi-na as an exception to the normal and preferred relations between Afri-ca and the world represented by the Western approach, dominated by

    aid and to some degree based on Western ambitious to reforming Af-rican states and societies based on what they see as African interests.With India, it is clear to everybody that China is not an exceptionalcase but the first and biggest representative of a trend, and that it is theWestern relation with Africa that is indeed and exceptional form ofinternational relations. Indias more explicit anti-neo-imperialist posi-tion, as compared to China, perhaps makes this even more evident.

    This has major implications for Norways relations with Africa. First,Western hegemony (if it ever existed) can no longer be taken forgranted. The emerging powers do not only provide attractive re-

    sources, but also alternative development strategies and models forstatehood, and make it possible to benefit from foreign aid without acorresponding Western reform agenda. Norways development coop-eration with African countries should be re-considered in this light.

    Better integration of Indian engagement with Norwegian and Westernaid might potentially serve the potential benefit of increased effective-ness. However, there is little identifiable interest in India to integrateits aid policy with that of OECD DAC; on the contrary, India explicit-ly presents itself as an alternative to Western aid. It should thereforenot be expected that India can or will join the club of OECD donors in

    its Africa engagement. And given Indias commitment to the principleof non-intervention, it would not engage in attempts to influenceforms of governance in Africa. Importantly, Norways and Indias de-velopment assistance to African country probably supplements eachother even if not directly coordinated, for instance where India sup-

    ports technical knowledge, institutional capacity or infrastructure de-velopment in ways that supposedly also enhances the effectiveness of

    Norwegian aid.

    At operational practical level there are few areas of direct interferencebetween Norwegian and Indian engagement in Africa, whether in aid

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    India in Africa. Implications for Norwegian Foreign and Development Policies 11

    or in other forms of engagement. As a general suggestion, interferenceshould be identified and synergies explored for each country or case,and not generally. There are relatively few areas where generalbilat-eral or trilateral cooperation between Norwegian and Indian institu-tions on Africa issues would be natural. Among the areas where dia-logue and cooperation may be explored either on country or generallevel, are dialogue related to multilateral fora and on security issues,

    possible cooperation on climate change and CDM mechanisms, and indevelopment cooperation involving NGOs.

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    1. Overview

    1.1 Historical backgroundContacts between India and Africa date back to ancient times. Indianmerchants were engaged in trade along the eastern coast of Africamore than 2000 years ago.1 During the period of European colonialexpansion, this trading system was brought an end. At the same time,the incorporation of both India and large parts of Africa into the Brit-ish Empire facilitated the establishment of substantial communities of

    people of Indian origin in Africa.

    When India became independent, the government headed by the firstPrime Minister Jawaharlal Nehru pursued a policy of supporting Afri-can national struggles against colonialism and against apartheid inSouth Africa. India supported Africas liberation movement both fi-nancially and politically. Thus, during the 1970s and 1980s, India

    provided both material and technical support to liberation move-ments.2 Nehru also played a leading role in convening the first Asian-African Conference, which brought together representatives of Afri-can and Asian countries in the Indonesian city of Bandung in 1955,

    giving rise to the Non-Aligned Movement (NAM). The NAM-inspiredset of ideas were meant to help post-colonial Third World states likeIndia and African countries to establish a pattern of cooperation dif-ferent from that of the colonial period.

    But in spite of historical ties and ideological affinity, the African con-tinent was relatively marginal in Indias foreign policy and diplomacyuntil 1990s. For much of Indias early post-Independence period, itsforeign policy was mainly focused on the South Asian region, despitethe assertion of AfroAsian solidarity. As a result its foreign policyduring much of the Cold War was not directly oriented towards the

    unfolding of developments in Africa. However, India remained com-mitted to NAM and its at least rhetorical emphasis on South-Southcooperation.

    1.2 Indias foreign policyTo understand Indias recent deepening involvement with Africa wemust start by locating this policy within the framework of Indian for-

    1 Basil Davidson, Africa in History: Themes and Outlines, Rev.Ed., New York: Touch-

    stone, 1995.2 Ajay Dubey, India-Africa State Relations (1972-1997), Africa Quarterly 37, no. 1-2,

    1997, pp.43-57.

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    14 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    eign policy in general. The main pillars of Indian foreign policy sinceindependence have been strategic and economic autonomy and re-gional dominance. Key expressions of these pillars have been mem-

    bership in the non-aligned movement, close ties to the Soviet Unionand a strategy of economic development based on self-sufficiency,import substitution and state-led industrialisation.

    However, since the end of the cold war and the introduction of eco-nomic liberalisation, this has changed. While the key objectives of re-gional dominance and strategic and economic autonomy remain in

    place, the means by which these objectives are sought realised havechanged. On the one hand, the non-aligned movement has become lesssignificant and the ties to the Soviet Union/Russia have been weak-

    ened. Instead, India has moved closer to the West and the US in geo-political terms. The most significant indication of this was the signingof the nuclear agreement with the US in 2008.

    On the other hand, economic liberalisation and high growth rates havemade the country much more integrated in the global economy. TheIndian market has been opened up for foreign investment, and Indiancompanies have expanded internationally. This, in turn, has led to amore active role in the management of the global economy, clearlyseen in the active role taken by the country in international trade nego-tiations. Together with Brazil and South Africa (the IBSA group), co-

    ordinated strategies have been developed. Moreover, the country hastaken a more active role in international organisations such as the UN.A key objective for India is to get a permanent seat in the UN SecurityCouncil. For this purpose, it has aligned itself with Japan, Germanyand Brazil, in an agreement to support each others bids for suchmembership.

    Thus, Indias foreign policy has been recast to reflect the changingenvironment. These changes reflect Indias growing political and eco-nomic role in the world system, and are indications of its ambitions to

    become a major global power. The chief drivers for India reconstitut-

    ing its foreign policy is its rapidly growing economy and increasingintegration in the world economy, including its dependency on oil andenergy from abroad, the countrys emergence as a responsible nuclearweapons state and the prospects of Indias enhanced role on the inter-national stage. Indias foreign policy aims at building a secure interna-tional environment that also contributes to the countrys developmentgoals. In sum, India seeks to promote an environment that would ena-

    ble it to accelerate its socio-economic development and safeguard itsnational security.3

    3 A. Dutta, Role of Indias Defence Co-operation Initiatives in Meeting the Foreign PolicyGoals. InJournal of Defence Studies. Vol.3 No.3, July 2009, pp.31-47

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    India in Africa. Implications for Norwegian Foreign and Development Policies 15

    In 2007 Indias foreign secretary identified three key goals for Indiasforeign policy. The first deals with ensuring a peaceful periphery;the second emphasizes sound relations with the major powers, and thethird highlights issues of the future, namely food security, water, en-ergy and environment.4 It is clear that Africa falls into the first andthird of these categories, hence India attaches increasing importance toits relations with African countries.

    1.3. Indias Africa policyIndias Africa policy is stated in general terms and does not appear todiffer much from policies towards most other states. Nonetheless,what lies behind it has implications for the region and beyond. In offi-

    cial rhetoric, Indias relationship with Africa is based on the moralhigh ground that it shared Africas history of subjection to colonisa-tion. Thus, according to the government, Indias contemporary Africa

    policy is based on the aim to promote justice in the global order, andto increasing the leverage of their respective global positions in theinternational order. It is clear, however, that Indias deepening rela-tions with Africa are both borne out of political expediency and basedupon economic pragmatism.

    Commenting on Indias policy of engagement with African countries,former Minister of State for External Affairs Shashi Tharoor outlined

    the Indian model of engagement with the continent that revolvesaround capacity building, training and private sector investments. Ac-cording to him, the model of our cooperation with Africa is clearlyone seeking mutual benefit through a consultative process. We do notwish to go and demand certain rights or projects or impose our ideasin Africa. But we do want to contribute to the achievement of Africasdevelopment objectives as they have been set by our African part-ners.5

    Nevertheless, Indias foreign policy is ultimately guided by its domes-tic concerns. Thus, while New Delhi publicly retains its ideological

    commitment to the principles of non-alignment and South-Southstruggle against the inequities of the global order, it has also becomeincreasingly conscious of its growing need to secure supplies of foodand energy, exploit new export markets and attract foreign capital andtechnological know-how. These are the key factors that have led Indiato recast its Africa policy.

    4 S.S. Menon, The Challenges Ahead for Indias Foreign Policy. Address to the ObserverResearch Foundation, New Delhi, 10 April 2007.

    5 Tharoor unveils Indian model of engagement with Africa, Shasi Tharoor at the at thesixth India-Africa business conclave http://tharoor.in/press/tharoor-unveils-indian-model-of-engagement-with-africa/

    http://tharoor.in/press/tharoor-unveils-indian-model-of-engagement-with-africa/http://tharoor.in/press/tharoor-unveils-indian-model-of-engagement-with-africa/http://tharoor.in/press/tharoor-unveils-indian-model-of-engagement-with-africa/http://tharoor.in/press/tharoor-unveils-indian-model-of-engagement-with-africa/
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    16 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    First, given Indias priority to diversification of its foreign oil suppliesand Africas position as the last oil frontier, it is logical that India en-gages the continent to secure the raw materials and energy resources itneeds. Alongside others, India has discovered that Africa is wherethe resources and future markets that will fuel its economic growthare to be found.6

    Second, Africa has emerged as an important market for Indian goodsand services. In this regard, the Indian private sector, with governmentsupport, has been active in expanding trade and investment in Africato capture Africas untapped market potential. Africa is viewed as anunderdeveloped market for low-technology and low- cost manufac-tured goods and services. Most Indian foreign investments have been

    associated with market penetration efforts for electrical and electronicproducts and automobiles.7 Manufactured products represent abouthalf of Indias exports to Africa.8 Africa also presents an opportunityto access third markets like Europe and the US because of preferentialaccess for LDCs to those markets, especially in the case of textiles andapparels.

    Third, India considers the Indian Ocean region to be within its sphereof influence, and in response to the existence of extremist organisa-tions and criminal syndicates that traffic drugs, arms and people, aswell as pirates, India has dramatically expanded its military presence

    in the Horn of Africa and the Indian Ocean.9

    Thus, Indias involvement in Africa is driven first and foremost bywhat is seen as their national interests. While India continues to appealto notions of third world solidarity and the legacy of joint strugglesagainst colonialism, it remains the case that its own political and eco-nomic interests are at the core of the current engagement. A clear in-dication of this is the fact that so much of Indias recent investmenthas been in resource rich countries such as Nigeria, Liberia and Su-dan, which were until recently quite peripheral countries for India.

    Indias engagement with Africa has been formulated through a num-ber of recent meetings and agreements. The Banjul Formula wasadopted by the African Union (AU) in 2006 at its Summit in Banjul,Gambia. In April 2008, the India-Africa Forum Summit (IAFS) wereheld in New Delhi. Following the Banjul Formula, participants fromthe African side at IAFS include the Chairperson of the AU, the

    6 Mark Sorbara India and Africa - it's old friends, new game and rules, The Nation 9 Feb-ruary 2007.

    7 Ibid. p. 18.8 See Broadman HG, Africas Silk Road: China and Indias new economic frontier, World

    Bank, Washington, 2007, p. 83.9 Daniel Volman, China, India, Russia and the United States: The Scramble for Africas

    Oil and the Militarization of the Continent, Uppsala, Nordiska Afrikainstitutet, 2009.

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    India in Africa. Implications for Norwegian Foreign and Development Policies 17

    Chairperson of the AU in the preceding year, the Chairperson of theAU Commission, the five initiating countries of NEPAD, the Chair ofthe Heads of State and Government Orientation Committee HSGOCand the Chairs of the 8 Regional Economic Communities (RECs). TheAU chooses 15 participants for the Summit.

    At the IAFS in 2008, two agreements were adopted. These were theJoint Declaration of the Africa-India Partnership and the Africa-IndiaFramework for Cooperation, which give a direction to Indo-Africanrelations in the coming years. A meeting held in New Delhi in March2010 entitled Developing Synergies: Creating a Vision, which gath-ered delegates from 34 African countries was aimed at expanding theIndia-Africa Project Partnership. The meeting was hosted as a precur-

    sor and intended roadmap to the second India-Africa Forum Summit(IAFS), held in Addis Ababa in 2011.10

    During these meetings, India has committed itself to expanding coop-eration with Africa and pledged support designed to improve the bilat-eral or sometimes regional cooperation within different sectors. TheIndian government has committed large volumes of export credit toIndian companies; promised to improve market access for African ex-

    ports and reduced limitations to both import and exports; approveddevelopment aid; offered training of Africans in Indian universities;and expanded defence cooperation.

    The private sector has also increased its interest in exploring Africanmarkets. From the mid-1990s, organizations like the Confederation ofIndian Industries (CII), the Associated Chambers of Commerce andIndustry (ASSOCHAM), the Federation of Indian Chambers of Com-merce and Industry (FICCI), and the Federation of Indian ExportersOrganization (FIEO) identified Africa as a thrust area and launched

    programmes to promote economic and business cooperation. FICCIhas identified 8 countries in Africa as top priority for Indian exports:

    Nigeria, South Africa, Kenya, Mauritius, Ghana, Tanzania, Algeriaand Sudan.

    10 Sanesha Naidu, Upping the Ante in Africa: Indias Increasing Footprint Across the Co n-tinent, in Emma Mawdsley and Gerard McCann,India in Africa: Changing Geographiesof Power, Oxford, Pambazuka Press, 2011.

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    18 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    1.4. Sectoral overview of current engagement

    1.4.1 TradeIn its efforts to improve trade with Africa, the Government of Indiahas taken various measures to improve financing of export, put in

    place an expeditious system of clearance of overseas investments forpublic sector companies, bridge gaps on account of differences in lan-guage, harmonize manufacturing standards of the region, and find amutually acceptable solution to the recovery of outstanding dues. In-dia strengthened the commercial wings of its African missions in 2003as a trade promotion measure. The volume of trade between India andAfrica increased from US$1bn in 1991, to US$7.3bn in 2000 and

    $53.3 billion in 2010-11.11

    At the March 2010 IndiaAfrica Conclavemeeting in New Delhi attended by 400 African delegates from 34countries, it was agreed to scale up bilateral trade with Africa toUS$70 billion by 2015. 12

    Figure 1 shows the growth of Indias trade with Africa since 2000.

    Figure 1. Indian Import and Export to/from Africa

    Source: World Trade Atlas13

    and the Indian Ministry of Commerce and Industry.

    11 http://www.business-standard.com/india/news/exim-bank-to-issue-5-bn-fresh-linecredit-to-africa/452388/

    12 Simon Freemantle and Jeremy Stevens, CII-Exim Bank Conclave on India Africa ProjectPartnership Confirms Thrust of India Inc. in Africa, Standard Bank Research Paper, 17March 2010.

    13 Available on http://www.tralac.org/pdf/20070717_India-Africa_top20s2007.xls

    http://www.tralac.org/pdf/20070717_India-Africa_top20s2007.xlshttp://www.tralac.org/pdf/20070717_India-Africa_top20s2007.xls
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    India in Africa. Implications for Norwegian Foreign and Development Policies 19

    The biggest growth in Indian imports from Africa has been seen since2005. This increase reflects Indias growing demand for oil and rawmaterials. During same period Indian exports to Africa have morethan doubled. Manufactured products represent about half of total ex-

    ports.14 Other leading exports currently include machinery, chemicaland pharmaceutical products, transport equipment, food and livestock,etc.

    Indias top ten trading partners in Africa are South Africa, Nigeria,Egypt, Tanzania, Ghana, Angola, Tunisia, Kenya, Sudan and Moroc-co. These trade flows are largely driven by economic complementari-ties between the two regions. According to Broadman, Although Af-rican exports to Asia as a whole do not exhibit a significant pattern of

    product diversification, inter-sectoral complementarities between Af-rica and Asia do exist. The rich resource endowment in Africa pro-vides a natural comparative advantage in raw materials and resource-

    based products. China and India, on the other hand, have a rich stockof skilled labour compared to Africa and thus have a comparative ad-vantage in manufactured products.15 Figure 2 shows the recentgrowth of Indian trade with Africa, compared to that of China. Com-

    pared to Chinese trade, which grew ten-fold to US$93bn between2000 and 2008, Indian trade is clearly less, but still significant.

    Figure 2: China and Indias total trade with Africa (US$ millions)

    Source: World Trade Atlas16

    and the Indian Ministry of Commerce and Industry

    14 See Broadman HG, Africas SilkRoad: China and Indias new economic frontier, WorldBank, Washington, 2007, p. 83.

    15 Ibid. p. 8616http://www.tralac.org/cgi-bin/giga.cgi?cmd

    =cause_dir_news&cat=1044&cause_id=1694#china

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    20 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    Among the most important initiatives that India has taken to advanceits economic cooperation with African countries is its Focus AfricaProgram, launched by the government under the EXIM Policy 2002-07 to increase Indian exports to sub Saharan Africa. The programmecovers the entire African continent, but specific target markets areSouth Africa, Nigeria, Mauritius, Kenya, Ethiopia, Tanzania and Gha-na.

    India now has Lines of Credit (LOCs) to African countries offered byEximbank amounting to US $ 2.15 billion and covering 47 countries.These are targeted mostly at agriculture, infrastructure development,food processing, IT, and pharmaceuticals. While 15% to 20% of thecontract value is paid as advance by the importers, the balance 80% to

    85% of the contract value is disbursed by the EXIM Bank to the Indi-an exporters on shipment of goods. The recovery of credit is takencare of by the Exim Bank, without recourse to Indian exporter. 17 TheEXIM Bank has also extended LOCs to several regional organizationsin Africa. At the end of March 2009, close to $2.27 billion (or 60% oftotal EXIM Lines of Credit) went to African countries. Sudan and Ni-geria are the largest beneficiaries.

    Table 3: Regional distribution of Indias trade with Africa, 2004

    10 (US$m)

    Exports 2009-10Southern 3,309West 3,137Central 350East 3,512Total Indian export 178,751Africas % of total exports 5.8

    Imports 2009-10Southern 10,192West 9,864Central 270

    East 388Total Indian import 288,373Africas % of total imports 7.2

    Source: Indian Department of Commerce, 2010. Note: Figures rounded to nearestmillion.

    17 http://commerce.nic.in/trade/international_tpp_africa_10.asp

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    India in Africa. Implications for Norwegian Foreign and Development Policies 21

    Indian exports to Africa are mainly concentrated in three sectors:manufactured products (49%) chemicals (11%) and machinery andtransport equipment (10%), while mineral fuels (oil and coal) and pre-cious metals constitute the largest proportion of imports. In fact, of thetotal of $ 26 billion worth of imports from Africa, 18 billion are im-

    ports of minerals and 4,5 billion are precious stones/metals.18

    1.4.2 InvestmentsIndias investment in Africa is led by the private sector, with most ofthe investments in the service and manufacturing sectors. However, inrecent times, India has diversified its investments in Africa. One rea-son for this is that that India has substantial foreign currency reserves,and the government has lifted regulations and controls to allow firmsto go abroad. It has also removed the $100 million cap on foreign in-vestment by Indian firms. Big Indian business houses such as the Ta-tas, Essar, Vedanta, and Kirloskar have invested in Africa. The TataGroup has invested about US$ 100 million and plans to triple thatamount over the next three years. The Group claims to have em-

    ployed 700 people in Africa.19 Indian companies are also actively in-volved to explore commercial farming in various African countries(see below).

    Both state-owned enterprises and Indian private sector operators draw

    a great deal of support from the Export-Import Bank of India throughits Lines of Credit programme. The credit lines are seen as strengthen-ing and expanding export trade between the respective regions andIndia through deferred payments terms. Examples of projects fundedthrough the programme executed by Indian companies include: supplyof pharmaceuticals (Uganda, Ghana); building of transmission lines(Kenya); telecom projects (Malawi); railway construction project(Tanzania); erection of a sugar plant (Nigeria); and sewerage study(Ethiopia).20

    Indian companies have also been operating in the infrastructure sector

    in Africa, with the government-owned engineering companies likeIRCON (a construction company owned by the Ministry of Railways);and Rail India Technical and Economic Services (RITES), a consul-tancy organization in the fields of transport, infrastructure and relatedtechnologies, playing a significant role in constructing road and rail-ways in countries like Kenya, Mozambique, Algeria, Niger, Sudan

    18 http://commerce.nic.in/eidb/irgncom.asp19 Details of Tata groups holding in Africa can be found in

    http://www.tataafrica.com/our_sectors/index.htm.20 Presentation by S.R. Rao, Chief General Manager, Export-Import Bank of India, at the

    Organisation for Economic Cooperation & Development, Paris, March 16-17, 2006.

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    India in Africa. Implications for Norwegian Foreign and Development Policies 23

    little wonder that energy security tops the political agenda.23 The gov-ernment is also seeking to diversify the countrys sources of oil sup-

    pliers, in order to reduce dependency on supplies from the unstableand unpredictable Middle East. Therefore, the hunt for new and relia-

    ble sources of energy is critical to Indias domestic growth as well aspositioning it as a global economic power.

    A key driver for its engagement in Africa is its need to expand anddiversify international sources of petroleum. Consequently, the Oiland Natural Gas Corporation Videsh, Ltd (OVL) has set the objectiveof doubling its reserves by the year 2020, pursuing international op-

    portunities. India now imports about a quarter of its oil from Africa,but this figure is expected to grow in the coming years.24 African

    countries hold 8% of the worlds oil reserves, and 70% of its oil pro-duction is concentrated in West Africa's Gulf of Guinea. This is alsothe area where Indian energy investment has grown the most.

    Indias interest in Africas oil sector has three elements: contracts forcrude purchase, participation in the upstream sector, and refineries.The participation of OVL in both South Africas and Nigerias up-stream sectors has forged energy ties between the countries. OVL hasalso secured an oilfield in Egypt and signed a deal to explore oil inIvory Coast, sent oil experts to African countries to provide Africanengineers with new technology and pledged concessional credit to re-

    source-rich West African countries like Burkina Faso, Chad, Equato-rial Guinea, Ghana, Guinea-Bissau, Ivory Coast, Mali and Senegal.

    1.4.4. Diplomacy and securityOver the last decade, the India foreign policy establishment has soughtto overcome the institutional neglect to which it consigned Africa dur-ing the immediate post-independence period. Until 2003, the Ministryof External Affairs had only one joint secretary responsible for thesingular Africa division. Today, three joint secretaries manage threeregional divisions covering the continent. With the India-Africa Fo-

    rum Summit in 2008, the government further increased its attentionand diplomatic presence. At the end of the first decade of the 21st cen-tury, India had 26 embassies or high commissions on the continent.Such diplomatic attention has already paid off. In 2006, for example,the Economic Community of West African States (ECOWAS), sup-

    ported Indias bid for a permanent seat on the United Nations SecurityCouncil (UNSC). More recently, External Affairs Minister PranabMukherjee has linked the countrys bid for a permanent seat on the

    23 Devika Sharma and Swati Ganeshan, Before and Beyond Energy: Contextualising theIndia-Africa Partnership, Occasional Paper no 77, South African Institute of InternationalAffairs, 2011.

    24 Obi 2010, op.cit.

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    24 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    UNSC with Africas own candidacy, promising Indian support for A f-ricas demand to get a permanent seat at the UNSC.

    Since its independence in 1947, India has continually participated inUN peacekeeping operations in different parts of the world - with asignificant number of these commitments undertaken in Africa.Among other deployments, Indian forces have been involved in mis-sions in Mozambique, Somalia, Angola, Sierra Leone, Ethiopia, Eri-trea, the DRC, and Liberia. The Indian contingent serving in the DRCrepresents the largest national contribution to the UN OrganizationStabilization Mission in the Democratic Republic of the Congo(MONUSCO). During 2010 India was the 3rd highest troop contrib-uting country to UN peacekeeping operations (behind Pakistan and

    Bangladesh), averaging almost 9,000 soldiers or police officers permonth.

    How can Indias contributions to peacekeeping in Africa be ex-plained? Several commentators have attempted to analyse Indias rea-sons for involvement in UN peacekeeping operations, including agroup of prominent Indian military officers who have served on UNmissions. It is argued that Indian participation has served its geo-strategic interests. This is most notable in the case of various East andSoutheast Asian missions, which were seen in Indias foreign policyas essential to its conception of both regional stability and internation-

    al order.

    What direct strategic purpose participation in African missions such asthe Congo, Angola, Mozambique, Rwanda, Liberia and Sierra Leonehas served, remain less clear. Commitment to these operations is ex-

    plained as an expression of solidarity with non-aligned countries.25This resonates with Indias anti-colonial position in world affairs. An-other motive is that participation in peace operations may help Indiaget support from African countries in international fora such as theUN, where it has long sought permanent membership in the SecurityCouncil. Other reasons for participation include humanitarian con-

    cerns, such as in the operations in Rwanda and Somalia. Peacekeepingoperations also give Indias armed forces invaluable exposure to a va-riety of scenarios, including integration at international military level

    which is often difficult or prohibitively expensive to simulate or in-clude in military exercises. Inter-regional rivalry may also be im-

    portant element of Indias participation in peace operation operations.This would include the management of perceptions in its favour, to beseen as a major force in regional and world affairs. Finally, participa-

    25 Wood, C The Politics of Peacekeeping in the Post-Cold War Era. Sorenson, DS, Wood,

    PC (eds). Routledge. New York. 2004, p199.

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    India in Africa. Implications for Norwegian Foreign and Development Policies 25

    tion in such operations also gives the Indian government revenue,since participating states are paid by the UN.

    India also has other forms of security-related engagements in Africa.The country has entered into defence agreements with Kenya,Mozambique and Madagascar, and conducts maritime patrols aroundSeychelles, Mauritius and Mozambique. In October 2008, Indian war-ships began conducting patrols off the Somali coast to protect shipsfrom pirate attacks.India has also established a listening post in north-ern Madagascar, with a radar surveillance station equipped with ahigh-tech digital communications system.26 It also funds training ofofficers from various African countries. Moreover, India has suppliedof helicopters and patrol vessels to several African countries and has

    become a major customer for South Africas arms exports.

    1.4.5 Development assistanceIn parallel with recent growth in trade and investment India has alsostepped up its development assistance. Reflecting the countrys grow-ing emphasis on aid, there have been discussions about establishing astate development agency. First proposed in 2007, the idea appearedto have been dropped in 2010.27 However, in July 2011, it was report-ed that the government will go ahead with the plan.28

    It is difficult to quantify precisely the volume and types of Indias d e-velopment assistance to Africa. Figure 1 shows the main recipients ofIndian aid, based on official figures. However, complete and dis-aggregated data are hard to find, and the available data makes it diffi-cult to distinguish between what the OECD-DAC would define asaid and what is, for instance, export credit that can be described asan export subsidy scheme for surplus Indian goods.

    26 Alex Vines, Indias Security Concerns in the Western Indian Ocean, in EmmaMawdsley and Gerard McCann (eds.), India in Africa: Changing Geographies of Power,Oxford, Pambazuka Press, 2011.

    27 http://www.thaindian.com/newsportal/business/plan-for-external-aid-agency-dropped_100376138.html

    28 http://www.guardian.co.uk/global-development/2011/jul/26/india-foreign-aid-agencyhttp://www.hindustantimes.com/News-Feed/India/India-setting-up-foreign-aid-agency/Article1-722089.aspx

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    26 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    According to AidData, total Indian development assistance to Africain 2009 was a little over $ 400 million. Nevertheless, Indian devel-opment assistance remains small, compared to that of Western coun-tries and China. Chinas aid to Africa in 2009 is estimated byBrautigam to be about $ 2,5 billion, while bilateral aid from OECDcountries in the same year stood at $ 25 billion.

    India sees its policy of development cooperation as an inherent part of

    its foreign policy, and explicitly states that the aim of its policy of de-velopment cooperation is to promote Indian interests.29 India couplesits development engagement with the commercial imperative of ac-cessing vital resources. As argued by Mawdsley and McCann,30 en-trepreneurial and business relationships have become newly central tounderpinning and shaping Indias aid and diplomatic agenda, and de-velopment cooperation is intended to open up markets for Indiancompanies, guarantee energy security and strengthen Indias negotiat-ing position in international fora. The Indian Development AssistanceScheme (IDEAS), set up in 2005, is explicitly designed to increaseIndian exports, promote economic relations to other developing coun-tries and to support Indias strategic interests abroad.31

    India established a new India-Africa Fund in 2003, allocating up to$200 million in credits to various projects designed to promote Afri-

    29 Matthias Jobelius, New Powers for Global Change? Challenges for International Devel-

    opment Cooperation. The Case of India, Friedrich Ebert Stiftung Briefing Paper no 5,2007; Subhash Agrawal,Emerging Donors in International Development Assistance: TheIndia Case, IDRC Canada, 2007; Peter Kragelund, The Potential Role of Non-TraditionalDonors Aid in Africa, Issue paper no 11, International Centre for Trade and SustainableDevelopment, 2010.

    30 Emma Mawdsley and Gerard McCann, The Elephant in the Corner? Reviewing India -Africa Relations in the New Millennium, Geography Compass 4/2 (2010): 8193, p. 86.

    31 Jobelius, op.cit., p. 4.

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    India in Africa. Implications for Norwegian Foreign and Development Policies 27

    can economic integration within the framework of the New EconomicPartnership for Africas Development (NEPAD).32 At the India-AfricaSummit in 2008, India pledged to increase aid to Africa to US$500million over the next 5 to 6 years, in addition to offering a duty free

    preference scheme. India has also written off the debt owed by coun-tries under the HIPC (Heavily Indebted Poor Countries) Initiative, re-structured commercial debts and supported a number of capital pro-

    jects financed by export credit extended through the Export-ImportBank of India.33

    The bulk of Indian development assistance to Africa is devoted totraining, capacity building, consultancy services, deputation of ex-

    perts, study tours and other soft investments. Under its Indian Tech-

    nical and Economic Co-operation program (ITEC), India has providedmore than $ 1 billion worth of technical assistance and training to Af-rican countries.34 More than 15,000 African students study in India,and training is given to senior African diplomats, defence personnel,and economic and financial officials.

    During the CII-Exim Bank Conclave on India-Africa Project Partner-ship in March 2010 in New Delhi, pledges were made to establish 19institutions aimed at developing human resources capacities. Theseinstitutions include the Africa-India Institute of Foreign Trade; Africa-India Diamond Institute; Institute of Information Technologies; and

    Education Planning and Administration Institute, among others.35

    They form part of plans to create a host of training institutes in Africain areas of diamond polishing, IT, vocational education and Pan-African Stock Exchange. Through these programmes, Africa can ob-tain access to Indian research and development, which has producedcost effective technology.36 India has also established a joint venturewith the African Union to build a Pan African e-Network, which cansupport tele-education, tele-medicine, e-commerce, e-governance andinfotainment, resource-mapping and meteorological services in Afri-can countries.

    32 http://www.engineeringnews.co.za/article/india-sets-up-fund-to-support-nepad-projects-2003-07-07

    33 Sanusha Naidu, Upping the Ante in Africa: Indias Increasing Footprint Across the Con-tinent, in Emma Mawdsley and Gerard McCann,India in Africa: Changing Geographiesof Power, Oxford, Pambazuka Press, 2011; Mark Sorbara, India and Africa: its oldfriend, new games and rules,http://www.sarpn.org/newsflash.php?news_id=7289&archive=1

    34 ITEC was launched in 1964 as a bilateral assistance programme of the Government ofIndia. Under it and its corollary SCAAP (a program of assistance meant for Common-wealth Countries in Africa), about 155 countries in Africa, Asia, East Europe, and LatinAmerica are invited.

    35 Simon Freemantle and Jeremy Stevens, CII-Exim Bank Conclave on India Africa ProjectPartnership Confirms Thrust of India Inc. in Africa, Standard Bank Research Paper, 17March 2010.

    36 Sanusha Naidu, Upping the Ante in Africa: Indias Increasing Footprint Across the Con-tinent, in Emma Mawdsley and Gerard McCann,India in Africa: Changing Geographiesof Power, Oxford, Pambazuka Press, 2011.

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    28 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    Three Centres of African Studies have been set up in various Indianuniversities to encourage social science teaching and research on Afri-can Affairs. The Indian Council of Social Science Research has alsointroduced the Mandela Rhodes Scholarships Programme, which of-fers educational opportunities for African citizens to study at tertiaryinstitutions in South Africa.

    1.4.6 Agriculture and food securityCooperation in the field of agriculture is a central pillar of the India-Africa relationship. This cooperation has been strengthened and fur-ther developed with the impetus given by the two India-Africa ForumSummits in 2008 and 2011. Both Summits gave substantial priority tocooperation in the agricultural sector. Cooperation in this sector has,according to Indian and African leaders, great potential given thestrong complementarities between India and Africa in the agriculturalfield. Indias move towards economic and technical cooperation inAfrican agriculture over the past decade must be seen against the

    backdrop of declining support from traditional donors to this sector.Leaders of both India and African countries expressed enthusiasmabout developing Africas agriculture, to ensure food security.

    In the 2008 Summit, it was decided to strengthen cooperation in landdevelopment, water management, agricultural plantation, breeding

    technologies, food security, agro-processing machinery, combat agro-base diseases, experimental and demonstrative projects, and training.

    Leaders at the 2nd India-Africa Summit in Addis Ababa in 2011agreed to develop scientific research for raising agriculturalproductiv-ity, on the one hand, and the conservation of land and environment, onthe other. The aim is toensure food security for their people and to

    bring down the currently rising cost offood prices.37

    One of the main features of India-Africa cooperation in agriculture isthat India has actively focused on capacity-building and sharing ofexperience. Particular attention has been given to research and

    knowledge sharing methods. India has sent teams of farm expertsfrom the Indian Council of Agricultural Research (ICAR), to get first-hand knowledge of how African countries explore ways of improvingtheir agricultural practices. As a part of the capacity building program,scholarships were provided to 75 students from African countries eve-ry year from 2011 onwards in various agricultural universities in In-dia.38 Moreover the Prime Minister of India has proposed to establish

    37 Second AfricaIndia Forum Summit 2011, Addis Abeba AfricaIndia Framework forenhanced cooperation http://www.indiaafricasummit.nic.in/staticfile/framework-en.pdf

    38 Second Africa India Forum Summit 2011, op.cit, also see 2011 Africa-India CapacityBuilding Scholarship, http://www.fundsforngos.org/scholarships-2/2011-africaindia-capacity-building-scholarship/

    http://www.fundsforngos.org/scholarships-2/2011-africaindia-capacity-building-scholarship/http://www.fundsforngos.org/scholarships-2/2011-africaindia-capacity-building-scholarship/http://www.fundsforngos.org/scholarships-2/2011-africaindia-capacity-building-scholarship/http://www.fundsforngos.org/scholarships-2/2011-africaindia-capacity-building-scholarship/
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    India in Africa. Implications for Norwegian Foreign and Development Policies 29

    new institutions in the areas of agriculture and rural development. InDecember 2010, an MOU for cooperation in agricultural research andeducation was signed between the Department of Agricultural and Re-search (DAER) and ICAR of India and the Ethiopian Institute of Ag-ricultural Research (EIAR), Ethiopia. 39 The priority areas of coopera-tion include agricultural research in Horticulture, Crop Science, Fish-eries, Animal Science, Agricultural Engineering and Natural ResourceManagement, Agricultural Extension and Agricultural Education. Itwas agreed to extend cooperation through exchange of scientists,scholars, technologies, literature, as well as collaborative research pro-

    jects, and a draft biennial work plan was developed.

    India also made a commitment to raise Lines of Credit facilities to Af-

    rican agricultural sectors. The largest single LOC approved by the Ex-im Bank so far is the one to Ethiopia (US$ 640 million) for its Tinda-ho Sugar Project, and it is also expected to facilitate Indian invest-ments.40 The Exim Bank also extended an LOC of $27 million to Sen-egal for export of equipment for irrigation projects in 2006. Moreover,at the 2011 India- Africa Summit, Prime Minister Manmohan Singhannounced a grant of 75 billion CFA (160 million)to Senegal, for thesecond phase of the programme of mechanization of agriculture. 41

    Large scale acquisition of farmland in Africa has made media head-lines across the world. Some African countries are offering land on

    lease for up to 99 years to overseas farmers. Farmers from India havemigrated to these countries and begun farming. Countries which offersuch opportunities include Ethiopia, Malawi, Kenya, Uganda, Liberia,Ghana, Congo and Rwanda. Land that until a short time ago seemedof little outside interest is now being sought by international investors.Helped by the liberalisation of Indian policies on foreign direct in-vestment by Indian companies, these opportunities are tapped by Indi-an companies.

    Leading Indian investors in African agriculture include Karuturi AgroProducts, a subsidiary of Karuturi Global (one of the world's largest

    producers of cut roses). It has acquired 100,000 hectares of land in theJikao and Itang Districts of the Gambela region in Ethiopia, for grow-ing palm, cereal and pulses. It has also bought farm land in Kenya togrow sugar cane, palm oil, rice and vegetables. Another leading firm,Ruchi Soya Industries, acquired a 25-year lease for soyabean pro-cessing on 152,649 ha in Gambela and Benishangul Gumaz States ofEthiopia.42

    39 ICAR signed MoU with the Ethiopian Institute for Agricultural Research,http://www.icar.org.in/node/4151

    40 ibid41 Second AfricaIndia Forum Summit 2011, op.cit,42 Author collected data from farmland in Gambela , Addis Ababa , Ethiopia.

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    30 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    Tea and coffee companies from India have also acquired estates in Af-rica. Tata Coffee entered into an agreement in 2006 with the Ugandangovernment to set up a 3,600 metric tonnes per annum capacity plantin that country.43 The B. M. Khaitan-owned McLeod Russel India, thelargest integrated tea company in the world, has acquired UgandasRwenzori Tea Investments for $25 million, and Jay Shree Tea & In-dustries, which recently acquired three tea gardens in East Africa (twoin Rwanda and one in Uganda), is now looking at increasing its pres-ence in Africa. In addition to large companies like the above, individ-ual Indian farmers have moved, along with machinery and technology,to countries like Burkina-Faso and Namibia to make unused lands ar-able and to produce food grains.

    1.4.7 Health cooperationIn the health sector, the main ties between India and Africa are exportof pharmaceuticals, training of health personnel, joint research andmedical tourism. India and African countries have agreed to share ex-

    periences and support manufacturing capacities to make available af-fordable and quality pharmaceutical products. It has been decided tocollaborate in health-related research, information sharing onhealthcare and community health programmes.

    Under the framework of the Pharmaceutical Manufacturing Plan for

    Africa, the public and private sectors in India are cooperating with Af-rican firms for production of low cost medicines, especially for priori-ty areas like HIV, Malaria, TB and so forth. Other priorities includetransfer of technology and working together on common issues of in-tellectual property rights and patents. The Indian pharmaceutical in-dustry is one of the countrys fastest growing sectors, and much of theindustry growth is driven by exports. African countries account forabout 15% of the sectors $8- billion exports. Since a large number ofAfricans suffer from HIV, Indian ARV drugs are much in demand inAfrican countries. In addition to ARVs, Indian companies also exportanti-infectives.

    India also provides training and continuing education for health pro-fessionals.44Under the Pan-African e-network, the Indian governmentagreed to create direct linkages between Indian institutions and healthcentres in Africa.45 Through this project, many African health centres

    43 Ethiopia: India private investment reaches $4 billion, athttp://allafrica.com/stories/200811200996.htm(November, 2008).

    44 Second Africa-India Forum Summit 2011, Addis Ababa, Africa-India Framework forEnhanced Cooperation. http://indiaafricasummit.nic.in/staticfile/framework-en.pdf, Planof Action of The Framework For Cooperation of The India-Africa Forum Summit 2008,Delhi, India www.indianembassy.gov.et/.../Joint%20Plan%20of%20Action.doc

    45 India - Pan-African e-network for medical services and human resourceshttp://www.impactalliance.org/ev_en.php?ID=49340_201&ID2=DO_TOPIC

    http://allafrica.com/ethiopia/http://allafrica.com/ethiopia/http://indiaafricasummit.nic.in/staticfile/framework-en.pdfhttp://www.impactalliance.org/ev_en.php?ID=49340_201&ID2=DO_TOPIChttp://www.impactalliance.org/ev_en.php?ID=49340_201&ID2=DO_TOPIChttp://indiaafricasummit.nic.in/staticfile/framework-en.pdfhttp://allafrica.com/ethiopia/
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    India in Africa. Implications for Norwegian Foreign and Development Policies 31

    have been linked with top medical institutions in India for trainingdoctors, nurses and hospital staff.Moreover, in tele-medicine, 12 Su-

    per Speciality Hospitals in India have been connected to provide ser-vices to 53 remote hospitals in Africa.

    As medical treatment in India is advanced and cost-effective, medicaltourism is a fast-growing industry. The number of patients arrivingfrom Africa has multiplied over the past few years. For instance, it isexpected that the number of patients from Kenya travelling to Indiawill more than double to 50,000 during the current year, compared to

    previous years.46

    1.4.8 Climate and the environmentIndias position on climate change mediates between the interests andconcerns of developing countries and those of emerging economies.India and African countries agree on issues of climate change, basedon the approach of common but differentiated responsibility, equity,intellectual property rights and trade measures to figure in the climatenegotiations.47 Both India and African countries want developed coun-tries to provide funds and assistance to developing countries, and ad-dress climatic issues, to the benefit of the large number of marginal-ized and poor people. They call for industrialised countries to substan-tially cut their emissions and to make legally binding commitments for

    reducing GHG, while allowing voluntary cuts for developing coun-tries like India and African countries.

    However, African countries prefer money earmarked for developingand least developed countries to be made available differently. Theywould like to enter into negotiations with the European Union (EU) ontheir proposed roadmap for climate negotiation, if assistance is pro-vided. On the contrary, India wants more time for negotiations since itwould like first assess the commitments and progress of countries un-der the Kyoto Protocol before negotiating roadmaps proposed by EU.India has proposed the next round of negotiation to be held after the

    release of the report of Intergovernmental Panel on Climate Change in2015.

    At the Durban Conference in 2011, the EU projected India as a dealblocker for a new legally binding agreement. Though African coun-tries initially wanted India to accept the EU roadmap, they finally ac-cepted Indias position. The chief negotiator of the African group

    46 The first ever Indian medical tourism conference and exhibition in AFRICA - IMTD 2011KENYA http://www.prlog.org/11179965-the-first-ever-indian-medical-tourism-conference-and-exhibition-in-africa-imtd-2011-kenya.html

    47 Nitin Sethi & TNN Agencies, BASIC nod to Indias stand on climate talks, The TimesOf India, Nov 2,2011

    http://www.prlog.org/11179965-the-first-ever-indian-medical-tourism-conference-and-exhibition-in-africa-imtd-2011-kenya.htmlhttp://www.prlog.org/11179965-the-first-ever-indian-medical-tourism-conference-and-exhibition-in-africa-imtd-2011-kenya.htmlhttp://www.prlog.org/11179965-the-first-ever-indian-medical-tourism-conference-and-exhibition-in-africa-imtd-2011-kenya.htmlhttp://www.prlog.org/11179965-the-first-ever-indian-medical-tourism-conference-and-exhibition-in-africa-imtd-2011-kenya.html
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    32 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    pointed out that Indias per capita GHG emission was a small fractionof that of EU. India proposed that rich countries must make legally

    binding commitments to cut their emissions, because most of theGHG in the atmosphere was historically their product. Therefore,emission control by developing countries, based on equity and growthcombination, should be voluntarily.

    1.5. Country case studiesAfrica consists of more than 50 countries with an enormous internalvariation, and the relations between India and individual countriesvary considerably. The format of this report does not allow for a fullreflection of that diversity or a presentation of the relations with dif-

    ferent countries. Instead, two cases are presented below to presentmore in detail relations between Indian and two countries of key eco-nomic and strategic relevance: Nigeria and Sudan.

    1.5.1 NigeriaIndia established diplomatic relations with Nigeria even before thecountrys formal independence in 1960. The core principle of respectfor each others internal affairs has been a fundamental basis of rela-tions between the countries. A number of developments during theearly years of Nigerias independence tested the strength of the Indo-

    Nigerian relationship. The first was Sino-Indian border dispute of1962, during which Nigeria took a pro-Indian stance against most Af-rican countries that chose either abstention or even support for Chinascause. The second was during the war between India and Pakistan.Here, Nigeria chose neutrality. The third issue was the Nigerian civilwar. Though India was not known to have offered support for theFederal side, it did not recognise the Republic of Biafra, as did twoAfrican Commonwealth countries (Tanzania and Zambia). Severalexchanges of visits between leaders of both sides serve as evidence ofthe extent of diplomatic friendship been the two countries. Whatseems to be a major point in the diplomatic relations between India

    and Nigeria was the signing of a strategic partnership deal called theAbuja Declaration in 2007.

    In addition to economic and diplomatic ties, the bilateral relations aresupplemented by a relatively large degree of mutual migration. TheIndian High Commission in Nigeria believe that there are about35,000 Indians in Nigeria as at October 2010.48

    However, there are areas of subtle tension between the two countries.From the Nigerian end, a major concern is the treatment sometimes

    48 Figures obtained from the Indian High Commission in Nigeria.

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    India in Africa. Implications for Norwegian Foreign and Development Policies 33

    meted out to Nigerians who travel to India. The Nigeria governmenthas complained that Nigerians on legitimate trips to India are some-times harassed at the airport under the assumption that they could bedrug peddlers or engaged in other fraudulent business. Nigeria has ar-gued that while citizens of both countries may be engaging in illegalactivities, it is wrong to consider all Nigerian visitors as potential sus-

    pects. From the Indian end, concern has been expressed at the safetyof Indians who are being kidnapped or suffered attacks from armedrobbers.

    According to the Indian High Commission in Nigeria, Indo-Nigeriatrade reached $ 10.2 billion during 2008-2009, although global reces-sion brought this down to $ 8.7 billion in 2009-10. Nigeria is now In-

    dias largest trading partner in Africa. Indias exports to Nigeria aredominated by manufactured items such as machinery, pharmaceuti-cals, electronics, transport equipment etc. The main non-oil importsof India from Nigeria include metaliferous ores and metal scraps, non-ferrous metals wood and wood products and cashew nuts. The balanceof trade has been in Nigerias favour, due to large Indian imports ofcrude. On the industrial front, Indian companies in Nigeria are secondlargest in terms of employment of Nigerians. Some areas of Indias

    business ties with Nigeria are pharmaceuticals, telecommunication,retailing and vehicles.

    Nigeria is believed to have total oil reserves of 36 billion barrels andranks seventh in terms of natural gas reserves at 187 trillion cubic feet.The Nigerian oil and gas sector is riddled with complexities. Histori-cally, there have been problems with the management of the resource.Often at the centre of these conflicts is the fundamental clash betweenlocal claimsand national interest.49 Over the decades, policies bysuccessive Nigerian governments have also been confusing - with in-stitutions created and disbanded and policies formulated and reversedin the attempt to find a structure that will satisfy local claims and na-tional interest. This is made all the more difficult by the nature of thevarious relationships the countrys energy sector has with external ac-

    tors.

    Three more recent developments are crucial to international engage-ment in the oil industry. The first is the policy of opening up oil

    blocks to foreign investors. Under President Obasanjo, a number offoreign oil companies were allocated blocks. Apart from India, Chi-nas CNOOC Limited had the Right of First Refusal (RoFR) of aboutseven blocks in exchange for about $2.5billon from the Export-ImportBank of China, while two oil blocks were awarded to Korea National

    49 For more on this, see, Abiodun Alao, Natural Resources and Conflict in Africa: TheTragedy of Endowment, Rochester: University of Rochester Press, 2007.

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    34 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    Oil Company (KNOC) to guarantee investments in the downstreamsector.

    The second is the efforts made by the present government to ensurethat Nigerias oil export is free from sabotage and protests from the oil

    producing communities. After decades of protests, the governmentreached a form of agreement with the militants in the Niger Delta re-gion. Two steps taken by the government helped to abate the protestsin the region, at least initially. These are the granting of an AmnestyProgram and the establishment of a special Federal Ministry dedicatedto the development of the region.

    The third is the Petroleum Industry Bill, which is likely to affect the

    way international oil companies operate in Nigeria. Central to the billis the government's desire to overhaul the fiscal and operationalframework of the oil and gas industry. The bill's main aims are to re-organise and improve the efficiency of the Nigerian National Petrole-um Corporation (NNPC); revise the countrys fiscal policy, with thecompanies engaged in upstream petroleum operations now to paycompany income tax and to increase the local content requirement.

    There is, however, opposition to the bill. For example, parliamentari-ans from Nigeria's six oil-producing states object to the fact that itdoes not address the issue of distribution of oil revenues. The senators

    argue that the bill focuses only on production and commercial aspectswithout giving due consideration to the region where it is being ex-

    plored and the local communities of the area. International oil compa-nies operating in the country have unanimously disapproved the bill,with many of them expressing concerns that if the bill is passed theymay have to reduce their investments in Nigeria.50

    In recent years Nigeria has been one of the main sources of crude forIndia, with around 8% to 12% of Indian crude coming from Nigeria.51

    Nigeria is attractive for India because its crude oil is light and com-mands a premium in the international market due to its quality. The

    Special Adviser to the Nigerian President on petroleum matters hasresponded positively to the Indian request for more Nigerian crude oil.

    Apart from trade in hydrocarbons, Indian has also come decisivelyinto the Nigerian upstream sector and refining. Between 2005 and2007, Indian companies participated in Nigerian bid rounds and won 8oil blocks: ONGC Mittal (OMEL) won 3, OVL 3, Sterling 2, and Es-sar 1.52 In August 2005, ONGC Videsh Ltd (OVK) won 2 blocks,

    50 Chevron expressed its concern over the bill saying that deepwater oilfields in Nigeriawould fail under the proposed legislation due to ill-advised fiscal terms.

    51 Figures from the Indian High Commission, Abuja, Nigeria.52 It was later discovered that one of the blocks (275) may not be lucrative.

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    India in Africa. Implications for Norwegian Foreign and Development Policies 35

    which hold reserves of two billion barrels each, committing US$ 485million in signing amount. The Indian government granted ONGC theapproval to invest $359 million during the first exploration phase inthe two deep-water blocks. ONGC Videsh is also involved in the Ni-geria-Sao Tome joint development zone and backed a 15 % stake inan oil block.

    The oil sector has also become part of Indias infrastructural develop-ment activities. In 2006, the Indian Company Mittal Energy Limitedcommitted to invest $6 billion in a new 180,000 barrels per day refin-ery; 2000 megawatts power generation and an East-West rail line orany other downstream project as determined by the country's steeringcommittee. OMEL was also given the Right of First Refusal on a

    block in exchange for providing a feasibility study into a new railroad.There have, however, been problems with the deals implementation,as the Indians have not honoured their commitment. Specifically, Ni-geria has asked the Oil and Natural Gas Corp (ONGC) and steel bil-lionaire Lakshmi N Mittal to fulfil its USD 6-billion commitment ofinvesting in infrastructure. The Nigerian Parliament ordered an in-quiry to probe alleged irregularities.53 By November 2010, thingsseem to have somewhat stabilised, as the Indians had begun to takethe issue of infrastructural development seriously, especially with therefinery and the power generation. There were slight concerns,though, with the railway, and while the Nigerian government would

    not exempt India from the agreement, there would be no deadline im-posed to make this delivery.

    It seems certain that the relationship between India and Nigeria willcontinue to expand. While India will continue to be active in manyaspects of Nigerias economic life, it is clear that the oil and gas sectorwill remain the main centre of interest and attention. Nigerians are in-terested in exploring further the relationship with India in this sector.But they are also determined to do this on a platform that is fair andmutually beneficial. For a country that has suffered significantly in thehands of oil multinational corporations from Europe and America,

    there is a natural tendency for Nigerians to be instantly suspicious ofall forms of external involvement in the politics of their countrys oil.To retain its legitimacy, India will have to show that it is not just an-other country interested in exploiting Nigerias oil without assistingthe country.

    53 The non-cooperation from India did not come to some as a surprise. A Nigeria academicinterviewed for this paper pointed out that Indias action was just a strategy to elicit fa-vours from the federal government, and at the end leaving us with nothing. Interview withProfessor Omole, Professor of International Relations, Obafemi Awolowo University.

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    36 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    1.5.2 SudanIn recent years, Sudan has emerged as a small but fast-growing oil

    producer, first with the help of American and European corporationsand, more recently, with investments from China, India and Malaysia.Before the countrys partition, Sudan pumped about 500,000 barrelsof oil a day, and had become Sub-Saharan Africas third largest oil

    producer.54 After completing an oil export pipeline that runs from cen-tral Sudan to Port Sudan in 1999, its oil export has grown rapidly. In2010, around 75% of Sudan's export revenue came from oil. Accord-ing to the 2010 BP Statistical Energy Survey, Sudan's proven oil re-serves are estimated at about 700 million barrels. There are also largereserves of natural gas, estimated at 3 trillion cubic feet.

    To attract more foreign investment, Sudan removed key price con-trols, liberalised its investment code and exchange regime, and re-duced trade restrictions. These reforms and high oil prices created aneconomic boom in the country, with growth rates exceeding 5%.55

    Oil has been a controversial issue ever since it was discovered inSouth Sudan in the 1970s. For 21 years thereafter, the country wasembroiled in civil war between the north and the south. Control overoilfields was heatedly contested between warring factions.56 In 1984,due to deteriorating relations between Washington and Khartoum,American companies, was off limits to Sudan. Similarly, other oil ma-

    jors such as British Petroleum, Royal Dutch Shell and Total shiedaway from exploration and production activities in the country duringthe 1980s.57

    During the North-South civil war, the SPLA stated that oil companiesin Sudan were legitimate military targets, because of the wealth theyextracted for Khartoum from the south. Chinese, Malaysian, Canadianand European companies all experienced attacks and kidnappings,which often led to a suspension of activities and a constant preoccupa-tion with security.58

    The Sudanese governments military tactics also led western corpora-tions, mainly Canadas Talisman Energy, to face heavy criticism for

    being complicit in the violence. As a result of such pressure, Talismanand other western corporations withdrew from Sudan, thus opening up

    54 Sudan now Africa's third largest oil producer http://www.afrol.com/articles/2188955 Sudan: African Economic Outlook

    http://www.africaneconomicoutlook.org/en/countries/east-africa/sudan/56 Oil in Sudan, http://www.sudantribune.com/IMG/pdf/Oil_industry_in_Sudan.pdf57 Luke Patey, State Rules: Oil companies and armed conflict in Sudan, Third World

    Quarterly, Volume 28, Issue 5, 2007, pp 997-101658 Luke Patey, Fragile Fortunes: Indias Oil venture into war-torn Sudan, in Emma

    Mawdsley and Gerard McCann, India in Africa: Changing Geographies of Power, Ox-ford, Pambazuka Press, 2011

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    India in Africa. Implications for Norwegian Foreign and Development Policies 37

    the way for OVL. In October 2002, Talisman Energy announced thatOVL would buy its share, and hoped to finalize the deal by the end ofthe year. Other companies, such as Lundin of Sweden and OMV ofAustria, also decided to sell their shares in Sudanese oil fields.

    Eventually, the Sudanese government renewed operations in the petro-leum sector by striking partnerships with Asian oil companies. TheSudanese company, Sudapet Ltd., has developed joint ventures withforeign companies in downstream projects, led by the China NationalPetroleum Corporation (CNPC), which owns the biggest single sharein the consortium of the GNPC(40%); Indias Oil and Natural GasCorporation (OVL), and Malaysias Petronas (with a share of 30% inthe consortium).59

    Indias investment in Sudanese oil fields was controversial in India aswell. At first, the debate mainly focused on the companys safety ra-ther than the morality of investing in a country with a dubious humanrights record. The approval of the $720 million investment had manyopponents. Some argued that committing hundreds of millions of dol-lars in a war-torn region was too risky and that OVL risked losing itsinvestment.60 The rationale of investing in a country ruled by a gov-ernment that had harboured international terrorists was also ques-tioned.

    However, OVL argued that by withdrawing, India would miss a gold-en opportunity (Oil and Gas Journal 2003). While the government didnot want OVLs Sudan investment to become a political embarrass-ment, it decided to invest in Sudans oil industry, in spite of the risksinvolved. The fact that CNPC and Petronas remained in the country aswestern oil companies left was seen as encouraging. Because of theirhigh levels of state-ownership, OVL and other Asian oil companiescannot be influenced in the same manner as western companies, whichtend to fear damage to their reputations in home markets.

    The Sudanese government backed the entry of OVL. While coopera-

    tion with China was considered important, they found it better to di-versify corporate and political partners than to be overly dependent onChina. Thus, the agreement with India was part of the Sudan govern-ments largerforeign policy agenda.

    While oil remains at the heart of relations and dominates Sudanstrade with India, the country has also been included in Indias en-larged Focus Africa programme that was launched in 2002 to expand

    59 Oil Fact Sheet On Sudan 1,September 2006,http://africa.berkeley.edu/sudan/oil/sudanoilfactsheet-sept06.pdf

    60 Patey, 2011, op.cit.

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    38 Stein Sundstl Eriksen, Aparajita Biswas, Ajay Dubey, yvind Eggen and Mzukuzi Qobo

    economic interactions with seven major trading partners. The IndianGovernment has identified five priority sectors in addition to oil andmanufacturing. These are infrastructure, agriculture, human resourcedevelopment, information and communications technologies, andsmall and medium industries. India also extended an EXIM Bank Lineof credit of US$ 50 million.

    Between 1996 and 2005, Sudan attracted the fourth largest share($964 million) of Indian foreign direct investment (FDI).61 ONGCVidesh Ltd. (OVL) has played a leading role. Besides its direct oil op-eration, the company has completed a 741-km pipeline project fromKhartoum Refinery to Port Sudan for transporting petroleum products,at a cost of US $ 1200 million. The other consortium members besides

    OVL were CNPC with 40% participating interest, Petronas with 30%and Sudapet with 5% stake, respectively. The contract is for 1 milliontonnes of crude oil per year from Sudan which, in equity oil parlance,will mean a growth rate of 12% of the $750 million Indian invest-ment.62 According to the terms of the deal, OVLs share from the oil-field will total 3 million tonnes of oil and gas per year.

    OVL has a 25% stake in the Greater Nile Oil Project which stands forabout half of the countrys production. Moreover, OVL has complet-ed a 741-km pipeline project from Khartoum Refinery to Port Sudan.In return, India expects Sudan to give 1 million barrels of crude oil per

    year. ONGC was also awarded the contract to build a new refinery inPort Sudan with a capacity to process 100,000 bpd, costing $1.2 bil-lion.63 OVL also signed a deal to develop the Thar Jath oilfields locat-ed in South Sudan. The deal was signed with the Sudanese White NilePetroleum Company - a consortium of Malaysian state oil firm,Petronas, which owns 68%, OVL which has a 24% stake, and Sudansstate oil company Sudapet, with 7%.

    India foresaw the split of Sudan a few years ago and embarked on ef-forts to build relationships with the would be leadership of SouthSudan. This included regular invitations to South Sudan officials to

    visit India for training and exchange programmes from 2006 onwards.In 2007, India became one of the first countries to open a consulate inJuba. Several India companies are active in South Sudan. The currentVice President of India, Mr. Hamid Ansari, led a high level delegationto participate in the Independence Day celebrations of South Sudan,on 9 July 2011.64

    61 Mea Report, India-Sudan Relations, http://mea.gov.in/mystart.php?id=5004452662 nformation from interview with ONGC officials in Khartoum.63 Information from interview with ONGC officials in Khartoum.64 Ansari to attend 'birth day' of South Sudan, http://expressbuzz.com/topic/ansari -to-

    attend-birth-day-of-south-sudan/292219.html

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    India in Africa. Implications for Norwegian Foreign and Development Policies 39

    The ruling National Congress Party (NCP) in the North and the SudanPeoples Liberation Army (SPLA) in the South have agreed in princi-

    ple to protect oilfields and infrastructure through the secession pro-cess. However, the demarcation of the border presents major risks,given the presence of several active conflict zones. The bone of con-tention is that, the majority of proven reserves are located in southernSudan, in the Muglad and Melut Basins. Southern Sudan accounts for

    between 75-80% of Sudan's daily output, whereas the infrastructurefor extracting and exporting South Sudans oil is based in Port Sudanin the north, on the Red Sea. This means that while Juba is reliant onKhartoum to transport the oil and share the profits, Khartoum is relianton South Sudan for most of its oil exports. Indeed, since the split,

    North Sudan has lost 75% of its oil production sources. 65

    Moreover, in North Sudan, most of the productive oilfields are locatedin South Kordofan state, another disputed territory. It currently pro-duces about 20% of Sudans overall daily output of 500,000 barrels.The rest is pumped from oilfields in South Sudan. Naturally, NorthSudan, which currently depends on oil revenues for some 45% of its

    budget, is scrambling to find other sources of income to make up forthe loss.

    The Comprehensive Peace Agreement in 2005 stipulated that thenorth and south were to share the income from oil production 50/50

    from July 2005 to July 2011. However, so far, there is no settlementon this issue. At the time of writing (February, 2012), there are reportsthat the two Sudans are on the brink of a new war. Sudan has confis-cated shipments of oil because of lack of payment for use of the pipe-line. In retaliation, South Sudan has shut down its oil production,thereby losing most of its export revenue.

    Renewed armed conflict would almost certainly be centred on controlover oil fields that lie across the North-South border in Unity Stateand Upper Nile State, where there have been violent confrontations.Indias oil investments would very much be on the frontline should

    hostilities breakout. Furthermore, there is no guarantee that even if theNorth and South maintain a peaceful border that southern Sudan willremain very secure. Inter-communal conflicts continue, and over2,000 people were killed in 2009 from violence between ethn