Sachin Chaturvedi

10th CII-EXIM Bank Conclave on India-Africa Project Partnership 

Development Partnership and India-Africa Relations:

Trends and Prospects

Policy Focus in Engagement with Africa • Gradual Evolution of different modalities

• Large emphasis on Capacity building and skill transfer

• Trade and investment

• Grants and Project Support with LoCs

• Investments mainly by the companies telecommunications and chemical and mining.

1

India’s Development CompactDevelopment Combat

Capacity Building

Trade and Investments

LOCs Grants Technology

Capacity Building: •Training programme in host country• Sending experts to partner countries• Scholarships• Third Country Training programmes

Trade and Investments:•Duty Free Trade Preference •Trade permits

8

India’s Development CompactGrants:•Debt forgiveness•Grant in Kind

LOCs:•Concessional loan interest on with or without capacity building component•Commercial rate of interest for different time periods

Technology:•Technical cooperation•Joint scientific and academic research•Turnkey Projects•Technology Transfer with or without component of capacity building•Subsidizing licensing

9

Institution Building

• Government of India approved a USD 30 million line of credit to Angola for setting up an Industrial Development Park

• An amount of 700 million dollars will be made available by Government of India to establish new institutions and training programmes in Africa.

• A MoU was signed with the Central African Republic for setting up an IT Centre for Excellence in Bangui

• A multi member team of Indian customs officers provided support for developing capacities to undertake customs valuation to Ethiopian revenue and customs authority

2

Institution Building

•Capacity in Tanzania to deal with cyber crime

•Specialised courses and institution creation by the Indian Institute of Foreign Trade in Kampala, Uganda.

•Five human settlement institutions to support low cost housing (Zambia, Kenya, Togo, Mauritania and the DRC)

•Institutional Support for Pan Africa e-Network

2

Africa E-Connectivity Project

• The current total project cost is about US$ 125 million, coordinated by the Telecommunications Consultants India Limited (TCIL)

• Besides, the e-Network would provide Tele-Medicine services by way of on line medical consultation to the medical practitioners at the Patient End Location in Africa by Indian Medical specialists in various disciplines/specialties selected by African Union for its Member States.

• 116 sites/centres in Africa and 5 universities and 11 Super Specialty Hospitals from India have been integrated with the e-Network.

• 47 African countries (30 LDCs) have thus far signed the agreement for e-Network with the Indian service provider TCIL.3

Focus on Capacity Development

• The Indian Technical and Economic Cooperation (ITEC) and Special Commonwealth Assistance for Africa Programme (SCAAP)

• Utilization of training slots to LDCs (by region) has grown steadily over the year

• Fellowships/Scholarships provided to African Candidates in 2010-11

• 85 fellowships under C V Raman International Fellowship for collaborative research with leading research groups in universities and other Indian institutions in various areas of Science & Technology.

• 71 special agricultural scholarships for M.Sc. and Ph.D. in Agricultural and related areas.

4

Trade: Duty-free Access

• Duty-Free Items: Applied Customs duty on 85% of India’s total tariff lines to be removed over a period of 5 years with 20% reduction each year.

• Positive List: In addition to the 85% duty-free tariff lines, preferential market access as per Margin of Preference (MOP) is available on about 9% tariff lines.

• The MOP ranges from 10% to 100% on different items and is available on the applied rate of duty as on dated of imports.

• Exclusion List: Contains only 6% of total tariff lines (326 items) on which no tariff preference is available.

5

India's trade linkages with world and Africa

In billion US$Average Exports

Share (%)

CAGR (%)

2005 2006 2007 2008 2009 2010 2011 2005-11 2005-11 2005-11

Export

World Total

98.21 120.55 153.77 177.7 165.18 222.92 294.80 176.16 100 20.1

Africa 5.86 8.59 11.90 12.77 11.21 15.82 21.12 12.47 7.08 23.8

Import

World Total

139.88 176.66 235.02 281.46 257.66 350.78 446.46 269.7 100 21.34

Africa 4.44 10.80 16.15 20.42 18.88 29.31 35.89 19.41 7.2 41.66

6

Trade: Support on IP• India is also among the countries which are supporting LDCs

in their efforts to extend the July 1, 2013 deadline for the implementation of the TRIPs.

• LDCs on 15 November tabled a proposal on extending the current deadline of 1 July 2013 for them to implement the World Trade Organization's (WTO) TRIPS Agreement.

• TRIPS Council in November 2005 decided that LDCs shall not be required to apply the provisions of the TRIPS Agreement, other than Articles 3,4,5, until 1 July 2013, or until such a date on which they cease to be an LDC, whichever date is earlier.

• This decision did not apply for pharmaceuticals for which they were given exemption till 2016.

7

Mozambique: Solar Photovoltaic

• Establishment of a Joint Commission for Economic, Cultural, Scientific and Technical Cooperation between India and Mozambique in 2002.

• India has extended 13 Lines of Credit to Mozambique worth US$ 644.73 million for projects in the areas of rural electrification, water management and Information Technology

• India has provided the LoC for financing a Solar Photo Voltaic Module Manufacturing plant in Mozambique. the line of credit was effective from April 23, 2012.

11

Indian line of Credit to Mozambique Year Purpose Amount (US$

million)1982 General ( India has cancelled with the HIPC initiatives in 2003 ) 5.30

2004 Finance export of items like electricity equipment, water drilling machinery equipments, agro-inputs and drip irrigation, vegetable oil refining plant and machinery, oil storage tank, blending & filling, workshop machinery.

20

2006 Electrification of Gaza province in Mozambique 20

2008 For financing transfer of water drilling technology and equipment from India 20

2008 For financing IT Park project which will comprise construction of a building and (a) an incubator facility, (b) research and learning center and (c) a technology park and administrative facility. 

25

2009 Rural electrification projects in the provinces of Gaza, Zambezia and Nampula in Mozambique 30

2010 Rural electrification projects in the provinces of Cabo Delgado, Manica and Niassa Provinces, in Mozambique.

25

2011 For enhancing Productivity of Rice-Wheat-Maize Cultivation in Mozambique 20

2011 For financing a Solar Photo Voltaic Module Manufacturing plant in Mozambique. 13

2012 For improving the quality of power supply in Mozambique. 250

2013 For rural drinking water project extension in Mozambique 19.72

2013 For rehabilitation of road between Tica, Buzi and Nova Sofala in Mozambique 149.72

2013 For construction of 1200 houses in Mozambique 47

Total 644.73

13

Mozambique: Solar Photovoltaic

The project, which was carried out in Beluluane, in the Boane district of Maputo province, southern Mozambique belongs to the National Energy Fund (FUNAE).

Plant, built on a two-hectare plot, to manufacture solar panels to provide electricity in the remotest areas of the country.

Constructing the factory will create 700 jobs, and once fully operational the factory will employ 70 people.

The factory will reduce the cost of importing solar panels, which is estimated to be running at between US$ 5 million and US$ 6 million a year.

14

Mozambique: Solar Photovoltaic

• Contract approved on ,May 8, 2012 and advanced payment released on Nov 08, 2012 and the projected was started in January 2013 and end of this project in September 2013

• It is first kind of (Photovoltaic solar energy) project in Mozambique capacity of 5 MW per year

• High quality Equipment and material was used in the plant and during the field visit General Manager told us that 70 percent of civil work is completed

• Plant Machine’s Imported from Italy and security related item imported from South Africa, and Raw material imported from India.

15

Mozambique: Solar Photovoltaic

• During the field visit plant executive members told us that the major achievement of this project is that it will be complete before 2 months schedule times of completion.

• After completion of this project AIL will be hand over to FUNAE (Mozambique) company

• India has provided training to 17 Mozambique people who was directly engage this project by request from the FUNE company.

• Consultant of this project told us that It is very important project for rural electricity (village, school, hospital) in Mozambique and project is designed according to the Mozambique standard.

15

Mozambique: Solar Photovoltaic (Source: IRENA 2012 and High commission of India,Maputo)

13

Mozambique: Solar Photovoltaic

• What is the preparation to handle this output in future?• US has proposed to block exports of solar panels from China

(2012) leading to substantial decline in Chinese exports. • China is keen to diversify to other markets• DGAD (Directorate General of Anti-Dumping and Allied

Duties has already taken up investigation against China/USA• USA has moved against India for local content requirement

clause under the Jawaharlal Nehru National Solar Mission (JNNSM). In the Second phase India has relaxed the condition of 30 per cent

18

Future Prospects: New Definition of ‘AID’

• Worker Remittances as “Development Aid Flows”

• Private Foreign Investments as “Development Aid Flows”

• Private funds from NGOs/Foundations as “Development Aid

Flow”

• Market Value of “Grants” instead of face value

• Problem of Miscounted Aid

• Resource Flows for Global Commons

• Distinction between “Net” and “Gross” ODA

• Complex aggregate of resources flows10

South-South Cooperation: Key Features Equality between partners:

• No distinction between donor and recipient countries as both are involved in sharing the development burden of each other

• Resulting in a horizontal cooperation.

Fostering national and collective self-reliance:

• SSC is based on notion of developing the South through equitable access to trade, investment and technology within

an institutional framework.

• Aims to discover and exploit the complementarities in production, consumption, trade , investment, technology

and development cooperation. 0

South-South Cooperation: Key Features Mutual Benefit:

• Fundamental idea of SSC is to assist each other for a win- win partnership by sharing most appropriate technologies

• Realistic and cost effective solutions and financing at reasonable cost and most importantly without conditionality

attached

Nature of Non-Conditionality:

• SSC gives the power of independent decision making to the partner countries keeping in mind their aspirations and

special values.

• Priorities and policies of the partner countries are not hindered in any manner which makes SSC more efficient and cost-effective.

0

South-South Cooperation: Key Features Voluntary and Demand-Driven:

• Mainly based on the demand-driven approach and responds to the development priorities of the partner countries

• Reflects the voluntary nature of cooperation of the South

• Demand-driven approach of SSC makes the whole process benefiting the partner countries as their own interests and capacity enhancing given their national priorities.

Fostering Joint development and mutual coexistence:

• SSC helps in reshaping and transforming the broader areas into fostering joint development and mutual coexistence

• Enables in seeking common solutions to transnational problems and creating a peaceful cooperation.

0

South-South Cooperation: Key Features • Multiplicity of Approaches:

• South is not a homogenous entity

• Several areas where distinct practices have emerged across the major Southern providers

• Some countries from the South have clear articulation of development cooperation policies

• While in other cases specific aspects of common principles are more vigorously followed than the others like providing loans in a major way or focusing only on a sector like health etc.

0