Bilateral Trade Target of USD 90 Billion Between India and Africa Achievable By 2015: Anand Sharma
1 October 2013
The Union Minister of Commerce & Industry Shri Anand Sharma and Mr. Rob Davies, Minister of Trade and Industry, South Africa today co-chaired the third meeting of India-Africa Trade Ministers in Johannesburg. The meeting was attended by Chairperson of African Union Commission Dr. Nkosazana Dlamini Zuma and 11 trade ministers from Africa, representatives of New Partnership for Africa`s Development (NEPAD), and regional economic communities like Common Market for Eastern and Southern Africa (COMESA), Economic Community Of West African States (ECOWAS) and Southern African Development Community (SADC).
In his opening remarks Shri Sharma mentioned that the trade ministers meeting was a significant event in the annual calendar of exchanges between India and Africa. He said that the partnership between India and Africa was distinct and different and a strategic relationship. The robust economic growth of both India and Africa provided new opportunities of forging a development partnership which would not just be focussed on transactional trade but subsume capacity building, institution building, human resource development and productive investments. Shri Sharma mentioned that the governments of India and Africa were confronted by challenges of currency volatility, high inflation, commodity volatility, and similar issues of underdevelopment and poverty. He further added that the India Africa Forum Summit declarations have given a blueprint of the partnership between these two regions covering a wide range of sectors. A large number of regional and pan-African institutions have been established in Africa for capacity building and skill development, which enable development of rich human resource. He mentioned that 22,000 scholarships were being administered for African students. He said that the economic engagement has been a buoyant one as investments from India to Africa has crossed USD 50 billion in the last decade and trade has crossed USD 70 billion. He mentioned that the bilateral trade target of USD 90 billion by 2015 is a modest one and is certainly achievable.
Chairperson of African Union Commission Dr. Zuma in her remarks mentioned that GDP of BRICS economies is set to overtake that of G-7 countries soon. She mentioned that the rich resource base of Africa have driven the economic growth of the world. The plan of industrialization aims to increase value addition, enhance regional economic integration with an aim to achieve a pan-African free trade area. Dr. Zuma appreciated “Indian investments in infrastructure, mining, energy sector which enabled significant value addition in Africa and skill upgradation which would lead to sustainable development and help in poverty eradication.” She sought greater diversification of Indian investments with greater thrust on joint ventures and participation of women. She said that interest of developing countries and LDCs are safeguarded especially in the area of food security in the forthcoming Bali Ministerial Meeting on WTO. She further said that the current trade facilitation package had certain implementation challenges for African countries as it entailed huge resource commitments and therefore urged for a balanced outcome at Bali.
In his remarks Mr Davies spoke about the need of ushering in an age of industrialization in Africa with a greater thrust on value addition, moving away from commodity led export models. In this context, he appreciated the engagement with India which was in the nature of a true developmental partnership. He mentioned that “Indian investments into Africa had seen a phenomenal growth” and appreciated that “these had led to considerable value addition and employment generation in Africa.” He also stressed upon the need of greater regional economic integration in Africa through the architecture of regional free trade agreements, which would be building blocks for a continental free trade agreement in Africa. Intra -African trade is barely 12% contrasted with other dynamic regions of the world. He mentioned about the Programme for Infrastructure Development in Africa (PIDA) which aims to strengthen infrastructure development in Africa. Indian imports from Africa have risen by 14% but there was need to shift to value added exports. He recalled the BRICS Summit and said that the BRICS development bank idea should become a reality to ensure investments not only in each others’ economies but also in Africa.
Intervening in the ministerial meeting, Shri Sharma said that “the forthcoming Bali ministerial meeting was an opportunity to give momentum to the Doha development round, which has its heart a strong development agenda.” He mentioned that there is a need to address the genuine concerns of food security of the developing countries. The interests of subsistence farmers must be protected and a multi lateral trade regime must address livelihood concerns of small and marginal farmers of the developing countries. He was of the opinion that public stock holding for food security must be accepted as this is essential for assuring food security of millions of poor in the developing countries. He also said that the LDCs would also need resources to meet the commitments on trade facilitation including for infrastructure upgradation at ports. He said that India has supported the need for a package of LDCs in Bali. He informed the Trade Ministers about the Duty Free Quota Free Market Access Scheme for LDCs introduced by India which provides a huge opportunity for market access for African LDCs to the Indian market.
The second meeting of the India-Africa Business Council co-chaired by Shri Sunil Bharti Mittal from the Indian side and Dr. Bright Chunga was also convened and the industry leaders collectively identified priority sectors of private investment and presented a report to the Trade Ministers.
Yesterday, Shri Sharma had a bilateral meeting with his counterpart Minister Mr. Rob Davies where he urged for an early conclusion of the India- Southern African Customs Union (SACU) Preferential Trade Agreement negotiations. They also discussed the whole range of bilateral issues, expressing satisfaction on the healthy growth of trade which had touched USD 14 billion and investment flows from India had crossed USD 7 billion. They also reviewed the progress of negotiations in the Doha round and preparations for the Bali ministerial meeting.