CONFERENCE ON - TRADE AND INVESTMENT CONTOURS

The Conference on ‘India Africa Trade and Investment Contours’ was held on 15th July, 2015 at the Institute in the Delhi campus and was attended by the dignitaries of several African countries, corporate leaders who had business interests in Africa and by leading academicians with a strong knowledge of India-Africa trade relations. The agenda of the event was to discuss the opportunities and technicalities of doing Commodity business and Service oriented business in Africa for Indian firms and in this process also to sensitize the students of IIFT with the challenges and opportunities that Africa presents.

The Conference was inaugurated by Dr Surajit Mitra – Director and Vice Chancellor of the Institute. Dr. Mitra, in his Inaugural Address, congratulated the International Projects Division for undertaking such an initiative to hold a conference on India-Africa trade and investment flows. He said that the conference was aimed at sensitizing the management students about the opportunities that lie in Africa for Indian businesses and provide a platform for other professionals and academicians who have extensive knowledge about this topic to share their opinions and suggest improvements. He emphasized the contribution that India can make in human resource development and in providing affordable technology to Africa. He concluded that greater value addition in India-Africa trade should be the objective and joint conferences like these serve as an ideal platform to connect to the wide horizon of trade and investment opportunities.

An informative presentation on business and demographics of Africa was made by IIFT students. This presentation highlighted the changing scenario of African countries with regard to economic, social and cultural achievements in the last decade. The Economist, which once rejected the continent as hopeless and without any future had to reassess its stand now as Africa is emerging rapidly. Economic growth in Africa is being led by rise in service sector, developing financial services and strong household spending - indicating the huge investment opportunities for Indian companies. The students presented the success stories of Airtel and Cairn India in Africa followed by a brief outline of the 2nd India-Africa Forum Summit held in Addis Ababa, .

It was followed by a welcome note from Dr.(Mrs) Satinder Bhatia, Chairperson of the International Project Division of IIFT. She underlined the contributions of IIFT in India’s endeavors for African outreach. She spoke about the recently concluded Conference in Dar es Salaam, which was about the Enhancing the Competitiveness of the Tanzanian Economy and the role of India in its development. This conference was in addition to the capacity development program conducted in Tanzania and 32 other countries in Africa over 2008 to date aiming at improving the international competitiveness of countries in Africa.

The Keynote Address was given by Mr. Khaleel Rahim ( CMD, State Transport Corporation and an alumnus of IIFT). He mentioned how resource-rich Africa has risen to become a significant trade partner of India. This can be determined from the fact that the India- Africa trade over the years has grown to USD 135 billion as of date. State Transport Corporation has played a key role in establishing crucial trade links between both the regions and facilitated identifying market opportunities in Africa. Mr. Rahim explained the impact of energy and food security measures on trade and also mentioned that relaxed Visa regulations would certainly encourage Indian businesses to head to Africa. India with its huge service sector prowess and knowledge capital can actively involve in skill development of emerging African countries, mostly in the sectors of pharmaceuticals and financial services.

Technical Session – I: India-Africa Trade in Goods

The session was led by Mr. Sudhir Jaiswal,Vice President - Commercial and Planning, International Operations at Mahindra & Mahindra. He set the stage for an intriguing discussion on the possibilities of India-Africa Trade by revealing some of the macroeconomic statistics of Africa as a continent and the opportunities they present. He later specifically spoke about how Mahindra and Mahindra initiated the creation of an entire subsidiary in and how it had become one of the fastest growing brands in South Africa after its creation in 2004.

Dr. Tarun Bajaj- General Manager, Agricultural and Processed Food Products Export Development Authority (APEDA) gave a picture of the current scenario in agro-commodity trade between India and Africa. He mentioned that though India’s major agricultural trade is with EU, USA, Brazil, China and Russia, the primary commodity trade between India and Africa shows potential and has grown steadily over the years. The cause of concern is for value- added products or processed products whose trade volume has been limited. There is potential for increased trade of Indian ethnic food, biscuits and processed fruits to grow in African consumer markets. Speaking about Africa’s strength, he mentioned about the relatively less phyto-sanitary and SPS barriers and as for weakness he spoke about the regulatory hurdles and high import duties. He cautioned that India has to be the first mover since it faces tough competition from EU and China. He urged the Indian businesses to make cost cutting as their objective for that is the only way one could compete in a price-sensitive African market.

The next presentation was by Bopane Masoebe, First secretary at Lesotho High Commission on ‘Invest in Lesotho’. Ms Bopane Masoebe pitched for investment in Lesotho. She gave a profile of Lesotho and mentioned that despite its small size and population base, the country offers enormous opportunities for investment and growth. Lesotho offers attractive incentives for investors by giving them a free access to several FTAs, access to South African ports and Lesotho-made products are duty free in the US as it is a part of the AGOA arrangement. Lesotho also has abundance of crude materials like diamonds and wool and offers enormous opportunities for manufacturing of garments and electronics. Ms Bopane named Commercial Agriculture as one of the key growth areas that can be tapped by investors. Other key areas for investment included development of ICT for education and to utilise the potentialities offered by the 137 water springs that continue to export water to South Africa.

Technical Session II:- India-Africa Investment Flows.

This session was chaired by Dr Satinder Bhatia – Chairperson, International Projects Division, IIFT. She spoke on the importance of global value chains in international trade and therefore, on the importance of building value chains between India and Africa which further become a part of the global value chain. She gave several instances of value chains in Africa’s agricultural and mining products. She said that India can play a big role in increasing the value addition in both the upstream activities such as Research & Development and downstream activities including marketing and branding for Africa’s products.

The next presentation in the session was that of the Hon’ble Counsellor of Malawi in India - Mr. Alfred Vilili. He gave a presentation on the Investment opportunities in Malawi. He introduced Malawi as the “Switzerland of Africa”,and gave a brief description of the profile of the nation populated by 16 million people, most of whom are in the 15-40 working age group. He spoke about how Malawi had experienced significant growth and spoke about some economic indicators that vindicated his claims. He highlighted the key areas of growth which the government of Malawi was committed to achieve viz Agriculture and Food Security, Telecommunication and Pharmaceuticals. Mr. Vilili underscored the importance of strong Malawi-India trade and investment relations for the betterment of both the nations.

Dr. Sachin Kumar Sharma from the Centre for WTO Studies, IIFT made the next presentation that was centered around the commonalities of the impact of the Trade Facilitation Agreement on India and Africa. Dr Sachin Sharma elaborated on the rationale behind India’s opposition to the Trade Facilitation Agreement in WTO, which was on the condition that a concrete framework has to be devised for the agricultural subsidies. He stated that developed countries like USA spend around 110 billion US Dollars per annum as agricultural subsidies as compared to India which spends a meagre 30 billion US Dollars and African nations’ spending on the same is even lesser than that. In such a scenario, it becomes necessary for developing countries like India and countries in Africa which have a significant number of people dependent on agriculture to look after the interests of farmers and their subsistence. He reaffirmed that India’s role would be significant in services sector since the sector accounts for more than 50% of Africa’s GDP .

Technical Session III: India-Africa Trade in Services.

Mr. Manish Chand, CEO, India Writes Network was the Chair of the Session. Mr. Manish Chand also represents IndiAfrica, a unique people to people engagement initiative that aims to engage multiple stakeholders through contests, discussions, fellowships and exchanges. He spoke about how Africa is not only resource rich, but people rich as well and how it has transformed from representing 3Cs - Chaos,Complexity and Conflict to 3Rs - Resurgence, Renewal and Renaissance. He highlighted the UNCTAD report which said that services was the main driver of growth of 30 out of 54 African nations and contributed to more than 55% of the continent’s GDP. Mr. Manish highlighted the 3Ts of Indo-Africa partnership - Trade,Training and Technology and how areas such as tourism and telemedicine could be utilised by Indian firms for business in Africa.

The next presentation was by Mr Ananda Sengupta of ICICI Bank. He mentioned that ICICI bank has one of its branches in Johannesburg, South Africa and is aiming to expand its footprint across Africa. Mr Sengupta explained in detail the kind of operation that a bank performs between two trading entities and about the different trade financial instruments used to deliver products, ensure payments and mitigate trade related risks. He discussed about the financial and banking landscape in South Africa which holds the headquarters of The Standard Bank, the largest African bank by assets and earnings.

Dr.Suresh Kumar and Dr.Vibha Gupta – Centre for , Delhi University made a presentation on the crucial role that infrastructure would play in the emerging African countries. Infrastructure is a prerequisite for the development and expansion of trade activities be it ports, railways or communication. Chinese companies, backed by the state have aggressively taken steps towards building . India’s role in accelerating telecom sector in African countries is commendable but there is lot of scope in other fields like healthcare, tourism and education. He suggested India Africa Tourism Cell which can ameliorate the Indian footfall in African countries which at present is dismal because of the lack of advertisement and information.

Mr. Parag Toley – Deputy General Manager, Investor Relations at Bharti Airtel mentioned that Airtel operates in 17 countries in Africa and has a customer base of around 75 million. Mr. Parag took the audience through the opportunities and challenges that are relevant today for business investments in Africa. He emphasized the need for trained professionals in Africa like project planners, accountants and teachers. Apart from rich mineral resources, Africa has a phenomenal demographic dividend and an aspirational society that looks for more choices and integration with the global mainstream. But still, there are challenges pertaining to regulations, taxation, ease of business, governance and diversity. He was optimistic that the African economy would continue to grow at 5% per annum as predicted by economists.

The Conference ended with the Valedictory Address by Dr Satinder Bhatia summarizing the day’s proceedings.