India has set its eyes on Africa as a motor of economic growth back home. According to a new report, Indian companies aspire to quadruple revenues from Africa to $160 billion by 2025 by concentrating and furthering their presence in IT services, agriculture, infrastructure, pharmaceuticals and consumer goods — sectors in which India has an upper hand on the production side and African nations have high demand for.
Bilateral trade between India and Africa has seen a significant increase over the past decade-plus. In 2000 it was around $3 billion; it reached $70 billion in 2012-13. The Indian government aspires to reach the $200-billion mark before 2020. Speaking at the India-Africa Project Partnership organized by the Confederation of Indian Industry (CII) and India’s Exim Bank, Noel Tata, chairman of CII’s Africa Committee, said: “We believe India’s strengths and experience of operating in similar capital constrained conditions will be of great value to Africa. Africa needs constructive foreign investment and holds the promise of long-term business for India.” Currently, Indian investments account for 6.5% of total foreign direct investment (FDI) inflows into Africa and India-Africa bilateral trade accounts for 6% of Africa’s total trade.
The report also includes a ten-point strategic plan for Indian startups who wants to break into the African market (view a Slideshare presentation here). Top of the list? Getting in early, building a granular understanding of the market as regards local consumer behaviors, and iterate, iterate, iterate.
The report concludes that “India can aspire to capture almost 7% of the IT services market, 5% of the FMCG [fast-moving consumer goods] space, 10% of the power sector, and 2 to 5 % of the agri-allied services.” The tricky part for India will be avoiding blowback (like that China faces) as it captures those segments.