In a bid to compensate for India’s declining exports in economies of scale since demand contracting with them due to slowdown, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has brought out “Africa Manual 2009-12”, forecasting Indo-African two way trade grow over 9 times by 2012.
The ASSOCHAM `Africa Manual’ projects that in next four years, Focus Africa will have so much acceptability as to accelerate Indo-African two-way trade to levels of over US$ 150 billion. Their two-way trade stays at about US$ 26 billion for now, says the Secretary General ASSOCHAM, D S Rawat.
According to it, from 2002-03 to 2007-08, bilateral trade of Indo and Africa grew over five times from US$ 5.2 billion to US$ 26 billion and since markets on economies of scale have been contracted due to slowdown in their economy, African continent, comprising 54 nations, 12 of them in Arab League will emerge as the most sought after destinations for business opportunities for Indian Inc. African industries will equally tap Indian market for their products as India provides for them easy access with preferential import tariffs.
The reason as to why the African continent will bear huge fruits for Indian Inc. is because its population has been growing at about 5% and therefore provides for huge market in which India’s products and investments both are accepted because of cost factor.
It is in view of this that the ASSOCHAM has projected that the trade which registered five fold increase between 2002-03 to 2007-08, its pace will double as Africa now has been announced as the Focus Market by Government of India.
The governments in African continent have also been encouraging industries to intensify their ties with India because it has already announced Duty Free Tariff Preference Scheme for all LCDs (Least Developed Countries) including Africa so that imports from them become easier and increase by mani-fold, said Rawat.
According to Rawat, the areas which will receive maximum focus in the next 4-5 years for increased trade include minerals, fuels, gems and jewellery, inorganic chemicals, ores and wood, besides project exports, consultancy, IT, education and healthcare.
India’s defence support to entire African continent will further accelerate and the traditional areas in which India and Africa have already made a mark will receive further boost up which include textiles, chemicals, engineering etc.
Rawat further pointed out that from government side, Comprehensive Economic Agreement and many other Free Trade Agreements are being facilitated between India and South Africa including that of Preferential Trade Agreement. These measures aim at boosting trade as political and economic ties between the two continents are increasingly getting cemented, reflextions of which naturally fall on closer economic and business linkages.
According to the Paper, India and Egypt are presently examining possibilities of concluding a bilateral Preferential Trade Agreement. Two rounds of talks have been held so far. The next round of discussion is expected to be held shortly in Cairo. Similarly, India and SACU (Southern African Customs Union) consisting of South Africa, Namibia, Bostwana, Lesotho and Swaziland are in process of negotiating FTA.
Two rounds of talks have been held and a Framework Agreement is proposed to be signed in future. All these initiatives will further be codified for other regions in Africa through joint initiatives so that the countries in the region come closer with India and increase their trade relations.
Trade economic relations, trade missions as also trade promotion measures are being mounted between the two continents in which participation in specialized and commodity specific fairs and exhibitions in two regions are being sought to ensure closer linkages and interactions for developing understanding for business prospects. Ministry of Commerce and Industry, Govt. of India would also take many more initiatives for creation of flexible trade regime to attract businesses for closer economic linkages.
Source: ASSOCHAM
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