Farm R&D, building and modernising agri infra, processing and value addition are areas where India can contribute
The world recognises Africa’s immense potential in terms of its enormous natural resource endowments (energy, minerals and agriculture) and large population. . India has enjoyed strong relationship with many of the nations in Africa (there are now 54 countries) for centuries.
Africa-India trade is currently valued at about $90 billion, but the potential for growth is huge. In particular, trade in agricultural commodities has been on a strong footing for years. Indian entrepreneurs have made investments in some of the African countries, helping create jobs and incomes there. Yet, considering the potential for growth, the business opportunities are rather under-explored.
There are several common features and challenges Africa and India face. Ensuring food and nutrition security to their large populations is the primary issue. Global warming and climate change are proving to be a formidable challenge for both. There is enormous scope for collaboration in building resilience against climate change.
There are many common issues as far as agriculture is concerned, and these include smallholder cultivation, low level of input usage, low productivity, inadequate mechanisation and inefficient supply chain. Agricultural infrastructure too needs rapid modernisation and investment so as to build supply chain efficiency.
Talking specifically of agri-business, India has a strong bilateral trade in agricultural commodities with many of the African countries. The major commodities India exports to Africa include rice, sugar, meat, dairy products, confectionery and beverages. From Africa, India imports pulses, oilseeds, spices, coffee, cotton and raw cashew. India enjoys strong trade ties with Tanzania, Mozambique, Malawi, Uganda, Kenya, Ethiopia, Nigeria and Ivory Coast among others.
To meet the domestic shortfall in pulses, India has signed a Memorandum of Understanding with Mozambique and Malawi for import of pigeon pea (tur/arhar). Interestingly, import from many of the African origins is allowed duty-free in India given their Least Developed Country (LDC) status. This helps promote trade and support Africa’s smallholders.
In a major development last year, India signed rupee payment agreements with as many as 18 countries around the world. Tanzania, Uganda, Kenya and Botswana figure in the list. As a result, invoicing and payment will be in rupees. The RBI issued a circular to that effect on July 11, 2022.
India has its own strengths in the agriculture sector and has made noteworthy progress in recent decades. Our farm R&D is arguably among the best in the world. Indian scientists’ domain expertise and skills can be utilised to strengthen African agriculture and related activities like livestock and fisheries.
Joint research in agricultural inputs — seeds, agrochemicals, fertiliser and water — to build higher levels of efficiency in input delivery and input utilisation is the need of the hour. Digitisation will help.
While two-way trade in agricultural commodities will continue, Africa and India can set up joint working groups to examine investment opportunities in processing and value addition. Investment in building agri-infrastructure — storage, logistics, electronic markets — is an area that provides opportunities.
Closer engagement between Africa and India will deliver benefits for stakeholders on both sides — growers, processors, consumers, traders and service providers.
Excerpts of keynote speech delivered by the author during the recently concluded Africa-India Agribusiness Summit in Dar es Salaam, Tanzania
Source The Hindu Business Line