RPT-PREVIEW-India PM eyes trade, China catch-up in Africa

Tue May 24, 2011 2:18am GMT
 

(Repeats story issued late on Monday)

* Six-day visit to Ethiopia, Tanzania begins Monday

* India lags Chinese influence in resource-rich continent

* India also looking for African diplomatic support (Adds AU comment, background, pvs NEW DELHI)

By Aaron Maasho

ADDIS ABABA, May 23 (Reuters) - Indian Prime Minister began a six-day trip to Africa on Monday, aiming to strike deeper economic ties with a continent rich in minerals and commodities, but where Asia's third-largest economy lags rival China.

Manmohan Singh will travel to Ethiopia and Tanzania for only the fourth African visit of his eight-year premiership, pledging development support in exchange for trade agreements to fuel growth in India's resource-intensive economy.

He arrived in the Ethiopian capital Addis Ababa on Monday and will visit Tanzania on Thursday.

At an address to an India-Africa summit in Addis Ababa starting on Tuesday, Singh will trumpet India's historical and cultural links with the continent to representatives of 15 African Union members in an attempt to emerge from Beijing's shadow.

"The India-Africa partnership rests on three pillars of capacity building and skill transfer, trade and infrastructure development," Singh said in a departure statement.

"Africa is emerging as a new growth pole of the world, while India is on a path of sustained and rapid economic development."

Rival emerging economies India and China are scouring the globe to secure energy resources, minerals and food. Both are keen to stress to African nations that they are more than just trade partners and want to help the continent develop.

Singh is expected to announce new lines of credit to African nations totalling around $600 million, and unveil plans to open regional centres of excellence and vocational training centres in countries such as Uganda, Ghana, Botswana and Mozambique.

"This cooperation will continue to provide dividends that would impact on key sectors of our economies in areas such as infrastructure, scientific research, innovation and technology, as well as medicine and pharmaceuticals," said John Kayode Shinkaiye, the African Union Commission's chief of staff.

HEAD START

Both nations are also trying to extend their influence in Africa as they emerge as economic powers and appear keener to flex their diplomatic muscle.

China is around a decade ahead of India in getting into Africa. Beijing's investments in Ghana, for example, topped the all Indian investment in the continent in 2006. [ID:nLDE69P0VF]

Standard Bank (SBKJ.J: Quote), Africa's largest lender, is 20-percent owned by the Industrial and Commercial Bank of China (601398.SS: Quote) 0349.HK. Chinese companies are busy building roads across the continent, investing in the energy sector and are active in areas such as telecoms technology. [ID:nLDE7191TY]

India is trying to secure a greater presence as well as get African support for its bid for a permanent place on the U.N. Security Council, as the body is reformed to include emerging powers and developing nations.

"India is massively playing catch-up to China in Africa, and only in recent years is it trying to engage the continent in a serious way," said Brahma Chellaney, professor at the New Delhi-based Centre for Policy Research.

"But they are trying to build political and economic ties, and position itself as different to China, which has acquired the image of being a new imperial power."

Total bilateral trade between India and African countries stood at $46 billion last year, a huge increase on $3 billion in 2000-1. Volumes are estimated to reach $70 billion by 2015, India's Trade Minister Anand Sharma said on Saturday.

China's bilateral trade with Africa already stood at $107 billion back in 2008.

India is one of the largest investors in Ethiopia with approved investment of $4.78 billion, of which about $1 billion is already on the ground or in the pipeline -- with two-thirds of the investment in commercial agriculture.

India's state-run oil firms are beginning to invest in countries including Nigeria and Kenya, while China has pumped billions of dollars into Sudanese oil, mineral-rich Zimbabwe, and Zambia's mining sector, among other countries.

India imports 70 percent of its crude needs, and energy demand is expected to more than double by 2030, according to the International Energy Agency.

India's fledging investments are headed by telecoms firm Bharti Airtel's (BRTI.BO: Quote) $9 billion acquisition of Zain's (ZAIN.KW: Quote) African assets last year. (Additional reporting by Henry Foy in New Delhi; Editing by Jon Hemming)

 
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