India’s trade with Africa has doubled in the past four years, from $24.98 billion in 2006–07 to $52.81 billion in 2010–11. This steady upward trajectory on the trade front is being complemented by stronger investment ties, with Indian investments in Africa totaling $1.52 billion in 2009–10. With the leadership on both sides committed to providing a business-friendly environment, bilateral ties are expected to continue growing in scope and significance.

On India’s side, economic growth is inexorably pushing the country to expand its footprint across Africa, including sourcing raw materials and energy to sustain industrial activities at home as well as securing new markets and consumers abroad for its expanding array of manufactured goods and value-added services. And on the African side, high commodity prices and robust external demand have provided more room for national governments to consolidate gains from improved macroeconomic management at home. This has enabled greater private capital flows, faster debt relief, and allocating greater resources to enhancing non-fuel exports.

The continent has also witnessed a decline in political conflicts, especially in West and Central Africa. These political and economic developments have substantially improved business opportunities for the international community and, consequently, both trade and investment in Africa indicate a growing trend.

Africa today represents one of the largest untapped potential for investment as it is one of the richest natural resource regions in the world. Further, Africa has a middle class that is larger than India’s, estimated at 350–500 million, with a rising per capita income and greater propensity to trade and to invest. The continent is today the third-fastest growing economic region in the world and its rate of urbanization is higher than India’s.
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