India VS China: battlefield Africa

(Image source: Dainik Bhaskar)

India and China are at war again. But unlike 1962 the battle is far away from our borders. To be precise the battle is not even on the Asian continent. It is in Africa.

Since the 1980’s Africa has been a source of interest to both nations from a business perspective. The Chinese have traditionally looked at Africa as a source of raw materials for their manufacturing Industries. Also many Chinese entrepreneurs have set shop in Africa and some have been there for centuries.

India did see a lot of movement to Africa during the British raj and soon many counties in East Africa had Indian businesses. The others areas that attracted Indians included South Africa and North Africa. But the 1960’s changed all of that. When Idi Amin expelled the Indians from Uganda the separation was complete. But since then the tide has turned again and many Indian companies have now acquired entities in Africa. The prominent ones include Bharti, Marico and Godrej.

(Image source: chillis blog)

Many Indian companies also look at Africa as a source of their products. For example Bajaj Auto has been selling commercial vehicles in East and Central Africa. In Kenya many refer to the commercial vehicles as ‘Bajaiji’. Similarly Tata Motors has been selling commercial trucks. Cipla is selling HIV drugs and Vedanta has bought copper mines in Zambia. India is also helping countries like Ethiopia to build its infrastructure.

(Image Source: rnl.com)

China on the other hand has used its state run enterprises with the backing of the government. So most Chinese firms would build social infrastructure as schools, hospitals and community centers in order to build relations with the African governments. Though this strategy has worked mostly, it has backfired recently in Libya where China was seen as a close ally of the Gaddafi regime.

So clearly the battle lines are drawn Indian private sector vs the Chinese state enterprises. But what of our own PSU’s? Some like ONGC have been heavily investing in Africa to help jointly explore oil with African nations. Others like BHEL have been helping nations build power plants. MMTC and STC have trade agreements with many African nations. But there has been no structured approach to garner this market for the Indian firms.
Like the Indian economy the growth in Africa is privately led and not led by the government. I am sure the progress would be slow but definite. Unlike China, India has no hidden agenda’s for Africa. I am sure the Indian forms are there only to do business, but with the Chinese one can never be sure.

Two interesting channels that Indian firms can use are Cricket- the second edition of the IPL was held in South Africa and some African countries actually do play cricket the prominent ones among them are Zimbabwe, Kenya and Namibia.

The second channel could be Bollywood or the Indian film Industry, which is very popular in Africa and many local film industries do tend to get inspired by the Indian movies.

Africa needs investments in its economy and Indian firms would do well to guide their African partners. I see a great potential for the IT and ITes Industry in Africa. Many Indian firms might want to set up training in Africa to leverage the educated masses in Africa and to serve the global markets better.

India vs China the battle lines are drawn and who will ultimately triumph would depend on the strategy followed by both parties. Like Sun Tzu say’s in ‘The Art of War’ all warfare is based on deception. Only time will life the fog of war, to reveal the true intentions and outcomes for both nations.