Do India’s activities in Africa liberate and strengthen Africa’s position in the Euro-African relation?

Ton Schrijen,Bartjan Pennink

doi:10.14738/abr.53.2859

Abstract

Abstract This research will analyze the economic relationship between India and Africa by analyzing trade, investments, aid and trade agreements. Moreover, this study will investigate whether there is substitution effect for the economic relationship between Europe and Africa and compare the results to China. The engagements of India appear to be stronger in resource rich countries and prove no substitution effect for the relationship of Europe and Africa. Moreover, India is also behind China in terms of trade. However, while India’s engagement might be smaller than China’s and Europe’s engagement, it might be more beneficial to Africa as the exports provide Africa with a trade surplus, whereas China and Europe do not. Therefore, the trade between India and Africa is a positive development for Africa, especially as Africa manages to reinvest this surplus into the development of its own economy.

Highlights

Over the last decades India has experienced a spectacular economic growth, comparable with the large industrializations as the United Kingdom and United States (Winters & Yusuf 2007)
This paper follows upon the study by Keers and Pennink (2010) on the effects of the Sino-African relation. It investigates whether Indian- African endeavors might negatively affect the European-African relation, and whether Indian trade, investments and development aid will become a preferred substitute for European engagements
The aim of this study was to analyze whether the growing economic relationship between India and Africa was a substitute for the traditional relationship between Europe and Africa

Summary

INTRODUCTION

Over the last decades India has experienced a spectacular economic growth, comparable with the large industrializations as the United Kingdom and United States (Winters & Yusuf 2007). This article will analyze the economic relationship of India and Europe with Africa, and look at trade, investment, aid and trade agreements. This study adds trade agreements to the conceptual model of Keers & Pennink (2010) and will analyze the implications of doing so. Indo-Africa & European-Africa economic relation in existing literature India has been trading with Africa for over one hundred years, and over time it has developed a strong relationship with Africa (Nanji & Radeva 2009). The economic growth of India over the years, with rates of 8-9% amplified its role in the global economy (Economist 2007)

This article is based on the master thesis of Ton Schrijen

LIMITATIONS

Libya 2 Algeria

Findings

CONCLUSIONS