The 21st century has seen the African continent gain significant salience in Indian foreign policy. Elements of pragmatism have been mixed into the earlier idealistic policy and the factors such as energy, uranium, and other resources are driving India’s interest in ties with Africa.
The significance of ties between India and Africa has been gaining greater strategic prominence due to India’s interest in the energy sector in the region. Although West Asia has been India’s primary source of energy, the growing Indian demand for energy resources cannot be secured without diversification and Africa, with approximately 9% of the world’s proven oil and gas deposits. Energy security is a national imperative for India, and a strong partnership with Africa must be viewed as essential to securing India’s energy needs. Indian public and private sector companies have made inroads into mainly francophone Africa in the petroleum and natural gas sector, with Nigeria being India’s primary source of oil and gas in Africa. Algeria, Angola, and Sudan are also significant partners in the energy sector.
In 2010, Africa accounted for 20.6% of India’s total crude oil imports. ONGC Videsh has been the most active public sector company in Africa. The company has in total five exploration projects in Africa, one in Libya, two in Nigeria, one in Egypt, and one in a Joint Development Zone (JDZ), an area of overlapping maritime boundary claims between Nigeria and Sao Tome located in the Gulf of Guinea, but settled in 2001 by a treaty, and two producing projects in Sudan. The main countries that the company is interested and where there is discovery of oil are Angola, Nigeria, Equatorial Guinea, Ghana, Sierra Leone. The other public sector companies in Africa are Oil India Limited, Bharat Petroleum, and Hindustan Petroleum. These companies have foothold in Libya, Egypt, Nigeria, and Mozambique. Bharat Petro Resources also announced a major natural gas discovery in offshore Mozambique in 2010. Indian Oil Corporation acquired an offshore block in Côte d’Ivoire, while in January 2010 ONGC signed a memorandum of understanding with Sonangol, Angola’s state oil company, signifying a big step forward in India’s efforts to enter the Angolan market, hitherto dominated by Western and Chinese companies. Other Indian oil companies have bought stakes in oil and gas blocks in Burkina Faso, Guinea-Bissau, and Senegal.
The Indian Private Sector has also been looking to move into the oil and gas sector in Africa. Reliance Industries bought a majority stake in Gulf Africa Petroleum Corporation (GAPCO) in 2007. Another private sector company, Essar Energy Overseas Limited has a 50% stake in the Kenya Petroleum Refineries Limited since 2009. Both RIL and Essar have been bidding to acquire assets of British Petroleum in Zambia, Malawi, Botswana, Namibia, and Tanzania.
Nuclear and Uranium
Nuclear energy is expected to meet 25% of India’s energy demand by 2050, and uranium imports are especially important to securing India’s energy needs. The Indo-US nuclear deal has legally opened the option of nuclear trade with African nations. India has signed a string of nuclear deals with African countries in the last few years. Under the agreement, Namibia will supply uranium oxide to India, along with copper and diamonds. Uranium trade is an important component of India’s civil nuclear programme, with the first phase focussing on India’s pressurised heavy water reactors fuelled by uranium. Currently, Africa’s civil nuclear industry is extremely underdeveloped and India’s expertise has been welcomed by African nations such as Namibia, Niger, Malawi, South Africa, Madagascar, Tanzania, and Gabon. India’s entry point into Africa has been through the 2009 Agreement on Civil Nuclear Cooperation with Namibia, allowing for trade and nuclear infrastructural development. The National Aluminium Ltd. is currently undertaking exploration projects with the intension of acquiring stakes in new uranium deposits particularly in Namibia. Currently, Namibia, Malawi, South Africa, Niger, and Madagascar are the top five exporters of uranium to India, and among them only South Africa has the membership in NSG. In the uranium sector, also, Indian private players have entered into the market. Taurian Resources Private Limited and Earthstone FZE are currently operating in Niger and Varun Energy Corporation has been operating in Madagascar.
India has taken steps in helping Indian companies, both private and public, to invest abroad for natural resources, particularly in oil, gas, uranium, and coal. New Delhi has faced a number of setbacks from government supported Chinese companies, particularly losing out to China in at least $12.5 billion of contracts in the past years in oil exploration bids in Africa. This poses a significant geopolitical as well as geo-economic challenge to India’s long term strategic interests in engaging Africa. China has politically pursued a more proactive policy in Africa.
China’s economic hard power capabilities have successfully blocked Indian investment in Africa’s primary sector, especially in critical countries such as Angola, Algeria, Zambia, Sudan etc. India’s bilateral trade and investment with Africa also pale in comparison to those of China. And the nature of the Chinese economy far greater than India’s makes competing in Africa an extremely difficult task and presence of high-profile Chinese ventures on the continent further challenges India’s cultivation of strategic ties with Africa: a situation which could eventually impact on India’s energy security, given its dependency on African resources.
However, India holds greater soft power potential owing to the ideological unity of emerging democracies. There is a more evenly-balanced power status in India’s relations with Africa compare with China’s hard power, and many African countries have doubts about China’s real intentions in the continent. And in the long run, for India and China to prosper and expand their influence, coexistence and cooperation seem to be the most viable option; narrow, focused, and complementary target areas should be identified to facilitate this.