India-Africa Trade and Investment Cooperation for Economic Development

India-Africa Trade and Investment Cooperation for Economic Development

Rajender Singh Godara (Lovely Professional University, India), Mohamad Aslam (Lovely Professional University, India), Gaibul Preet (Lovely Professional University, India) and Sushanta Kumar Mahapatra (IBS Hyderabad, The ICFAI Foundation for Higher Education, India)
DOI: 10.4018/978-1-7998-1730-7.ch005

Abstract

India and Africa have a long partnership history of cooperation for economic development by trade and investment. This framework has become an essential component for development in Africa. Africa is an emerging investment and trade destination due to a large consumer market, high potential of economic growth, improving the business environment and investment regulations, and high rates of return on investment. The depth of relation of India and Africa has been reflected in the patterns of trade and investment, as well as people-to-people interactions, cultural exchanges, and cooperation at the continental and at the regional and bilateral levels. This chapter examines investment and trade patterns of India-Africa collaboration in the contemporary era of globalization. The study is based on empirical and conceptual aspects by using secondary data. An analysis uses appropriate econometric tools to make the study more relevant.
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Background

India and Africa have a long partnership history of cooperation between each other in the spheres of economic development, trade, and investment. This cooperation has become an essential component for the development of Africa. However, a fresh search of cooperation opportunities in this region is now needed. In this chapter, an attempt has been made to examine and analyze India-Africa trade patterns and evaluate the potential for cooperation among both regions in the present era of globalization. The depth of the relations has been reflected in the patterns of trade and investment, as well as people-to-people interactions, cultural exchanges, and cooperation at the continental, regional, and bilateral levels. In recent years, there is a strong trade and investment relations between India and Africa. These relations are promoting socio-political and commercial issues, capacity building, development cooperation, and economic and technological initiatives for India and Africa (Prabhakar, 2005).

Both Africa and India have performing very well with full dedication to build up the relationship for trade and development. Through this partnership the trade between India and Africa has increased ten-times, it was $7.2 billion in 2001 to rise up to $78.0 billion in 2014, but it was declines to $59.9 billion in 2017 due to declines in the commodity and oil price decline overall the developing economy in the world (African Export-Import Bank & Export-Import Bank of India, 2018).

Key Terms in this Chapter

Free Trade Agreement: A pact between two or more nations to reduce barriers to imports and exports among them.

Economic Integration: A process of regional integration that often occurs among neighboring nations. Itincludes seven stages: a preferential trading area, a free trade area, a customs union, a common market, an economic union, an economic and monetary union, and complete economic integration.

Regional Trade Agreement: A treaty that is signed by two or more countries to encourage free movement of goods and services across the borders of its members.

Developing Country: A country that has low levels of industrialization and fares poorly on the Human Development Index (HDI). A low HDI score means that the citizens of a particular country have lower life expectancy, lower educational attainment, lower per capita incomes, and higher fertility rates than found in other countries.

South-South Cooperation: A term used to describe the technical cooperation, exchange of resources, supporting local capabilities, institutes, expertise, and human capital, in contribution of national development policies, of the Global South.

Investment: an asset or item that is purchased with the hope that it will generate income or appreciate in the future; an act of putting money to work to start or expand a business or project or the purchase of an asset, with the goal of earning income or capital appreciation.

Development Cooperation: A type of cooperation that has three major tasks: supporting and complementing efforts of developing countries to guarantee the provision of universal social basic standards to their citizens, as a means for people to exercise their basic human rights; promoting the convergence of the developing (and particularly the poorest) countries to higher levels of income and wellbeing, correcting extreme international inequalities; supporting efforts of developing countries to participate actively in the provision of international public goods.

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