Sunday, December 17, 2017

EDITOR'S SPACE

The African Chessboard

 

A century from now some chronicler of the movements of India’s construction sector cowboys could well liken them to Spanish conquistadors. Having bravely weathered the economic slowdown at home over the last few years India’s domestic players are increasingly sporting a frontier look these days pushing themselves further on a global platform.

 

These firms are finding themselves increasingly drawn towards overseas markets, notably in the former Dark Continent – Africa.  Admittedly if these firms are punching above their weight to carve themselves space in Africa it is owing to both need and greed. 

 

For India Inc to become an economic superpower there is an enormous need to secure long term raw material sources.

 

No one exemplifies India’s aggro and appetite for energy more than Jindal Steel & Power Ltd’s chairman Naveen Jindal whose company has authoritatively stamped its presence in South Africa, Madagascar, Mozambique, Tanzania and Zambia through mining acquisitions.

 

With resources at home fast dwindling such is the hunger to find long term solutions to bridge the deficit, that Indian companies like the Tata Group, L&T, Punj Lloyd, Tata Steel, Essar Projects, Kirloskar Bros – not to forget telecom major Airtel or pharmaceutical giant Cipla and a host of small and medium rung establishments – are increasingly looking to expand their operations in the countries of Africa, so far a largely untapped business geography. 

 

This is a zone that is rich in commodities but poor in infrastructure. Now with a large aspirational middle class emerging out of a billion plus Africa, India Inc is seeing opportunity to not just be part of the continent’s development mainstream but to establish themselves profitably for the long term. Such is the African allure that Indian billionaires are reportedly investing
$15 billion every year in a bid to tap potential demand.

 

Among the people who have lined up greenfield investments are the Tatas, Vedanta chief Anil Agarwal, Adi Godrej and JSPL’s Naveen Jindal. Even trade with the African continent has improved over the years.

 

Ergo, there is a new found urgency as India scrambles to acquire space on the African business chessboard. The Indian elephant though finds itself pitted against the Chinese dragon, a fairly recent arrival, which has already firmly entrenched itself in the continent's development space.  India’s investment in Africa, which derives much from its historical relationship, is more of a private nature as opposed to the efforts of the Chinese, seen as an overwhelmingly collective national effort.  As a result of this the comparative report card weighs heavily against India.

 

What must India do to face the challenge? Our cover story in this issue addresses India Inc’s opportunities and prospects as it meets its neighbour in the battle for business in the former Dark Continent. 

 

We believe there is great potential for the country’s companies to bring brightness to Africa’s infrastructure deficit zones, the dragon notwithstanding.  

 

Have an enjoyable read! 

 




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