India in Africa: Strategic Investments and the Global South's New Frontier

Introduction

“India took up the cause of championing the struggle against colonialism and racial discrimination and served as a rock of support upon which South Africa could rely until our own date with destiny”. This line was quoted by South African Ambassador Siyabonga Cwele. India-Africa relations indeed benefit from this idea of a shared past, as well as a shared future. Both sides often invoke the bonds created by their past resistance to colonialism and imperialism, both resist the idea of a bipolar world order and instead advocate for a multipolar system. On top of that, the political, economic and demographic challenges faced by India in the past decades resonate today in many African countries.

These historical, cultural and geopolitical bonds have aided an intensification of trade and economic cooperation between the two sides. India is now Africa’s third-largest trade partner and has also become Africa’s second-biggest creditor. PM Modi himself set out India’s approach to Africa when addressing the Ugandan parliament in 2018, during which he listed “10 Guiding Principles for India-Africa Engagement.” The 10 principles include open markets, open trade and a focus on the digital economy, helping Indian investors to step on African ground.

Scorecard of Indian Businessmen on the ground of Africa

Reliance Industries 

In May 2024, Reliance Industries, led by Mukesh Ambani, unveiled plans to enter Africa’s burgeoning telecommunications market through a partnership with Ghana-based Next-Gen InfraCo (NGIC). Radisys Corporation – a Reliance subsidiary – will supply critical network infrastructure, applications, and smartphones to support NGIC’s operations, which hopes to deliver 5G broadband services to mobile operators and internet service providers in Ghana.

Adani Group

In June 2024, Adani Ports and Special Economic Zone (APSEZ) acquired a container terminal in Dar es Salaam, as part of a joint venture with Abu Dhabi Ports under the East Africa Gateway initiative, establishing it as a key trade gateway for East Africa. In energy, Adani Energy Solutions finalized a $736m deal with Kenya Electricity Transmission Company (KETRACO) in October to construct 388km of high-voltage transmission lines, with Adani managing operations for 30 years.  In addition, Adani Airport Holdings proposed a $1.85bn investment to expand and operate Nairobi’s Jomo Kenyatta International Airport (JKIA) under a 30-year lease agreement. The project was temporarily paused in September due to legal challenges and public opposition.

Tata Group

Tata has been present in Africa since 1969, formalizing its presence in the continent by establishing Tata Zambia in 1977. In 1994, Tata Africa Holdings was set up as a subsidiary in South Africa. Today, Tata Africa Holdings has offices in Ghana, Kenya, Malawi, Mozambique, Nigeria, Senegal, South Africa, Tanzania, Uganda, Zambia and Zimbabwe, with business interests in sectors such as agriculture, hospitality and construction. Most recently, the company has made significant investments in battery-powered vehicles, aligning with the continent’s overall transition towards cleaner energy. The company also distribute Jaguar Land Rover vehicles in Africa, targeting the growing number of high-net-worth individuals in the region.

Aditya Birla

Aditya Birla’s UltraTech Cement has steadily expanded its presence in Africa with investments in Tanzania, Mozambique and Ethiopia. In textiles, the Group’s Grasim Industries has been sourcing raw materials, such as cotton, from African countries, supporting the local economies and contributing to global supply chains. Hindalco Industries, a subsidiary of the Aditya Birla Group, has also invested in bauxite mining and alumina refining in Guinea, which it hopes will support Hindalco’s overall aluminum production.

Bharti Enterprises

In 2010, Bharti Enterprises subsidiary, Bharti Airtel, bought Zain Africa’s operations in 15 countries for approximately $10.7bn (about $15.5bn today) creating Airtel Africa, marking one of the largest acquisitions by an Indian company in Africa at the time. In 2019, Airtel Africa was listed on the London and Nigerian stock exchanges, with a market capitalization of £3.1bn and N1.36trn, respectively, at the time of listing. As of November 8, 2024, the company’s market capitalization was around N8.11trn, with a share price of N2,156.90, making it one of the most valuable companies on the Nigerian exchange.

Mahindra & Mahindra

Mahindra & Mahindra first entered the African market in the early 2000s, focusing initially on the automotive and farm equipment businesses, and setting up vehicle assembly plants and distribution networks in countries including Nigeria, Kenya, South Africa and, most recently, Ethiopia, where it is looking to diversify into electric vehicle manufacturing.

Hand – in – Hand Geopolitics

India has been playing an important role in acting as a bridge between global north and global south, while maintaining ‘multi-alignment’ strategy. The strategy was seen working when India successfully included African Union (AU) in G20, in September 2023.  This process required months of canvassing through conferences like the Voice of Global South Summit (to which all global south countries that weren’t G20 members were invited), which India held at the start of its G20 presidency. Its objective was to ‘provide a common platform to discuss on the concerns, interests and priorities that affect the developing countries.’ India garnered huge credibility through these efforts because African leaders felt listened to and represented.

India recognized this sentiment and the have been putting effort in shifting global center of gravity towards the developing world (evidenced by the recent BRICS+ expansion). African countries have been impressed that India no longer allows the West to dictate its morality. Delhi sent an important message around strategic independence by controlling the narrative around the Ukraine war and pushing back against the ‘Western gaze’, which sought to impose Western priorities and values on the developing world. India is aware that Global South can not only provide abundant resources for the achievement of “Made in India” and the construction of “Digital India,” but can also provide a vast market for the export of Indian products, concepts, and standards. Thus, India is taking accelerated construction of digital infrastructure as an important means of promoting digital transformation at home and promoting digital standards and governance models in the Global South. Therefore, strengthening south-south cooperation.

Along with this, major strategy is to offset China's influence in global south. Speaking at a press conference at the G20 Leaders’ Summit in New Delhi, S. Jaishankar said that it is not the West that is supplying goods to Asia and Africa on a large scale, the traditional view of the West and the Global South as opposites should be overcome, the Global South should not be burdened with unpayable debts as a result of non-transparent initiatives, and connectivity initiatives should respect the sovereignty and territorial integrity of states. Shivshankar Menon, former Indian National Security Advisor and Foreign Secretary, said that “China has exacerbated the debt problems of developing countries,” and it was necessary for India to take the lead in addressing global challenges.

Way Forward

Recent geopolitical events have made Africa’s role in India’s energy security more prominent, with New Delhi focusing on diversifying energy supply sources. African countries including Nigeria, Angola, Algeria and Equatorial Guinea now account for a growing share of India’s oil imports. While Indian telecom companies can further establish themselves in Africa with a special focus on rural areas to enhance connectivity and communication, on the other hand, African countries can leapfrog by using India’s Digital Public Infrastructure (DPI) like Digi Locker for document storage, Co-WIN for vaccination, Jan Dhan Yojana, Shram portal for employees, focusing on people to people contact as India's diplomatic approach. India has also expressed its willingness to share DPI tools free of cost with Africa and support skill development.

India's journey of becoming a global power is closely tied to how strong its relationship with Africa becomes. India has smartly understood that many countries no longer fully trust the big global powers, and it is using this moment to build trust and grow its own influence and these successful investements and businesses, are proof of India's growing soft power in developing relations in geopolitics and diplomacy. There are clear signs that India and Africa are now connecting not just because of their shared history, but because they face similar challenges today. India often speaks up for the needs of developing countries on the world stage, which sets it apart. But it’s important that India backs up its words with real action as gaining long-term influence in Africa won’t be easy, especially with other powerful countries competing for the same space.