Bank of India’s creation of a branch in Johannesburg shows that growing trade and investment between India and Africa remains a lucrative potential source of revenue for global banks

The Bank of India has established a branch in Johannesburg as it positions itself to take a piece of the growing trade links between India and Africa. The bank, which already has a representative presence in South Africa, as well as locations in East Africa, plans further expansions in the region, according to reports in the Indian press.

The move is indicative of an increased awareness by Indian corporates of the potential of African markets for their goods and services. “Speed-dating” events, matching Indian businesses with local partners are a frequent occurence in hotels around the continent, often under the auspices of the Federation of Indian Chambers of Commerce and Industry, or the Confederation of Indian Industry, the large trade associations which have become so important in the country’s engagement with African economies. “These are the drivers of India’s Africa strategy. It’s very much a commercial process linked to trade, investment, loans by the Indian Eximbank, setting up of what they call significant actors at a regional level,” Sanusha Naidoo, research director at the South African Foreign Policy Institute, said in an interview.

Earlier this year, Indian business, backed by government, held a conclave in Ethiopia. These meetings, unlike
other summits organised between BRIC countries and Africa, focused far less on intergovernmental relations and far more on bringing together investors and projects.

“What is interesting is that it is a platform that does not distinguish between private sector and public sector. So it will bring in governments, it will host African governments and invite them to share the platform with the private sector, but from the Indian side, it’s very much driven by the private sector,” Naidoo said.

“You’re looking at big companies like Tata, Mahindra, Bharti, Reliance Industries, Colusco Pumps. And of course power generation companies as well, and oil and gas. In the oil and gas sector you have an interesting mix of private and public sector actors.”


The government, too, has worked to promote this mercantilist, private sector-led approach, helping to broker deals between investors and governments, particularly in friendly countries, such as Ethiopia, where India is the largest investor.

In many cases, Indian businesses have a lot to offer African countries, and vice versa. India’s development, in particular in the agricultural sector, came from a similar base of demographic opportunity and economic hardships as many places on the continent are now experiencing. The market structures that are there to be tapped in Africa are not dissimilar to the conditions at the birth of many Indian enterprises.

Entrepreneurs who grew up or began their businesses in post-Green Revolution India have had the opportunity to commercialise the innovations in Indian agriculture that saw India emerge from near-starvation to become first self-sufficient, and then a net exporter of food. In the main, this was down to a combination of subsidies and market policies, irrigation and the dissemination of new seed types to the mass of smallholder farmers that made up – and still make up – a large swathe of Indian society. These farmers complement a growing commercial scale sector, but have not yet been replaced by it.

Alongside this revolution grew new players that were experts in small-scale irrigation systems, seed production and distribution and in farm machinery specially adapted to a developing world context. The Indian seed industry has created businesses, such as Vibha Seeds, based in Andhra Pradesh, which rival Monsanto and Syngenta on the domestic stage, and which are actively seeking to take market share in African markets. In a similar vein, Indian construction companies and power generation businesses, who have built and continue to build the infrastructure driving the Indian domestic economy, need to find alternative sources of revenue as they grow. With experience in the emerging market context that they were born in, they are often quite quick to adapt to African markets.

It is this kind of business that Bank of India will hope to intermediate in, as well as to provide services for entrepreneurs in the Diaspora.

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