India-Africa trade relation

Abstract

With more than 50% of India’s current population below 25, the working population is continuously increasing, with the demographic dividend projected to reach the maximum by 2040si . To prevent the demographic dividend from becoming a burden, India needs to provide employability to such a large population; and here, increasing global trade could be one of the possible solutions. In the current western political atmosphere with increasing protectionist policies on one side and a fast-emerging market in African continent on the other hand, India is presented with an opportunity to explore the African market and thus, develop India’s economy further. So, this study draws its motivation from exploring some of the below-mentioned trade sectors and how India can benefit from the trade relations, keeping in purview the risk and competitions involved in it. India is in a favorable position with the booming IT sector in the country. With increasing population and aspiration among the youth to be a part of the software industry, it will continuously grow in the field of IT. Hence, it can leverage the skills and available technologies to capitalize on the countries in Africa. Another area where India can provide to Africa is e-commerce. Indigenous e-commerce companies have already started testing their business models in African countries. However, competing countries like China, which is also developing in the sector, poses a threat to India’s expansion in IT. The competition for capturing external market is not just limited to IT but extends to sectors like healthcare, education and engineering as well. Closely tied to IT is the electronics sector and further, manufacturing sector, in which India is currently lagging. However, as the initiatives like ‘Skill India’ start rendering results, India will need markets for manufacturing products. Here, trade relations with Africa can have two-fold outcomes. First, it will open a huge market for the products developed in the country to be accessed. Second, the abundance of natural resources and minerals in the African continent will be helpful in further expanding the manufacturing sector.