On China's heels, India vies for its old edge in Africa

The most problematic area of competition with China is for oil. India imports 70 percent of its oil, and is heavily dependent on Nigeria. In a move that has escaped much international scrutiny, the government-owned Oil and Natural Gas Corp. Videsh Limited has invested $720 million in Sudan to secure a share of oil fields, and plans to spend $200 million on a 741 kilometre (460-mile pipeline. India has offered $500 million in credit to countries around the Gulf of Guinea – the source of 70 percent of India's African oil production.

Political favors

In its courtship of Africa, India is also trying to build support for its effort to gain a permanent seat on the United National Security Council – something that Africa wants as well.

Some say the Indian government needs to be more proactive as a bridge between African governments and Indian businesses, pushing Indian businesses as solutions to development challenges throughout Africa. "The embassies should learn more about the ventures going on in their area," suggests Sachin Bajla, founder and CEO of Taurian Resources, a Mumbai-based mining operation. "Look at what are the needs of a foreign government and what Indian company can fulfill that need."

While China and other foreign mining companies generally export raw minerals from Africa, Zambia wants India to start manufacturing raw materials here. The Indian government is also financing an "e-network" project to enhance Internet connectivity in Africa.

In Zambia, China's ties are historically strong, dating back to the construction of the railroad linking Tanzania and Zambia, and the Zambian government is close to Beijing. But Chinese business people are often accused of being insular and sometimes exploitative.

India's long history with Africa

Given its status in many quarters as leader of the postcolonial world and in the anti-apartheid struggle, its English-language heritage, and its historical trading ties across the Arabian Sea, India has ties that are broader and deeper – a point stressed by Indian officials.

India was a key player in South Africa's anti-apartheid struggle, and Indian traders and small-business owners have long been ubiquitous in the region.

The Indian vehicle firm Tata launched its African operations in 1977 from Zambia, where Tata trucks and buses still dot the roads.

"There is a deeper infiltration into the macroeconomic fabric of the continent," notes the World Bank's Broadman. "The Chinese operate as enclaves on the African continent."

But Indians and Africans of Indian descent are not immune to xenophobia and charges of exploitation.

Before the Zambia's 2006 presidential elections, opposition leader Michael Sata lashed out at alleged exploitation by Chinese investors – but also threatened to expel Indian and Lebanese investors.

Indeed, Mr. Seshamani argues that while China likes to gamble, Indians often worry about the potential for another backlash like the mass expulsion from Uganda in 1972.

As India tries to change the dynamic in Africa, it needs to focus on its private entrepreneurs and stress that it is not out to pillage the continent, says Rajan Kohli, deputy secretary general of the Federation of Indian Chambers of Commerce and Industry in New Delhi.

"If you try to follow China, you will not succeed. They have more resources to give, and [as a democracy] our decision-making is very slow," he said. "We have to play to our strengths."

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