9 th CII-EXIM Bank Conclave on India-Africa Project Partnership 19 March 2013, New Delhi

1. 9th CII-EXIM Bank Conclave on India-Africa Project Partnership19 March 2013, New Delhi Shishir Priyadarshi Director of the WTO Development Division

2. Why Aid for Trade? • Trade is a powerful development tool • Many developing countries, particularly LDCs, lack the capacity to compete effectively in expanding regional and global markets • The Aid for Trade Initiative, launched in 2005 at the Hong Kong WTO Ministerial Conference, aims to make aid help trade • The Initiative has established a comprehensive framework for tackling these trade-related bottlenecks

3. Aid for Trade: How is it achieved? • Aid for trade flows have grown from the baseline average of 2002-05 • Partners mainstream and prioritise trade in development strategies • Donors respond through Aid for Trade projects and programmes • This can be measured in four main thrust areas: Trade policy & regulation; Building productive capacity; Economic infrastructure; and Trade-related adjustment

4. Flows mainly go towards productive capacity and economic infrastructure

5. Africa and Asia, home to 97 per cent of world poor, also receive the largest share of Aid for Trade flows

6. The Global Review of Aid for Trade • The WTO, along with partners, assess the effectiveness of Aid for Trade through a monitoring framework that culminates into the biennial Global Review on Aid for Trade • Since inception in 2007, the Global Review of Aid for Trade has established itself as the preeminent multilateral forum exploring trade and development issues. • Past Global Reviews have examined how developing, and in particular LDCs, are seeking to integrate into the global economy, how development partners are supporting this process and the efficacy of this assistance

7. The 4th WTO Global Review of Aid for Trade • The 4th Global Review on Aid for Trade to be held at the WTO on 5-7 July this year takes its theme: “Connecting to Value Chains” • But why ‘Value Chains’? • Global trade is increasingly characterized by transactions within complex value chains, or nodes of activities that adds value to a final product or service, offering new opportunities for many developing countries • Value chains are not only among north-south firms, but increasingly characterised by complex regional and south-south trade • The aim of the 4th Global Review of Aid for Trade is to examine strategies to connect developing country and LDC firms to value chains

8. Therefore, the focus of 4th Global Review is on the private sector in developing countries and LDCs In the context of South-South partnerships, India-Africa trade and investment ties have grown phenomenally This private sector-led development has been encouraging for African private sector to enter the international value chains

9. India-Africa trade is growing fast • Since the 1st India-Africa Conclave in 2005, bilateral trade has been growing annually at 32.4%, even faster than China-Africa trade that grew at 27% • India-Africa trade has reached US$ 63 billion in 2011, up from US$ 5.3 billion in 2001 • If annualised exports growth rates of India and Africa between 2001 and 2011 hold, bilateral trade could reach US$ 176 billion by 2015

11. India-Africa investment and cooperation also in the ascendant • Growing Indian investments and economic co-operation with many African countries • Africa has emerged as a major commodity exporter to India, particularly oil, in the last decade has overshadowed the strides it has made in increasing its value-added exports • Total technology exports from Africa to India increased from US$ 1.8 billion to US$ 9.8 billion in the past decade, growing annually 19%.

12. India-Africa Trade: Emerging trends

13. Overall trade deficit, but India runs a trade surplus with 40 out of the 54 African countries

14. Lessons from the India-Africa Partnership • The increased South-South partnership between Africa and India, led by the private sector, has many success stories as well as lessons to make the partnership stronger • Monitoring and evaluation of global trade is an important component of the Global Review, and the 4th Global Review will examine strategies on how to better integrate private sector within the global South • With this in view, the CII, in collaboration with the WTO, sought to identify the barriers to greater bilateral trade and investments through a private sector survey

15. The aim of the CII-WTO Joint Survey on Trade The aim of the survey exercise was threefold: • Identify obstacles to expanding India-Africa trade and investments; • Survey how to overcome these barriers; and • Examine on-going activities to tackle the barriers and their effectiveness Survey went to private sector in India and a pilot group of 7 African countries (Kenya, Nigeria, South Africa, Tanzania, Uganda and Zambia). Some preliminary findings are presented here

16. Survey Respondents • Out of the African respondents, 9 were business associations mostly at the apex level. The Indian respondents were mostly from businesses with2 sector associations participating in the survey.

17. Survey Respondents • The business respondents from India and Africa were a representative sample across different scales of operations, starting from the small and medium enterprises (SMEs) sector to multinational companies (MNCs).

18. Barriers to Africa's exports to India

19. Barriers to India's exports to Africa

20. Preliminary findings… • Most pressing issues not market access or tariff issues • infrastructure bottlenecks, underdeveloped capital markets, trade facilitation issues and information asymmetries are the major hurdles • Non-tariff barriers like informal controls and corrupt practices, customs delays and paperwork are some direct trade-related concerns that were raised

21. A Central Role for India’s Assistance Business views on India’s role in providing assistance to Africa

22. Areas of Comparative Advantage for India Business views on India’s areas of comparative advantage as an assistance provider

23. India’s role as an assistance provider to Africa • 62% of the businesses in India and Africa view India’s assistance to be central in Africa’s trade and development. Another 20% felt that India will have an increasing role even as assistance from traditional donors decline. • Businesses see India's development assistance to have a comparative advantage in many services sectors, including, ICT, education, vocational skills development, health and financial services. • It asserts India's rise as a global services power that could have development benefits for African South-South partners.

24. India-Africa Conclave partnership to feature at the 4th Global Review on Aid for Trade • The survey that forms part of a CII-WTO Report on enhancing India-Africa Trade and Investment will be presented at the 4th Global Review on Aid for Trade. It will be showcased under the theme: South-South private sector cooperation. • The report is work-in-progress and has benefitted immensely from the deliberations here at the 9th India-India Africa Conclave. • The survey available for greater participation from Indian and African firms. This will strengthen the final findings that will inform discussions and key recommendations to be presented during the 4th Global Review.

25. CII survey on India-Africa tradein collaboration with • CII and WTO are surveying Indian and African businesses to examine how trading ties can be further deepened.  Responses received will be used to draft recommendations on how to expand the already vibrant India-Africa trade partnership.  • Recommendations will examine how to expand the coverage of India-Africa trade and investment, in terms of the goods and services traded, and the number of businesses engaged and investments made.  • Results will be profiled by CII at the 4th Global Review of Aid for Trade, which will focus on "Connecting to Value Chains“, on 8-10 July 2013. • Deadline for completion of online survey submissions is Friday 5 April 2013. • Complete the survey at: https://www.research.net/s/INDIA_AFRICA_SURVEY