India Counters China's Growing Influence In Africa With $12 Billion In Credit To 42 Countries

In a bid to expand its influence in Africa and counter the Chinese belt-and-road initiative (BRI), India has increased its aid to Africa to $12 billion, making it the second-largest recipient of Indian aid, after Asia.

With a focus on capturing opportunities in the resource-rich region, India aims to strengthen its presence in Africa.

Over the past decade, 42 African nations have emerged as key beneficiaries of Indian credit, receiving approximately $12 billion in loans, which accounts for a significant 38 per cent of all credit extended by India.

The largest recipients are India's neighboring countries in Asia, which received $17.1 billion in aid.

However, this is less than 11 times the $134 billion aid that the Chinese has offered to the African nations.

This aid is primarily centered around projects that include health care, infrastructure, agriculture and irrigation of African nations, according to a Bloomberg report.

Apart from countering Chinese influence, this aid also aims to provide an alternative to the debt traps often associated with Chinese financing.

The Chinese loans under the BRI has come under scrutiny for its predatory nature, as several countries have fallen victim to the hidden risks associated with Chinese loans. Many nations that have participated in the BRI have faced challenges related to the terms and conditions of Chinese loans.

Critics argue that these loans often come with high interest rates, stringent repayment terms, and a lack of transparency. This predatory lending strategy has left some countries burdened with heavy debt and struggling to repay their obligations.

India's approach to credit extension in Africa emphasises the importance of responsible lending and sustainable development.

By offering competitive and transparent financing options, India aims to provide African nations with alternatives that prioritise their long-term economic growth and social welfare.

Through this approach, India seeks to foster partnerships based on mutual respect and mutual benefits, while avoiding the pitfalls of predatory lending practices witnessed under the BRI.

Explaining India's approach to provide aid to Africa, the Indian External Affairs Minister S Jaishankar has earlier stated, "We are trying to think 25 years from now, asking ourselves where are we likely to be in 2047 and what should we be doing now to prepare for it.”

According to the Bloomberg report, in the last nine years, 18 of the 25 new consulates opened, were in Africa.

With Africa now positioned as the second-largest recipient of Indian credit, it signifies the continent's growing significance in India's strategic objectives.