PM Modi In Ghana: Will It Boost India's Energy & Mineral Security?

Accra, the capital of Ghana, is the headquarters of the African Continental Free Trade Area (AfCFTA).

Why Is India Looking At AfCFTA

The AfCFTA, touted as one of the largest trade blocs in the world, which was launched in 2021, is a step towards creating a single market, comprising 1.3 billion people with a combined GDP of around US$ 3.4 trillion. India seeks to become a partner in this trade bloc.

While China remains one of the biggest trading partners and sources of foreign investment in Ghana, the African nation is now keen to deepen economic ties with India due to their cultural similarities. 

“Several Indian exporters are now looking to increase trade ties with African countries. We need to aggressively focus on them. We can't depend only on our traditional trade partners. Diversification of export markets is critical,” Pankaj Chadha, Chairman, Engineering Export Promotion Council (EEPC), told The Secretariat.

India will endeavour to work out a mechanism with the AfCFTA to ensure it has access to the continent, amid rising geopolitical tensions and America's vacillating tariff policy.

Analysts said that India needs to make a strong pitch to get access to the member countries, in a bid to expand trade with the continent, especially at a time when New Delhi is looking for reliable sources for critical minerals.

Modi, who was conferred with Ghana’s highest state honour in recognition, said that the two countries will form a comprehensive partnership. Africa is home to 60 per cent of the world’s renewable energy reserves and more than 30 per cent of the critical minerals.

India-Africa Ties

Under India’s G20 presidency in 2023, the African Union was given membership of the G20 umbrella. India’s positioning as the voice of the Global South is expected to get further amplified with Modi’s visit to Africa and South America.

According to a report by the Confederation of Indian Industry (CII), Africa has been one of the world’s fastest-growing regions over the past decade, and by 2030, it is expected to have an estimated US$ 6.7 trillion worth of consumer and business spending.

“Given Africa’s resurgence, Indian industry must engage closely with the continent across multiple domains,” a CII report released in August 2024 said. It added that the rapid evolution of Africa's economy is being accelerated by various global shifts, leading to substantial gains for the continent due to its previously low economic base.

At present, India-Africa trade is estimated at US$ 83 billion, of which Indian exports to the continent stood at US$ 45 billion, and imports at US$ 38 billion.

As India looks to achieve energy and mineral security, African oil fields and mines offer an opportunity for Indian investments in mining and other sectors. While this benefits India, it will also create value in Africa.