'Maghreb region should be next focus of India Inc'

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Ranjana Narayan | 25 Feb, 2013
It's time India turned its attention to the countries of Northwest Africa and Indian companies explored and expanded their operations to the Maghreb region, its envoys based in New Delhi said.

The Maghreb should be the "new target" of Indian diplomacy and it should be the "logical location for Indian companies to diversify and expand," said Mohammed Hacene Echarif, Algeria's ambassador to India, voicing the unhappiness of the region at not being allowed to play a more prominent role in ties with India.

The Maghreb region comprises Algeria, Libya, Mauritania, Morocco and Tunisia and contributes 20 percent of the African continent's gross domestic product (GDP) though it has only nine percent of the population - around 85 million. Strategically located along the Mediterranean Sea, the region has old civilizational links with India. It is also a rich area with huge reserves of oil and gas, phosphates and iron ore and could be a valuable transit point to southern Europe and the EU market.

And yet, it has not received the kind of attention it so richly deserves. The countries are also keen to boost two-way trade and investment with India.

"India continues to look at us as an extension of the Middle East...We are not so," Echarif told IANS. "We have our own specificities, and our kind of community of Berber-Arab, not Arab...It is disappointing."

While India's trade with Africa is soaring, having touched $60 billion in 2011 and touted to reach $90 billion by 2015, it is paltry with the Maghreb region.

In 2011-12, India's exports to the five Maghreb countries stood at 0.52 percent of its total exports, while imports from the region constituted 0.82 percent of its total imports. The region, despite the recent political turbulence, better known as the 'Arab Spring', has garnered more than $35 million in FDI in the past seven years in the fields of automotives, aerospace, iron and steel, among others.

It has seen a yearly growth 5.5 percent compared to 3.5 percent growth in the rest of Africa and 1.8 percent growth in the Mediterranean region.

The countries are also negotiating on a free trade agreement that would boost connectivity and commerce and make the bloc more attractive to outside trade. Trade among the Maghreb countries stands at around three percent, compared to 65 percent between the countries and the European Union.

While India's exports to Algeria grew over six percent from 2011 to 2012, from $782 million to $835 million, in Libya it went down 54 percent in the same period, from $132 million to $61 million.

"There are no companies from Algeria, Tunisia, Libya and Mauritania based in India. However, OCP Limited from Morocco, a supplier of phosphate fertiliser raw material, has an office in India," a CII official told IANS.

Explaining the low volume of trade, the official said:, "The Maghreb countries offer a small market for Indian goods."

However, "industry-led initiatives through the investment route would help to optimally engage the Maghreb economies with that of India, which would lead to rapid growth in bilateral trade," the CII official said.

Investments for joint ventures or wholly owned subsidiaries in the Maghreb countries would be another way to open up the route for enhancing trade.

"Holding trade fairs of Indian goods in the Maghreb region at regular intervals as well as engaging the countries as a manufacturing and distribution base for penetration into the rest of Africa would also help to promote bilateral trade," the official stated.

Algeria is among the world's top 20 producers of gas, while Morocco and Tunisia are the second and fifth largest producer of phosphates.