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India-Zambia Relations Economic Dimensions Play a Big Role

By
Lokesh Kumar
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India and Zambia share friendly and warm relations. Through Indian freedom struggle inspired Zambia’s leader Kenneth Kaunda and Zambia’s independence movement. India was one of the first countries in the world which formally recognised Zambia after it became independent in 1964 that’s why India and Zambia have nurtured a historically cordial relationship, which has deepened and diversified under the India-Africa Forum Summit process initiated in the year 2008. Zambia has always supported India on various International Forums on various matters. Zambia also supported India when India conducted nuclear tests in 1998. Zambia supports permanent membership for India in the expanded and reformed UN Security Council. These diplomatic engages strengthen both countries’ relations in a new way. Between both countries’ political exchanges and dialogues at the highest level have played a key role in building this relationship. The first time Prime Minister Indira Gandhi had visited Zambia thrice, 1970, 1976, and 1980. Later, President V V Giri and N Sanjeeva Reddy visited in 1974 and 1981 respectively; in 1989 Prime Minister Rajiv Gandhi and President R Venkataraman visited Zambia. Recently President Kovind’s visit comes after a hiatus of 29 years marked a new era of cooperation and an important step in repeating the relationship between both countries. 

India and Zambia have broad-based relations that cover a host of sectors including defence, culture, trade, and technical cooperation. According to the Ministry of External Affairs of the Government of India, relations between India and Zambia have been characterized by “close friendship, understanding, and cooperation”. India-Zambia’s economic relations are not a fixed pattern. It has evolved through the connectivity through Indian’s access to Zambia is traced out since the 20th century. Non-governmental arrangements have been existing for the goods and retail transactions in Zambia through private entrepreneurs. The informal economic activities remained in operation till 1964 when Zambia achieved independence. When New Economic International Order appeared in 1990 India and Zambia both reformulated the ideas for foreign relations. Although the historical connectivity between India and Zambia was kept intact as the basis of further relation in the new formulations however the shifting paradigms with the pragmatic pursuit for national interest were redefined.

India – Zambia Economic Cooperation 

India- Zambia economic cooperation covers many dimensions.  Through recently visiting India provides enhancing trade and investment ties, expanding cooperation in capacity building, defence, education, health, and energy and hospitality sector in Zambia. Bilateral trade between both countries has grown steadily over last the few years with total trade having touched US$1.2 billion from April 2017 to January 2018. The balance of trade has remained in favour of Zambia. In the year 2016-17 India’s export stood at US$ 237.21 million while imports at US$ 743, 90 million. For India, Zambia has been an important import destination to source copper, as the latter is the second-largest producer of copper in the world and produces nearly 5% of the entire world’s copper production. Indian imports items mainly include ores (copper and cobalt), semi-precious stones, non-ferrous metals, and raw cotton, while exports items include pharmaceuticals, transport equipment, plastics, and chemicals. 

Several Indian companies have in recent years invested in Zambia with total investments standing presently at about USD 3 billion. With more Indian companies expressing interest to invest in building multi-specialty hospitals, building roads, railways, metros, air services, and setting up satellites for economic use, the High Commissioner estimates that the amount of investment is expected to have an additional increase of USD 8.8 billion, to reach a total investment of USD 11.8 billion. “This has been due to Zambia’s competitive advantage as one of the best investment destinations in the world,” says the High Commissioner of Zambia.

Several Indian companies have in recent years found Zambia as a safe investment ground in Africa. Prasad Seeds, one of India’s major seed providers, has signed an MoU with the Zambia Government for the production of seed. Konkola Copper Mines, a subsidiary of the Vedanta Resources Group have invested USD 2.2 billion in Konkola Beep Water Copper Mining Project, Sulphuric Acid plant, and a new smelter.

RJ Corporation, an Indian firm trading as Varun Beverages have invested in the Pepsi plant while Nava Bharat Singapore Ltd., a subsidiary of Nava Bharat Ventures Ltd., has purchased 65% equity shares in Mamba Collieries Ltd. Nava Bharat has also embarked upon a USD 750 million project to develop a coal-fired power plant with a minimum generating capacity of 270 MW. Tarun Manganese Ltd, one of the group companies of Dharni Sampada Pvt. Ltd. India, has invested in manganese mining and plants to invest another USD 300 mn in the construction of a manganese processing plant. Other success stories include Bharti Airtel, which runs Airtel Zambia and has invested in network expansion to provide low tariffs and roll out deep in rural areas with an aim to bridge the digital divide between urban and rural populations. Indo-Zambia Bank too is a successful JV between three Indian public sector banks viz. Bank of India, Bank of Baroda, and Central Bank of India holding 60% equity, and the Zambian government holding 40%. Tata International is greatly entrenched through its vehicle and bicycle assembly plant, tannery, and hospitality businesses. Tata is also involved in developing two power projects in the country and Tata Consultancy Engineering (TCE) is providing consultancy services to ZESCO for the Kariba North Power Plant and Zambia Revenue Authority for the development of an integrated tax system.

India has played the role of big brother to Zambia in various fields, and this is something that the High Commissioner doesn’t fail to acknowledge and elaborate upon. Other than the technical cooperation extended to Zambia for training its defence and civilian personnel through the Indian Technical and Economic Cooperation Program, India has also deputed armed forces personnel to Zambia to help train the Zambian armed forces.

In recent years, India has embarked upon a program to support Zambia in the development of its infrastructure, trade, and commerce. Exim Bank of India is financing a project aimed at the decongestion of Lusaka roads, wherein flyover bridges and dedicated lanes for public buses will be built, decongest the roads of the capital. Exim Bank has also provided USD 5 million credit to Indo-Zambia Bank, to be utilized for import and export of goods between the two countries. Exim Bank has also provided a Line of Credit (LoC) of USD 50 million to the Government of Zambia for the Itezhi-Tezhi power project and has a 20% equity, after debt settlement agreement, in the Development Bank of Zambia (DBZ).

The results are forthcoming, resulting in trade between the two countries reaching USD 1 billion. While Indian imports from Zambia include copper & articles; natural or cultured pearls; semi-precious stones; imitation jewelry; lead; cotton; raw hides & skin; whereas India’s exports to Zambia include pharmaceuticals; plastics & articles; nuclear reactors; boilers; machinery & mechanical appliances and parts; electrical machinery and parts; sound recorders & reproducers & vehicles. Copper is the major import that shifts the trade balance in favour of Zambia. Some other areas of investment Zambia may be looking forward to including confectionery, tannery, solar energy, and tourism.

Zambian President’s Signed Six Agreements 

The bilateral talks are expected to review the entire gamut of bilateral relations and are expected to cover issues of bilateral, regional, and international interest. The discussion is likely to focus on cooperation in defence, security, geology and mineral resources, energy, health, education, infrastructure, culture, trade, and investment-related issues. The capacity building continues to be an important aspect of our engagement with Zambia after that Prime Minister Narendra Modi and Zambian President Edgar Chagwa Lungu held wide-ranging talks to strengthen ties

The two leaders also deliberated upon enhancing trade and investment, as well as deepening development cooperation. Prime Minister Modi, at a joint press statement with President Lungu, said as a reliable partner in development cooperation, India has been sharing its developmental experiences with Zambia. He noted the progress made in projects related to health, power generation as well as easing traffic in the Zambian capital Lusaka, with cooperation from India.  PM Modi said that both countries will increase their participation in the fields of healthcare, tourism, agriculture, food processing, and mining.

After the delegation-level talks, a Memorandum of Understandings (MoUs) was signed between the two sides on cooperation in the field of geology and mineral resources, defence, and arts and culture. An MoU was signed between the Foreign Service Institute of India and the Zambian Institute of Diplomacy and International Studies. Also, two agreements were inked on the ‘E-VBAB Network Project’ (e-education) as well as between the Election Commission of India and the Electoral Commission of Zambia.

PM Modi said the Indian government will cooperate in setting up an Incubation Centre in Zambia. “India will also provide 100 solar irrigation pumps to boost agriculture and send 1,000 tonnes of rice as well as 100 tonnes of milk powder to Zambia,” he said. “Zambia is a country rich in mineral wealth and among other minerals, India takes large quantities of copper from the African country,” he added. Enhancing cooperation Modi said the MoU on mineral resources will enhance cooperation in the field of mining and a framework will be built for exploration and extraction of mineral resources.

Underlining that an important MOU has been signed on defence cooperation, PM Modi said it will increase exchanges in the field of defence. Indian military and air-force training teams will be deployed in Zambia to assist in enhancing the capabilities of the armed forces of that country, the prime minister said, adding India will also deploy five fire tenders in Zambia Air force bases.

Conclusion 

India has been engaging diplomatically, economically, and strategically with Zambia. It is evident that India & Zambia’s relation in the 21st century is going far better and the two are reaching towards more initiatives to strengthen economic trade and commerce between both countries in new imperatives.

References 

  • MEA, http://www.mea.gov.in/media-briefings.htm?dtl/29787/Transcript_of_Media_Briefing_on_the_upcoming_visit_of_President_to_Equatorial_Guinea_Swaziland_and_Zambia
  • MEA, GOI, India- Zambia Joint Statement , http://www.mea.gov.in/bilateral-documents.htm?dtl/29815/IndiaZambia+Joint+Statement+during+State+Visit+of+President+to+Zambia+April+1012+2018
  • Times of Zambia, 12April 2018, http://allafrica.com/stories/201804120517.html
  • https://www.mea.gov.in/Portal/ForeignRelation/Zambia_August_2017.pdf
  • MEA, GOI http://www.mea.gov.in/Portal/ForeignRelation/Zambia_Jan_2015_eng.pdf OI,
  • MEA, GOI, http://www.mea.gov.in/Portal/ForeignRelation/Zambia_Jan_2015_eng.pdf OI

Speech, Zambia- India Business Forum, https://presidentofindia.nic.in/speeches-detail.htm?483

  • President Kovind’s Speech, Lusaka, April 10, 2018, https://presidentofindia.nic.in/writereaddata/Portal/Speech/Document/482/1_Speech_Lusaka_Community_Reception.pdf 
  • https://economictimes.indiatimes.com/news/international/world-news/djibouti-zambia-victims-of-chinese-grand-strategy-in-africa/articleshow/82032763.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppstTIONSDjibouti & Zambia: Victims of Chine

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