India-Kenya ties: What does the future hold?

By Koustubh Tol

On 10th January 2017, Kenyan President Uhuru Kenyatta began his three-day visit to India by attending the Vibrant Gujarat Global Summit. This comes almost six months after Prime Minister Modi’s visit to Kenya as part of his Africa tour where the two countries had signed seven agreements to further increase the economic ties. With gradually securing global investments in areas such as healthcare, education, defence and infrastructure development, Mr Kenyatta has been instrumental in establishing a stable economic growth for Kenya in the recent past.

Uhuru Kenyatta visited India at the Vibrant Gujrat Summit, 2017. | Source: Lolwe Television Network

A strong relationship with the East-African nation is of immense importance to India. But India must play its cards right majorly because of two reasons:

Chinese Dominance in Africa

After the bilateral talks, India announced a $100 million Line of Credit (LOC) for Kenya’s agricultural mechanisation in addition to the $44.95 million credit line which was assured for the development of small to medium enterprises and textiles during Prime Minister Modi’s last visit to Kenya.

Though India is trying hard to increase the bilateral ties with many of the East-African nations, it has lost a lot of ground in the last decade to China which has provided huge sums of investments to the region. China is currently funding and developing East Africa’s modern railway link project which is expected to ease the goods transport from Africa’s land-bound countries. Apart from this, China is also helping Kenya in the development of many infrastructural projects such as the construction of roads and shipping ports.

With India seeking to regain the position of number one trading partner for Kenya, investments in the much-needed sectors for Kenya such as healthcare, pharmaceuticals, and education, will certainly open the gates for India’s re-entry into the East-African region.

Apart from this, India will be providing defence and security co-operation to Kenya for its ongoing war against terrorism from the Al-Qaeda-linked Islamic group Al-Shaabab in Somalia.

For an increase in ties between the two countries, India is exploring the possibilities of importing food grains from Kenya to satisfy the rising demand of pulses back home which will make it a win-win situation for both the countries. Taking over China as the biggest investor would be tough for India, but with gradual improvements in bilateral ties with the African nations can make it easier for India to climb the mountain in the future.

The race for regional dominance with Tanzania

Since the appointment of John Magufuli as the new President of Tanzania, the country is slowly gaining ground in the regional politics. Mr. Magufuli’s approach of anti-corruption and stronger economic policies have created a new economic hub in the East-African region. In recent times, Kenya and Tanzania have been lodged in a bitter battle for economic supremacy.

Though Kenya is building the ambitious rail link project, many of region’s smaller countries are shifting their focus towards the new economic force considering the availability of cheaper resources.

With Tanzania planning to convert the Bagamoyo port into the biggest transport hub of the region as compared to the development of Kenya’s Lamu port, the move has only added fuel to the fire. With rising terrorism in Kenya, investors would surely think of their options.

Tanzania has commenced with its ambitious project of Bagamoyo Port. | Source: Port Strategy

While the rising competition is good for the economic development of the entire region, many of the developmental projects, most of which are funded by China, may come under jeopardy.

[su_pullquote]An improvement in relations with the African nations such as Kenya and Tanzania will be of great economic and diplomatic importance for India.[/su_pullquote]

Triggering India’s investments in other nations of the region, Mr Modi had extended his support to the development of resource-rich Tanzania during his last visit. India signed five key agreements including the $92 million Line of Credit (LOC) for the development of water resource sector. An improvement in relations with the African nations such as Kenya and Tanzania will be of great economic and diplomatic importance for India.

Aiming a comeback in Africa’s most important economic region, India must play its cards right. Otherwise, it may lose the only chance it has.

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Featured Image Courtesy: The Star

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