Amid rising US tariffs and shifting global trade patterns, India and Africa are transforming their partnership from aid and extraction into industrial collaboration, supply chain resilience, and geoeconomic influence.
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The global trading order is in flux—upended by rising protectionism, intensifying US–China competition, and the emergence of regional trade and investment blocs. For India, these disruptions coincide with a strategic shift toward South–South cooperation, supply-chain diversification, and geoeconomic hedging. Africa has become central to this reorientation: it offers expanding consumer markets and deepening trade and investment links with India.
Bilateral trade rose from US$68.5 billion to US$83.34 billion between 2011-12 and 2023–24, positioning India as Africa’s third-largest trading partner after the EU and China. Beyond trade, India is Africa’s second-largest lender, channelling much of its aid through the African Development Bank (AfDB). Cumulative Indian investments in Africa from April 2010 to March 2023 totalled US$65.8 billion, with substantial investments in countries such as Egypt, Nigeria, Ethiopia, and Ghana. The country aims to reach an ambitious target of US$150 billion by 2030, underscoring the growing strategic and developmental weight of the partnership.
Table 1: Sector-wise Indian Investments in Africa 
This growing economic presence complements Africa's preferential access to the US via the African Growth and Opportunity Act (AGOA) and the integrative potential of the African Continental Free Trade Area (AfCFTA)—and positions Africa not merely as a recipient of aid or raw materials supplier, but as a strategic partner in industrial and economic transformation. Against this backdrop, and in response to Washington’s protectionist turn—especially under escalated tariffs—the evolution of India–Africa relations is accelerating toward an industrial and geostrategic partnership with long-term global implications.
The shifting tariff landscape in the United States has created sector-specific opportunities for Indian companies to expand manufacturing and operational bases across Africa. Foremost among these is the pharmaceutical sector, where Africa faces a persistent shortage of affordable and reliable medicine production. Indian pharmaceutical companies, already established as global leaders in generic drug manufacturing, are uniquely positioned to meet Africa’s healthcare needs while benefiting from regulatory frameworks that increasingly favour South–South partnerships. This aligns both commercial and developmental imperatives, making pharmaceuticals a cornerstone of India’s Africa strategy.
Indian pharmaceutical companies, already established as global leaders in generic drug manufacturing, are uniquely positioned to meet Africa’s healthcare needs while benefiting from regulatory frameworks that increasingly favour South–South partnerships.
In parallel, textiles and automobiles present significant opportunities, particularly through AGOA’s preferential access to US markets for eligible African countries. By establishing manufacturing hubs within Africa, Indian firms can combine technical expertise with local cost advantages while simultaneously circumventing potential tariff barriers on direct exports to the United States. The IT and telecommunications sectors represent a further frontier, driven by Africa’s rapid digital transformation. Indian companies can play a catalytic role in building data centres, software development hubs, and telecommunications infrastructure, supporting both domestic development and global operations.
The escalation of US tariffs—most dramatically on both China and India—has created a distinct triangular arbitrage opportunity that Indian firms are increasingly poised to exploit. Tariffs on Chinese imports, which soared to as high as 145 percent in early 2025, have since been moderated to approximately 30 percent following negotiations in early May, but the peak levels underscore the protectionist risks across sectors. At the same time, US tariffs on Indian goods have jumped sharply: an initial 25 percent "reciprocal" levy in early 2025 was followed by an additional 25 percent penalty tied to India's ongoing purchases of Russian oil, effectively elevating the total duty to 50 percent starting late August. In this context, Africa's preferential trade access under regimes like AGOA, combined with its growing consumer market, has gained strategic value. For Indian companies, establishing manufacturing operations on the continent offers a dual advantage: preserving access to US markets under more favourable tariff treatments while also tapping into Africa’s expanding demand.
Africa’s preferential trade access under regimes like AGOA, combined with its growing consumer market, has gained strategic value.
This opportunity is reinforced by the US policy of “friend-shoring,” which redirects supply chains to politically aligned nations. African countries, many of which maintain strong partnerships with both India and the United States, serve as neutral and credible manufacturing hubs that address American supply chain security concerns while drawing on Indian capital and know-how. The AfCFTA magnifies these benefits by integrating a market of over 1.4 billion people, enabling Indian firms to scale operations beyond single-country investments. This evolution represents a geoeconomic shift from the traditional extractive model of India–Africa trade to a value-added partnership embedded in global supply chain realignments.
Africa’s policy frameworks and multilateral alignments are further encouraging Indian firms to expand their footprint. Infrastructure development incentives present the most immediate attraction for Indian companies. Governments across the continent are offering tax breaks, land concessions, and regulatory incentives to attract foreign investment in manufacturing and technology transfer. Nigeria exemplifies this trend, positioning itself as a regional gateway with low labour costs and favourable taxation despite persistent governance and infrastructure challenges.
Multilateral frameworks add another layer of opportunity. The expansion of BRICS to include Egypt and Ethiopia deepens institutional cooperation, offering Indian firms enhanced access to financing, technology transfer agreements, and diplomatic support. Russian partnerships within BRICS further extend the scope of joint ventures, particularly in pharmaceuticals, scientific instruments, and technology.
Collectively, these pathways transform Africa into both a manufacturing base and a consumer market for Indian companies, embedding industrial partnerships within broader geoeconomic frameworks.
At the same time, regulatory harmonisation across African markets—spanning pharmaceuticals, telecommunications, and financial services—is lowering transaction costs and making pan-African strategies more viable. Development finance institutions, including the African Development Bank, the BRICS New Development Bank, and Indian development agencies, are also providing capital and technical support tied to sustainability and local participation. Collectively, these pathways transform Africa into both a manufacturing base and a consumer market for Indian companies, embedding industrial partnerships within broader geoeconomic frameworks.
Finally, Africa is increasingly becoming central to India’s strategy of building resilient global value chains and diversifying export pathways. By situating Africa at the intersection of US tariff politics, continental integration, and multipolar institutional frameworks, India can not only secure its own geoeconomic interests but also contribute to Africa’s industrial transformation. The evolution of India–Africa trade thus reflects a broader reconfiguration of global economic geography—one where the Global South asserts itself not as a peripheral actor but as a key arena of industrial co-creation and strategic connectivity.
Soumya Bhowmick is a Fellow and Lead, World Economies and Sustainability at the Centre for New Economic Diplomacy (CNED) at the Observer Research Foundation.
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Dr. Soumya Bhowmick is a Fellow at the Centre for New Economic Diplomacy (CNED) at the Observer Research Foundation (ORF). He completed industry- endorsed Ph.D. ...
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