India & Angola: Multi-faceted energy partnership


Angola

Relations between India and Angola, one of major oil producers in Africa, are underpinned by a vibrant energy partnership and harks back to pre-independence era of Angola. In an act of solidarity, India supported Angolan freedom struggle against the Portuguese colonial rule till the country attained independence in 1975. Since then, the Indian leadership across decades has retained robust ties with the reigning political establishment in Angola – MPLA (Popular Movement for the Liberation of Angola).

The relations have been nourished by a spate of high-profile visits that include the much-remembered trip by then Prime Minister Rajiv Gandhi to Angola in May 1986. It was reciprocated by the visit by President José Eduardo dos Santos in April 1987.

Blending resources and technology

Angola’s rich resource base, which includes petroleum, diamonds, iron ore, phosphates, copper, feldspar, gold, bauxite, uranium, and India’s technology and expertise has blended to form a multi-layered economic and energy partnership. Driven by oil prosperity, Angola’s booming construction sector has provided a host of opportunities for Indian companies. Angola’s economy is still largely driven by its oil sector which contributes about 50 percent of GDP, more than 70 percent of government revenue, and more than 90 percent of the country’s exports. Diamonds contribute an additional 5 percent to exports.

Energy Diplomacy

Energy forms the heart of the burgeoning India-Angola partnership, with the Lusophone country emerging as the second largest African oil supplier to India, after Nigeria. Indian oil companies have been upbeat about investing in the energy sector in Angola, with delegations from Reliance Industry Limited, HPCL Mumbai, Engineers India Ltd. and Mittal Investments UK Limited visiting Luanda to explore cooperation in the oil and gas sector.

Economic Ties

Bilateral trade between the two countries is estimated to be around USD 5.1 billion (as of 2014-15), with India’s exports valued at 550 million and India’s imports valued at USD 4.5 billion. India is Angola’s second largest trading partner after China while Angola is India’s 39th largest trading partner. A large part of India’s imports consist of oil from Angola.

India’s corporate sector looks at Angola as a land of opportunity, and going by a wave of visits by private business delegations, including those organized by CII in November 2013 and FICCI in May 2014, to Angola, one can expect a marked increase in trade and investment in days to come.

Development Partnership

Development cooperation forms a sturdy pillar of India-Angola partnership. India extended a line of credit of US$ 40 million to government of Angola for CFM Railway Rehabilitation Project, the first government–to-Government initiative between the two countries, which is being executed by Rail India Technical and Economic Consultancy Services (RITES) Limited. EXIM Bank of India extended three credit lines of US$ 5, 10 and 13 million for agricultural equipment and Indian tractors. Two additional lines of credits of US$ 30 and 15 million in 2010 and EXIM Bank of India extended a Line of Credit of US$ 23 million to the Government of Angola in 2012 for supply of tractors, implements and related spares.

India looks poised to set up a Food Processing Business Incubation Centre in Angola under IAFS-II decision in 2011. In September 2013, a Ministry of Food Processing Industries Delegation visited Luanda and held technical discussions on the Project, after Angola finally showed interest in the project.

The Way Ahead

The importance of Angola to India’s Africa diplomacy is clear from the recent visit of Minister of State for External Affairs General (Dr) V.K. Singh (Retd) to Luanda on July 15, 015 as Special Envoy of the Prime Minister of India to hand over invitation for the Third India Africa Forum Summit, to be held in New Delhi in October 2015. The visit also saw the minister engaging with the top Angolan leadership, including Vice President of Angola Manuel Vicente and Foreign Minister Mr. Georges Chikoti, on issues relating to the future trajectory of India-Angola relationship.

India Writes Network

Highlights

Bilateral Relations

Total trade: USD 5.1 billion as of 2014-15

India’s exports: 550 million and India’s imports: USD 4.5 billion

Key India-assisted projects

Line of credit of US$ 40 million to Government of Angola for CFM Railway Rehabilitation Project.

EXIM Bank of India extended three credit lines of US$ 5, 10 and 13 million for agricultural equipment and Indian tractors.

Two additional lines of credits of US$ 30 and 15 million in 2010 and EXIM Bank of India extended a Line of Credit of US$ 23 million to the government of Angola in 2012 for supply of tractors, implements and related spares.

Diaspora

Around 5000 Indians

References

Visit of Minister of State for External Affairs, Shri Anand Shrama to Angola, 8-9 June, 2007

Joint Statement, Visit of Mr. João Miranda, Foreign Minister of Republic of Angola, to India