India's 'economic diplomacy' bolsters lending in Africa, countering China's influence

livemint.com:

Bloomberg, Forty-two African nations received about $12 billion or 38% of all credit extended by India in the last decade — just a few percentage points below its neighbours, Harsha Bangari, the managing director of India’s Export-Import Bank said in an interview. According to Bangari, the bank serves as a tool for India's "economic diplomacy." He further mentioned that India has established 195 project-based lines of credit throughout Africa, a number three times higher than the ones it has implemented in its own region over the past decade, Bloomberg reported.

“Africa has made good use of credit lines," extended for projects that include health care, infrastructure, agriculture and irrigation and India is seeing a steady increase in demand, she said. Despite the recent efforts by India to engage with countries in the world’s second-largest continent, the nation has lagged behind its bigger and wealthier neighbour in making inroads in Africa.

While China’s loans to Africa have dipped since 2016, overall in the 10 years to 2020, it pledged $134.6 billion to African nations, according to data from Boston University’s Global Development Policy Center. That’s almost 11 times more than what India has offered.

China has taken proactive steps to exploit mineral resources in Africa, specifically focusing on emerging lithium supply centers. This strategic move allows the North Asian nation to navigate a challenging market for a crucial metal used in electric vehicles.

China holds the title of being the largest purchaser of bauxite from Guinea, a country known for its significant reserves of this ore, essential for alumina production. Furthermore, China has made substantial investments in the development of the world's largest