India pitches for wider financial sector engagement with Africa

Ahead of India Africa Forum Summit, Sudhakar Dalela, Secretary (Economic Relations), Ministry of External Affairs, urged stakeholders to explore more active engagement with institutions such as the African Development Bank, Afrexim Bank, and the ECOWAS Bank for Investment and Development. He also called for greater attention to insurance coverage and financial security mechanisms for projects in Africa.

He was addressing the FICCI-India Exim Bank Conference on Strengthening India-Africa Trade through Innovative Finance.

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Dalela highlighted that strengthening development and economic cooperation aligned with the African priorities has remained a central tenet of India’s engagement with Africa. “From Lines of Credit for infrastructure and development projects, high-impact community development projects, to training thousands of African professionals and youth, the emphasis has consistently been on building human and physical capacity, empowerment local communities and skilling,” Dalela said.

Alluding to India's growing engagement with Africa across all key pillars, in consonance with the government's priority for strengthening partnerships with countries in the Global South, the Secretary (ER) pointed to India's rapidly expanding presence on the continent as evidence of strategic commitment: 17 new missions have been opened across Africa in the past seven to eight years, covering all sub-regions. India is currently Africa's fourth-largest trading partner and among its top five investors. The African continent is the second-largest recipient of India's overseas development assistance.

The financing challenge was further highlighted by Deepali Agrawal, Deputy Managing Director of India Exim Bank, who noted that “Africa requires annual infrastructure investments worth US$155 billion until 2040 for sustained economic growth and improved living standards,” however, “funding constraints are impeding the region's infrastructure development as the current spending levels are insufficient to meet the region's total infrastructure investment demand.”

Agrawal outlined the scale of Exim Bank's existing financing architecture in Africa: 308 projects supported under Lines of Credit valued at $8.9 billion across 39 countries, facilitating access to essential infrastructure, improving livelihoods, boosting agricultural productivity, enhancing industrial output and promoting sustainable development. These projects have also generated $7.1 billion in business opportunities for more than 160 Indian companies. She also highlighted Africa's persistent trade finance deficit — estimated at $80 billion to $120 billion annually — with only 40 per cent of financing requests from African businesses approved, compared with a global average of 60 to 70 per cent. Exim Bank's Trade Assistance Programme, launched in 2022, has supported 150 transactions across 25 countries and generated $1.4 billion in incremental bilateral trade.

Mercantile trade between India and Africa reached $85 billion in 2025, she said, recording year-on-year growth of 10.7 per cent — more than double the 4.6 per cent growth in India's overall trade during the same period. Indian outward investment in Africa stood at $91 billion for the period 1996 to March 2025, Agrawal informed.

Jyoti Vij, Director General of FICCI, called for a shift in both scale and urgency. "As Indian industry continues to expand its footprint across Africa, the need for robust and innovative financing solutions becomes most critical," she said, arguing that stronger collaboration between financial institutions, government, and industry was now essential to build what she termed "a resilient and enabling ecosystem."