OPINION PIECE
29 September 2025
Unlocking Africa's Potential: India's Private Sector Steps Up Amid Record Trade Milestones
By Ankur Singhal, CEO: FirstRand Bank India
As the dust settles on the recent 20th CII India Africa Business Conclave 2025 held in New Delhi, the Indo-Africa economic corridor emerges as a beacon of opportunity in an uncertain global landscape.
This landmark event, organised by the Confederation of Indian Industry, brought together leaders to explore private sector expansion and avenues for strong financial partnerships, coinciding with a historic milestone: bilateral trade between India and Africa surpassing $100 billion in the 2024-25 fiscal year, nearly doubling from $56 billion in 2019-20.
This surge underscores Africa's rising agency in global partnerships, shifting from extractive models to collaborative growth driven by mutual respect.
Africa's demographic dividend is impossible to ignore
By 2050, one in four global citizens will be African, fueling a youthful, urbanizing continent that's increasingly digitally connected. With a combined GDP exceeding $3.4 trillion across 54 nations under the African Continental Free Trade Area (AfCFTA), the continent offers a vast domestic market eager for quality products and services, complemented by abundant natural resources. India, with its pool of sophisticated corporates and investors, is uniquely positioned to capitalize on this complementarity.
Cumulative Indian investments in Africa have topped $75 billion from 1996 to 2024, placing India among the top five investors on the continent. In South Africa alone, over 150 Indian companies operate, with investments nearing $10 billion.
Yet, this partnership's full potential remains untapped, hampered by structural challenges across four key themes: trade, local business development, project execution, and investments.
Trade flows, now over $100 billion annually, could multiply with better infrastructure. Indian exports to Africa already exceed $50 billion, but exporters on both sides struggle with assessing creditworthiness of counterparts due to fragmented information. The scarcity of Indian banks in Africa—and vice versa—exacerbates this, unlike robust banking presences in corridors like India-Japan or India-US. Increasing cross-border banking footprints could boost trade multifold, as seen in other high-volume routes.
To address these, innovative tools are essential.
Digitised trade platforms, insurance-backed instruments, and structured risk mitigation can enhance transaction security, moving beyond traditional mechanisms. For instance, platforms leveraging blockchain for transparency could reduce fraud risks, drawing from successful models in Asia. Without such advancements, the corridor risks stagnation despite its scale.
On the ground, Indian companies building local businesses in Africa face liquidity hurdles in local currencies, leading to reliance on foreign currency financing and exposure to volatility. This curbs expansion appetite, even as demand grows.
Promoting Rupee-denominated trade could alleviate these liquidity issues, stabilizing costs for African importers and encouraging deeper integration.
Similarly, Africa's infrastructure deficit—estimated at trillions in needed investment—presents opportunities for Indian engineering, procurement, and construction (EPC) firms. Shifting to transformative funding models, where contractors facilitate sovereign financing, is crucial. Banks with Indo-African expertise can provide end-to-end structuring, offering local insights to bridge gaps.
Investments highlight the evolving role of banks as lifecycle partners. Beyond mere financing, institutions now assist from target identification to acquisition funding and ongoing needs. This holistic approach is vital as Indian firms ramp up stakes in sectors like manufacturing and renewables.
Looking ahead, four imperatives outlined at the Conclave chart the path for private sector expansion. First, AfCFTA stands as the gateway to scale, creating a unified market of 1.4 billion people. Indian investors can build continent-wide supply chains and regional hubs, amplifying efficiencies. Second, sustainability must underpin growth. Africa's development cannot replicate past environmental missteps; instead, focus on green initiatives like renewable energy, where ESG-linked financing delivers both impact and returns. Third, scale is non-negotiable—Africa's opportunities demand ambitious capital in technology, manufacturing, and infrastructure, moving past fragmented pilots.
Finally, trust forms the bedrock.
Success favors consistent, transparent partners who commit long-term, not opportunistic entrants. India exemplifies this, offering dignity and mutual respect rather than dominance, resonating with Africa's aspirations for inclusive growth. Banks like RMB, with presence on both sides of the India-Africa corridor, are well placed to support the next phase of growth, having facilitated billions in trade and investment, drawing on two decades of corridor expertise to navigate challenges daily.
Beyond traditional banking, solutions lie in leveraging India's fintech prowess. India's digital stack—proven in exponential telecom and fintech growth—can address Africa's untapped potential, mitigating structural issues through mobile payments and digital lending. If these challenges are tackled, trade and investment flows could surge significantly.
The real frontier, as emphasised at the Conclave, is not merely doing business in Africa but building businesses with Africa—on equal terms and with shared value.
With AfCFTA, sustainability, scale, and trust as guideposts, Indian private sector investors can accelerate Africa's transformation into the global economy's engine this century.
The $100 billion trade milestone is just the beginning; bold, fact-driven action now will define the next era of prosperity.
ENDS