India yesterday unveiled a new strategy of "resource diplomacy" in Africa, hosting its first ever summit meeting with leaders from the continent and offering $5bn (£2.5bn) in credit and hundreds of millions of dollars of financial help.
In a growing sign of economic muscle, the Indian prime minister, Manmohan Singh, told leaders of 14 nations in the first India-Africa summit that New Delhi would provide half a billion dollars in grants for development. Trade, which is likely to be boosted by new measures to ease access from poor countries in Africa, is also projected to grow to $50bn by 2012.
But India still remains in the shadow of its larger neighbour China. Last year trade between Beijing and the continent was $73bn. However with its economy growing at almost 9% a year, India has little choice but to follow in the footsteps of the United States, China and the European Union by offering cash to secure oil, food supplies and scarce metals.
In Congo, Chinese state-owned firms are building railways, roads and mines at a cost of $12bn, in exchange for the right to mine key metals. Beijing's investment in Sudan's oilfields has given the regime political cover over the unfolding refugee crisis in Darfur. Washington has also been quietly busy, say analysts, securing US access to Africa's oil with a new $400m military command, Africom. By 2015, African crude will make up a quarter of all oil imports to the US, making the region one of the largest future suppliers of US oil - larger even than the Gulf.
India, say experts, faces similar challenges. The country already imports 11% of its oil needs from Nigeria and is pushing for new territories in Angola, sub-Saharan Africa's largest oil producer, where it has lost out in recent years to the Chinese. Before 2025, India will overtake Japan to become the world's third-largest net importer of oil, after the US and China.
However experts say India will have to rely on its "soft power" to win over Africa. "We need Africa not only for oil but for political power too. We need African votes in the United Nations to get on to the security council," said Ajay Dubey, professor of African Studies at Delhi's Jawaharlal Nehru University. "But we do not have the money of the Chinese or the military might of the Americans. Therefore we have to rely on cooperating with African nations in information technology, agriculture, engineering. Areas where we have something to give."
African leaders said Indian companies, which specialise in producing goods for poor people, could transfer their knowledge and skills to African businesses. "Indian companies in Senegal are transferring technology, assistance, training and know-how," wrote Senegal's president Abdoulaye Wade this week.
"For the first time Africa has a trading partner that who does not relate to it through dependence, charity or a colonial mindset."