Historical Context of India-Nigeria Relations
India's relationship with Africa, including Nigeria, has deep historical roots that date back to 30 BCE, when trade exchanges flourished between India and various regions of Africa, including Egypt. During the Roman Empire, particularly under Emperor Augustus, trade routes were well established, with up to 120 Roman ships per year departing from Myos Hormos (currently Al-Qusayr) in Egypt to engage in commerce with India. Indian dhows regularly reached the East African coastline, promoting the exchange of goods such as handloom textiles, spices, and other products. Recent archaeological discoveries in Egypt have affirmed that Indian merchants who were active in trading with the Mediterranean region originated from the Coromandel Coast of India, illustrating the extensive historical ties between India and the African continent.
The wave of independence movements across Africa in the 20th century saw India take a proactive stance in supporting these transitions. After gaining independence in 1947, India became a strong advocate for African nations striving for freedom from colonial rule. Nigeria's independence in 1960 prompted India to establish a diplomatic mission in the country just two years earlier, a reflection of India's commitment to fostering relations in the region. In the wake of Nigeria's liberation from British colonialism, India played a crucial role in assisting the new Nigerian government in various sectors, including military modernization. Notably, India contributed to the establishment of key military institutions such as the Nigerian Defence Academy (NDA) in Kaduna and the Naval College in Port Harcourt, alongside numerous training facilities.
The interactions between the two nations also encompass personal ties; several prominent Nigerian leaders received training at the DSSC, including President Muhammadu Buhari in the 1970s, as well as Presidents Olusegun Obasanjo and Ibrahim Babangida in the mid-1960s. Additionally, since 1964, India has been pivotal in supporting Nigeria's capacity-building initiatives through the Indian Technical and Economic Cooperation (ITEC) Programme. This programme provides approximately 250 civilian and an equal number of military training slots annually for Nigerian candidates, facilitating knowledge and skill development to boost Nigeria's capabilities in various sectors. Following Nigeria's independence, the influx of Indian businesses into the country marked a significant step in enhancing economic ties between the two nations. This mutual participation in various sectors solidified a bond that continues to evolve in contemporary geopolitics.
Economic Relations
India and Nigeria have developed robust economic relations, thanks to their diverse natural resources and their status as the largest economies in their respective regions. India has extended a concessional line of credit to Africa totaling almost $9 billion, with ongoing projects that account for about $7.4 billion. Trade between India and Nigeria reached an impressive $13.89 billion during the fiscal year 2018-19, highlighting the depth of their economic partnership. This burgeoning relationship is particularly remarkable given the security challenges posed by groups like Boko Haram and the Black Axe mafia in Nigeria. Despite these concerns, Indian firms have become significant players in Nigeria's economy, serving as the second-largest employer after the Nigerian Federal Government, with over 135 Indian enterprises operating in diverse sectors.
The sectors in which Indian firms have ventured in Nigeria include pharmaceuticals, engineering, electrical machinery, chemicals, and plastics. Prominent companies such as Bharti Airtel, Tata, Bajaj Auto, and Mahindra represent India's economic interests in Nigeria. Indian investments have climbed to approximately $15 billion, according to reports from the Indian High Commission in Abuja. Furthermore, there was a substantial trade exchange in the fiscal year 2018-19, with Indian exports to Nigeria valued at $3 billion, while imports from Nigeria aggregated approximately $10.88 billion. Nigeria emerged as a crucial supplier of crude oil to India, ranking as the fifth-largest seller in 2020, and also as a key exporter of liquefied natural gas (LNG) after Qatar and the UAE.
In terms of broader economic affiliations, India stands as Nigeria's largest trading partner in Africa, boasting a trade volume of around $16.35 billion for the year 2019-2020. India has established itself as the leading investor in Nigeria, with an investment base nearing $20 billion, and as one of Africa's top investors overall, holding a cumulative investment of about $70.7 billion. Notably, India ranks as the third-largest trading partner of Africa after China and the United States, accounting for 6.4% of the continent's total trade.
A significant diplomatic milestone occurred in September 2023 when Nigerian President Tinubu visited New Delhi, leading to Indian investors pledging an additional investment of nearly $14 billion into Nigeria's economy. Looking ahead to 2024, Nigeria is poised to be India's third-largest trading partner in Africa, following South Africa and Tanzania. While details regarding Nigerian investments in India are less documented, the mutual benefits of their relationship indicate a strong potential for further collaboration and economic growth in the future.
India's Oil Consumption and Import Dynamics
India ranks as the third-largest oil consumer globally, trailing only behind the United States and China. This significant demand places India in the position of being the second-largest importer of oil, fueled by a consumption rate of approximately 5.5 million barrels per day. The country's extensive reliance on oil imports underscores its growing economy and the energy needs of its vast population.
In terms of sourcing, India's crude oil imports are diverse and span various countries. Saudi Arabia, Iraq, Iran, Kuwait, Kazakhstan, Russia, and the UAE are among the primary suppliers. However, Nigeria's contribution has notably diminished, particularly in 2021, where the amount imported from the west African nation has significantly reduced. This shift can be attributed to changes in global oil prices and India's strategic pivot towards more economical options, particularly from regions like the Middle East.
From 2020 to 2021, the United States emerged as India's second-largest oil supplier, following Iraq, which maintained its position as the top supplier. Over recent years, since 2018, India has increasingly turned to Iraq for its Basra Oil, favored for its cost-effectiveness. In contrast, crude oil imports from West Africa, including Nigeria, ranked fifth among India's crude oil purchases.
Looking ahead to 2023, the landscape of India's oil imports has evolved further, with Russia emerging as the largest crude supplier. As a consequence of geopolitical dynamics and shifts in global oil markets, Russia accounts for over 30% of India's total oil imports. This marked transition highlights not only India's adaptable oil sourcing strategy but also the intricate relationships between energy supply, international relations, and market prices, reflecting the trends in the global oil trade.
Overall, India's oil import landscape is shaped by various strategic considerations, from economic factors to geopolitical relationships, as the country continues to navigate its path in the energy domain. As such, the role of each supplier, including Nigeria, will be critical in shaping future trade dynamics and energy security.