India-Nigeria relations: Dynamics and possibilities

Prime Minister Narendra Modi visited Nigeria on the first such state visit by an Indian PM to the African nation in 17 years. PM Modi held talks with his Nigerian counterpart to review the diplomatic and strategic partnership between New Delhi and Abuja and to strengthen bilateral ties between the two countries. Moreover, the Prime Minister will make an official visit to Guyana from November 19-21, the first by an Indian Prime Minister since 1968. In Guyana’s Georgetown, Modi is set to attend the Second CARICOM-India Summit and hold bilateral meetings with CARICOM member countries.

Although India-Nigeria relations can be traced to ancient times, and Nigeria is host to a long-established Indian diaspora, in recent times, a new set of dynamics has been emerging that is rapidly expanding relations.

The Indian diaspora in Nigeria is quite significant and has a long history. There are approximately 800,000 people of Indian origin living in Nigeria, making them the largest racial minority in the country. Most of the Indian community in Nigeria is Hindu, and they are primarily concentrated in cities like Lagos, Abuja, Port Harcourt, Onitsha, Ogbomosho, and Ibadan. The Indian diaspora has made substantial contributions to Nigeria’s economy, particularly in sectors such as textiles, pharmaceuticals, fishing, and engineering. Many Indian businesses have set up operations in Nigeria, creating jobs and opportunities for Nigerians. The presence of the Indian diaspora in Nigeria is a testament to the strong bilateral ties between the two countries and their shared history as part of the British Empire.

India’s engagement with Nigeria owes to a very large extent its solidarity with the African anti-colonial and liberation movements. And since then India’s efforts at deepening South-South cooperation have always been a major pillar of its foreign policy and diplomacy. Africa has always been India’s sister continent.
In terms of expanding trade relations, India is a major trading partner for Nigeria, with Indian products accounting for over 70% of the pharmaceutical market in Nigeria. Bilateral trade reached $7.89 billion in 2023-24, despite fluctuations in recent years.

Nigeria is the 2nd largest trading partner of India in the African region, with a bilateral trade worth $11.8 billion in 2022-23. In the year 2023-24, the bilateral trade stood at $7.89 billion. Over 200 Indian companies are currently operating in Nigeria, with investments totalling around $27 billion across various sectors, including pharmaceuticals, power, and construction. Indian companies are among the largest employers in Nigeria, second only to the federal government. With a keen interest in diversifying investments, potential sectors for further collaboration include power, transportation, infrastructure, maritime, agro-processing, mining, and textiles.

Recent government reforms in Nigeria, including the removal of petrol subsidies and the decontrol of currency exchange rates, signal Abuja’s commitment to economic reform. The Economic Recovery and Growth Plan aims to diversify the economy beyond its oil dependency.
Earlier this year, during the 2nd Session of the India-Nigeria Joint Trade Committee (JTC) held in the Nigerian capital city of Abuja on 29th and 30th April 2024, both countries drew plans to finalise a local currency settlement system agreement soon, to further strengthen bilateral economic ties.

Both sides held a comprehensive dialogue to review the recent developments in bilateral trade and investment ties while acknowledging the vast untapped potential for further expansion.

Several areas of focus have been identified for enhancing bilateral trade and investments, which include resolution of market access issues on both sides and cooperation in sectors like crude oil, natural gas, power, Pharmaceuticals, Unified Payments Interface (UPI), renewable energy, agriculture, food processing, education, transport, railway, aviation and MSMEs.

In terms of defence cooperation, India’s rising economic engagement in Africa is flanked by her extensive military and political engagement in which four distinct elements can be discerned: providing Indian soldiers for United Nations (UN) missions in Africa; training African officers in India; the involvement of the Indian Navy in the Indian Ocean; and the involvement of the Indian defence industry in Africa. The defence relationship between India and Nigeria has historical roots, with India playing a crucial role in establishing the Nigerian Defence Academy and Naval War College. India and Nigeria have cooperated in the defence sector, with India providing training and support to Nigerian forces. Both countries have strengthened their naval cooperation, particularly in the Gulf of Guinea, a region critical for maintaining international trade routes. The Indian Navy Ship (INS) Sumedha made a port call in Lagos, Nigeria, in October 2023, to enhance maritime security and combat piracy. During the visit, representatives from both navies engaged in training activities, professional interactions, and planning conferences to improve interoperability.

The collaboration includes joint exercises, information sharing, and maritime partnership exercises aimed at ensuring the safety of maritime trade routes in the region. This partnership underscores the shared commitment of India and Nigeria to enhancing maritime security and supporting each other’s naval capabilities.
Ongoing military training exchanges and collaborative initiatives under the Indian Technical and Economic Cooperation (ITEC) program, which offers 150 slots annually for Nigerian defence personnel. Amidst rising interest in military hardware, Nigeria is exploring the procurement of helicopters and fighter jets from Indian manufacturers like Hindustan Aeronautics Limited (HAL). These developments align with the broader strategic partnership between the two nations, which has seen Nigeria acquiring defence supplies from India in recent years.

In addition to defence, India and Nigeria are collaborating in the fields of space and cybersecurity. An MoU on space cooperation is set to enhance bilateral ties, with specialized training programs for Nigeria’s National Space Agency scheduled for January 2025. Collaborative efforts will focus on remote sensing, mapping, and satellite development.
Furthermore, a recently signed MoU between the Indian Computer Emergency Response Team (CERT-IN) and Nigeria’s CERT-NG aims to strengthen cybersecurity cooperation.

There is also the imperative of strengthening pharmaceutical collaboration as India’s pharmaceutical sector holds a dominant position in Nigeria, with Indian products accounting for over 70 per cent of the market. Nigeria views India as the “Pharmacy of the World” and is keen to deepen cooperation in this area. Indian investments in pharmaceuticals in Nigeria exceed $4 billion, with initiatives such as the Serum Institute of India’s agreement with Bio Vaccine of Nigeria for local vaccine production.

Discussions are ongoing regarding collaboration in active pharmaceutical ingredients (APIs) and clinical trials, alongside efforts to provide quality generic medicines through the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP). The Nigerian government is also interested in emulating India’s healthcare schemes, such as the COWIN platform and the Ayushman Bharat scheme, with Indian support.

There are also prospects in agricultural cooperation and food security. Agriculture is a cornerstone of Nigeria’s economy, employing roughly 70 per cent of the population and contributing 25.18 per cent to GDP in 2023. Despite having over 70 million hectares of arable land, only about 44 per cent is currently cultivated. There is scope for cooperation in agriculture, with Indian companies already engaged in edible oil plantations and interest in grain farming. Discussions are underway for a Memorandum of Understanding (MoU) focused on agricultural collaboration, which will include food processing, farm machinery, and irrigation techniques to mitigate post-harvest losses.

Education remains a key area of cooperation, with India being a popular destination for Nigerian students. Currently, over 5,000 Nigerian students are enrolled in various courses in India, with approximately 1,300 student visas issued annually. The establishment of two universities in Nigeria with Indian collaboration and ongoing negotiations for an educational cooperation MoU. India has extended several scholarships for Nigerian students, facilitating access to quality education in renowned Indian institutions. This initiative not only promotes cultural exchange but also contributes to skill development in Nigeria.

Overall, not only are Indian actors providing much-needed investment and capital, but India-Nigeria connections represent a further important diversification of Africa’s international relations, something which reflects a major development for the continent.

Indian activity in the broader context of Africa may be said to constitute a middle ground between China’s profit-maximising and largely statist approach and the much-resented intrusive conditionalities associated with Western policies.
Also, oil and gas resources in Nigeria offer energy cooperation possibilities. Nigeria stands as a crude oil powerhouse, generating approximately 90 per cent of its revenue from petroleum and related products. The country boasts proven reserves of about 37.1 billion barrels of light and sweet crude oil, ranking it ninth globally in natural gas reserves with around 209.5 trillion cubic feet. Globally India ranks third importing about 4.6 million barrels per day, largely from the Middle East. A disruption in the supply of oil and gas from this region could, almost immediately, unfold a crippling effect on the Indian economy. Therefore India needs to considerably diversify its supply given the current and enduring political instability of the region. An oil and gas ‘pivot’ towards the resources of sub-Saharan Africa is therefore a necessity. The exploration or purchase of hydrocarbons as well as natural resources offers the possibility of becoming another major pillar of India’s economic engagement in Nigeria.

It is evident that India’s growing activity in Nigeria particularly has the potential to help African companies become more efficient by exposing them to competition, new advances in technology and modern labour skills. Other African governments could potentially use the opportunity of an increased Indian corporate presence in Africa as sources of appropriate technology, skills and advice for economic development.

Vaishali Basu Sharma can be reached via [email protected]