India- Mozambique Relations: Surging Ahead

Dr Neha Sinha

Dr Neha Sinha
December 13 , 2018 Views: 5215 Comments: 0

The Republic of Mozambique, located in the south-eastern part of the African continent, has a population of 30 million. The country is surrounded by the Indian Ocean to its east, and has Tanzania, Malawi, Zambia, Zimbabwe, Swaziland and South Africa as neighbours. In 1498, Vasco Da Gama discovered Mozambique, which was later colonised by Portugal in 1505. The country achieved independence in 1975 and diplomatic relations were built between the two countries. Mozambique was under civil coup for sixteen years, yet India was among the first countries to open a diplomatic mission in Maputo, Mozambique, while Mozambique had set up its Mission at New Delhi, India, in the year 2001. To have an economic integration on the African continent, President Nyusi has also signed the Continental Free Trade Agreement (CFTA) at the 10th Extraordinary Session of the African Union Summit in Rwanda this year.

India-Mozambique Relations

Today, the trade between India and Mozambique is about USD 1.5 billion dollars. The export commodities from India comprise of refined petroleum products and pharmaceuticals. The most important export to India from Mozambique comprise coal and cashew. India and Mozambique have also signed several bilateral agreements and Memoranda of Cooperation (MoC) for partnering in different sectors like agriculture, rural development, scientific and technical research, protection of investments, avoidance of double taxation of each other’s nationals, small and medium enterprises, mineral resources, oil and natural gas, defence cooperation, etc. The assistance has been provided through concessional lines of credit (LOCs), implemented through the Export–Import Bank of India (High Commission of India, Maputo, 2017).

Till now, all the four Mozambican Presidents, Samora Machel (1982), Joaquim Chissano (1988 and 2003), Armando Guebuza (2010) and Filipe Nyusi (for India-Africa Forum Summit 2015), have visited India. From India two Prime Ministerial visits have taken place till date. The first visit was when Smt. Indira Gandhi visited Mozambique in 1982 and this was followed by Shri Narendra Modi in July, 2016. On his visit to Mozambique Prime minister Modi signed Memoranda of Understanding (MoU) in the fields of drug trafficking, sports and trading of pulses (High Commission of India, Maputo, 2016). In the recent past, the Indian Minister of State for External Affairs, General (Dr.) V.K. Singh (Retd) visited Mozambique in February 2018 and this visit was reciprocated by the Mozambique Foreign Minister Jose Condungua Antonio Pacheco who visited India from 28^th November to 2^nd December, 2018

It was after President Guebuza's visit in the year 2010 that the LOC-funded projects which were carried out by India were extended from USD 140 million to USD 500 million in Mozambique. Such support has helped Mozambique in improving power generation and distribution, providing drinking water, improving production in agriculture, rehabilitation of irrigation infrastructure, building of an Information Technology Park, etc. (High Commission of India, Maputo, 2017). The most significant form of support extended by India is in the form of scholarships and training opportunities provided to the Mozambican students in India.

Mozambique is a resource-rich nation and there are many Indian companies investing in large amounts. Most of their investment are in the natural gas and coal industries. The two such leading companies are Oil and Natural Gas Corporation Videsh Ltd. (OVL) and Oil India Ltd. In the coal mining sector International Coal Ventures Private Ltd stands as an eminent investor. Also, with our growing engagement with the country, substantial investments have been made with heightened interest in areas like healthcare, education, information technology and pharmaceuticals.

Foreign Minister Antonio Pacheco's Visit to India: Implications

The External Affairs Minister Sushma Swaraj and Mozambique Foreign Minister Jose Condungua Antonio Pacheco met for the Fourth India-Mozambique Joint Commission where leaders discussed in detail steps for strengthening cooperation in commercial, investment, defence, development and social sectors. They also explored means to enhance connectivity between the two countries. Furthermore, they discussed on the growing defence cooperation and boosting security in the Indian Ocean Region (IOR). The two governments also agreed to working together for cooperation in defence and security, judicial and consular systems, traditional medicine, and cultural exchanges. Both nations examined and analysed the importance of working closely to combat issues like smuggling, terrorism, piracy and poaching (MEA, 2018).

During the meet in New Delhi, the Joint Commission on the other hand also revealed their contentment of the increasing trade and investment between India and Mozambique. It was also brought to the forefront that India in the year 2017 was the largest destination for Mozambican exports. It accounted for about 35 percent of its total export revenue. With significant Indian investments in coal and natural gas mining, Mozambique is among the largest destinations for Indian outward investment in Africa. In addition, their discussion centered on ways to accelerate their investment in areas like agriculture, agro-industry, infrastructure, mining, energy, and tourism.

Through LOC and other grant assistance, India has helped in enhancing the capacity of Mozambican institutions in areas like food security, small and medium enterprises, electricity, roads, drinking water availability, solar energy and information technology. A good example of recent progress in implementation of important projects is the Tica-Buzi Highway being funded through an Indian credit-line of about USD 150 million. There are other major LOC projects in areas of electricity and housing (MEA, 2018). Lastly, during the visit an MoU was also signed between the National Archives of India and the National Documentation and Information Center of Mozambique (MEA, 2018). The agreement focused on strengthening cooperation in the field of archival management.

Earlier this year, Antonio Pacheco had also mentioned that China has contributed immensely and significantly in Mozambique and has played a major role in overcoming various difficulties in order to achieve sustainable development. Today, besides having the largest investment in Mozambique, China is also the major trading partner and one of the most important financing sources and builders for infrastructure projects in Mozambique (Xinhua, 2018).

Conclusion

Due to the strategic location of Mozambique and one of the longest coast line in its southern eastern part, Mozambique provides a good opportunity for India to enhance maritime cooperation since the Mozambican navy does not have the capacity to protect its coast. Also, Mozambique may very soon have the have the fourth largest reserves of gas in the world behind Russia, Iran and Qatar. Hence, India’s engagement and investments in Mozambique’s energy sector are also increasing.

There is also a need for greater engagement by establishing direct shipping lines between India and Mozambique, as trade and economic cooperation directly depends on it. Although, in the year 2016, Air Service Agreement was signed between the two countries to promote air connectivity but there has been no discussion on building regular shipping line, which plays a significant role in enhancing our relations with Mozambique.

To conclude, we can see the two nations share common concerns over the issue of safety and security of sea lanes of communication in the Indian Ocean Region (IOR), calling for closer cooperation in the coming years.