A key outcome of the recent visit by the Indian Prime Minister, Narendra Modi, to Nigeria at the invitation of President Bola Tinubu was a commitment by the two leaders to a robust strategic partnership to strengthen ties between both countries in key areas, including economic development, defence, healthcare, and food security. For Nigeria, such a partnership would help actualise the projected $14 billion investment by Indian investors. In this interview with BusinessDay’s John Osadolor and Ojocheneme Onje, Shri Balasubramanian, Indian High Commissioner to Nigeria, further speaks on key areas of bilateral economic relations between the two countries and how Indian companies are deepening investments in Nigeria despite current headwinds. Excerpts:
Read also: Maiden Nigerian Fintech Festival targets innovation to deepen digital payments
Could you talk about the trade relationship between Nigeria and India today?
Our bilateral trade currently stands at approximately $7.95 billion. Nigeria enjoys a trade surplus; it exports oil to India, while India exports a variety of goods. Over the years, India’s exports to Nigeria have been increasing at around 10 percent annually. However, Nigeria still maintains a trade surplus, primarily due to oil exports. In return, India supplies refined oil products such as aviation fuel, kerosene, and other derivatives, as well as pharmaceuticals, textiles, and engineering goods.
Oil is one of the major commodities that Nigeria exports to India, and in 2021-22, our bilateral trade was valued at $14.95 billion. However, in 2022-23, the figure dropped to $11.85 billion and now stands at around $8 billion. This decline can be attributed to changing geopolitical dynamics and the evolving trade requirements and obligations of both countries. In the past, India was one of Nigeria’s largest oil buyers, but now some Western countries have surpassed India in oil purchases, often at different pricing rates. India is always energy-deficient, and we remain eager to source oil from any available supplier. We would welcome an increase in oil imports from Nigeria at any time—whatever quantity Nigeria can provide, India is ready to purchase.
While traditional sectors have seen a decline, both governments have been proactive in fostering new opportunities. For example, we have established the Nigeria-India Business Council and revived the Nigeria-India Chamber of Commerce and Industry. Additionally, the Indian Professionals Forum has been working to strengthen business ties. Various Indian business delegations have visited Nigeria to explore opportunities in sectors such as pharmaceuticals, plastics, engineering, and oil and gas, showcasing India’s technological expertise and trade potential. We are also focusing on emerging areas such as FinTech and technology-based solutions to address existing challenges. On the pharmaceutical front, we have offered training courses and capacity-building programmes to support growth. Both governments are working together to encourage companies from both nations to collaborate and set up institutions that will diversify and increase trade between our countries.
What are the major concerns of Indian investors while doing business in Nigeria, and how are they navigating those challenges?
When businesses evaluate opportunities, they also assess potential risks—not just in terms of security, but also regarding the business environment, ease of operations, and overall market conditions. Over the past four decades, more than 200 Indian companies have operated in Nigeria, and none has left, despite facing challenges along the way.
Indian investments in Nigeria have exceeded $27 billion, spanning various sectors. These include plastics, leather, pharmaceuticals (with $4 billion invested in the pharmaceutical industry alone), and more. Major Indian companies like Indorama (which operates large fertiliser plants) and Olam Group (a key player in agriculture) have a strong presence in Nigeria. While their corporate structures may reflect different headquarters today, these companies are of Indian origin and have made substantial contributions to Nigeria’s economy. I have personally visited the Indorama plant in Eleme, and Olam has a significant agricultural footprint across the country.
“Both governments are working together to encourage companies from both nations to collaborate and set up institutions that will diversify and increase trade between our countries.”
In the pharmaceutical sector, Indian companies have invested $4 billion in production facilities, contributing to the local industry. While some businesses have faced challenges, such as high inflation or currency devaluation, none of the Indian companies have shut down operations. This is a testament to their belief in Nigeria’s economy and its potential. Despite economic difficulties, these companies continue to operate and grow, driven by their confidence in what Nigeria has to offer. However, security is always a key consideration before making any investment. When the security situation requires additional precautions, those costs inevitably are factored into the overall investment. If security concerns didn’t necessitate extra spending, those funds could be allocated elsewhere, reducing the overall investment cost. While I haven’t heard anyone specifically complain about this, businesses are always cautious and prudent. They approach opportunities with care, looking to engage thoughtfully while assessing risks. Let’s explore this further.
Read also: Mastercard, Onafriq collaborate to improve digital payments for SMEs
Is India helping Nigeria tackle its security challenges?
As I mentioned, capacity building has been one of India’s strengths. Since 1979, we have been offering nearly 500 scholarships annually to individuals in the Nigerian government, both civilian and defence personnel, to enhance their skills.
In the defence sector, we have focused on areas like counter-terrorism and counter-insurgency. We have sent Indian experts to Nigeria to train the armed forces in these areas. Additionally, each year, we send about 150 military officers of various ranks to India for specialised courses that cover counterinsurgency, tackling terrorism, and other relevant topics. Capacity building, especially in the security sector, is a significant area of cooperation between India and Nigeria.
Is any new market or opportunity being explored for growth?
Cooperation between India and Nigeria is thriving in several key sectors, including agriculture, mining, FinTech, and technology-based industries. These areas offer significant potential for mutual growth, and we are actively encouraging businesses to explore opportunities. For instance, African Industries in Kaduna operates a fully integrated process, from mining iron ore to producing iron pellets. The company has introduced state-of-the-art equipment and technology, which has greatly benefited the local economy. Thanks to this integration, Nigeria no longer needs to import iron sheets or iron-based products for construction. There are over 12 Indian companies in Nigeria using foundries to recycle scrap metal into iron, with African Industries taking it a step further by processing the ore directly.
Additionally, another major Indian company is looking into setting up a large-scale iron ore mining and steel manufacturing facility in Akwa Ibom. Agriculture is also a growing focus, with Indian businesses exploring large-scale palm plantations and sugarcane cultivation in Nigeria. Similarly, there is interest in growing millets and expanding the agricultural equipment market. India offers some of the best and most affordable agricultural machinery, perfectly suited for Nigeria’s climate, smallholder farming, and irrigation needs.
On the FinTech front, India has developed the Unified Payments Interface (UPI), a mobile-based transaction system that has revolutionised digital payments. Much like Nigeria’s Flutterwave and Opay, UPI facilitates transactions on a massive scale. Just two months ago, India saw 3,719 transactions per second, and 46 percent of the world’s mobile transactions now occur through UPI. We are working to introduce this technology in Nigeria to further enhance digital payments. Other areas of collaboration include artificial intelligence, computer training, and technical cooperation, all of which are poised to benefit both countries significantly.
We are exploring several areas as potential future expansions for our trade and economic relations, including the space sector. There is an MOU between the Indian Space Research Organization (ISRO) and Nigeria’s National Space Research and Development Agency (NASRDA). As part of this collaboration, we are organising specialised training exclusively for NASRDA in India, scheduled for January. This training will focus on areas such as satellite manufacturing, launches, and other related fields, although these projects are still in the early stages. Our cooperation with NASRDA is just beginning, but it holds great promise for transforming the future trade and investment relationship between our two countries.
The creative industry, particularly in software, is an area where India plays a significant role. If you look at any Hollywood movie or films with special effects, the software behind them is often developed in India or by Indians. We are currently working with the Ministry of Culture and will soon be hosting the World Audio-Visual and Entertainment Summit in India. We’ve invited key Nigerian stakeholders involved in this sector to participate. At the Zuma International Film Festival in December, the focus will be on software and technological development in the creative industry. We are bringing experts from India to collaborate in this space, and there is immense potential for cooperation between our two countries in this sector.
Additionally, the creative industry in India, particularly Bollywood, is a massive contributor to employment, providing millions of jobs. India produces the largest number of films in the world, with Bollywood being the second-largest film industry globally. The job opportunities this sector creates are vast, and the potential for further collaboration and growth between India and Nigeria remains largely untapped.
Read also: ‘The future for Africa lies in mobile money and digital payments’ -Abhinav Nehra
I wouldn’t want to jump the gun, but I can confirm that there is a substantial multi-billion-dollar investment coming. The timeline for the project will depend on various factors, including land availability, access to gas and iron ore, and transportation logistics. Negotiations are underway, and they are progressing earnestly. I am confident that the Indian company is highly interested, and I believe the Nigerian side shares that eagerness to finalise the deal as soon as possible. The project involves the Jindal Group from India, though I am not directly involved in the negotiations. However, I am aware that these discussions are taking place, and we are closely monitoring the developments.
Do you see competition or potential threats to Indian investments from countries like China?
Indian investments and companies are increasingly focused on new sectors such as FinTech, agriculture, mining, and the oil sector. We are eager to collaborate with Nigerian authorities to further diversify our manufacturing sector. Many Indian companies are already involved in fast-moving consumer goods (FMCG) activities in Nigeria. I’ve visited several of these companies and seen employees who have been working for generations, highlighting the long-term commitment and strong ties between our businesses and Nigeria.
The hallmark of Indian companies is a hands-on approach: rolling up our sleeves, getting to work, and making a positive impact on the Nigerian economy. Over the past two years, the number of Indian companies in Nigeria has grown significantly. When I arrived, there were about 155 Indian companies operating here. Today, that number has increased to 200, reflecting the growing confidence in Nigeria’s potential. This underscores that Indian companies are committed to the Nigerian economy and see the vast opportunities for doing business here.
How will Dangote refinery operations affect Nigeria’s refined petroleum products imports from India as well as trade between the two countries?
Every country goes through a process of development. When we gained independence in 1947, India’s economy was far from strong. We sought assistance from friends around the world to help us build our economy. Over time, we steadily grew, and today we are the fifth-largest economy in the world. This achievement wasn’t accomplished in just five or ten years; it took about 50 to 60 years of concentrated effort and development. We are pleased to see Nigeria following a similar path of growth, expanding its influence in various sectors.
The Dangote Refinery is a significant milestone for Nigeria, and I’m proud to highlight the Indian contribution to this project. The EPC contractor was Engineers India Limited, one of India’s top companies, which helped set up the refinery with excellence. Additionally, about 2,000 Indian construction workers were involved, contributing to the success of this major venture. Trade between countries is always evolving. Today, the focus may be on a particular sector, but tomorrow it could shift to entirely different areas. As we’ve discussed, sectors like FinTech, mining, and agriculture will be central to future cooperation. While the specific components of trade may change based on the needs of each country, the underlying concept of trade and friendship between India and Nigeria remains steadfast. On this foundation, we will continue to expand trade across different sectors.
India has diverse religions and tribes like Nigeria. How are you able to manage this without a crisis?
Religion is ultimately a reflection of an individual’s faith and personal beliefs, which in India is considered to be a private matter. India and Nigeria share many similarities. Both countries are multi-ethnic, multi-linguistic, multicultural, and multi-tribal, with large populations spread across vast geographical areas. Nigeria has 220 million people, the largest in Africa, while India has 1.45 billion, the largest in the world. In both countries, the concept of national identity—whether it is Indianness or Nigerianess—permeates society, transcending caste, creed, and religious affiliation. While challenges inevitably arise, they are typically issues of law and order, not religious conflict.
When 1.4 billion people live together day in and day out, disagreements or tensions may occur, but they are addressed through established legal mechanisms and institutions. These challenges do not escalate into religious strife. Those who make mistakes are dealt with according to the law, ensuring that issues are resolved within the framework of justice, rather than turning into religious or communal conflicts.
