Energy Sector Drives Growing EG-India Trade Relations
Trade between Equatorial Guinea and India has grown significantly in recent years. Bilateral trade increased from less than $5 million in 2006-07 to $276 million in 2009-10. The bedrock of these growing commercial ties is the energy sector, which accounted for nearly all of India’s $300 million imports from Equatorial Guinea in 2014. That cooperation will likely be enhanced as the Indian government increases investments in Africa’s oil and gas industry. ONGC Videsh, the foreign investment arm of India’s national oil company, says it will double the $8 billion investment it has made in Africa and is evaluating exploration opportunities in Equatorial Guinea. The company has been looking to acquire oil and gas exploration licenses on the continent in an effort to increase the amount of oil it sources from Africa. India gets 16 percent of its $125 billion in oil imports from Africa and is looking to boost that figure to 25 percent in the short term.
Equatorial Guinea and India have worked to enhance relations in areas beyond the energy sector, but so far efforts have been slow to gain momentum. A $15-million credit line extended by the Export Import Bank of India in 2005 for a potable drinking water project was cancelled in June 2012. About 300 Indian nationals currently work in Equatorial Guinea’s capital of Malabo. Equatorial Guinea has expressed interest in Indian investments, including cooperation in the pharmaceutical and IT sectors. India’s non-oil imports from Equatorial Guinea include oil seeds, medicinal plants, ore, slag and ash, wood and articles of wood, natural or cultured pearls, stones and imitation jewelry. On the other hand, India’s exports to Equatorial Guinea have been relatively negligible, accounting for 0.1 percent of its exports. India’s sales of items such as fish, iron and steel have never exceeded $21 million in a single year.
In 2007, ONGC Videsh was unsuccessful in its attempts to win exploration rights in Equatorial Guinea’s oil and gas bidding round. As the company gives new consideration to Equatorial Guinea’s offshore acreage, perhaps it will be more fortunate the next time. And as Equatorial Guinea’s energy sector cooperation with India grows, it could lay the groundwork for a more productive relationship across the economic spectrum.