India's western coastline lies at one end of a traditional trade route that links the southern coastline of the Arabian Peninsula and East Africa. Modern Indian industries, both state and private, view East Africa as a natural extension of their domestic business activities. India's large corporate investments into Africa aim to not only secure valuable raw commodities but also to take advantage of cheap labor costs and secure long-term market share within several of the region's rapidly growing economies. Within this Indian focus on the greater Indian Ocean community, Indian economic activity in some sectors of Africa even outpaces that of China, the leader in many African investment and development projects, by total dollar amounts and as a percentage of gross domestic product. Indian investment in Africa focuses on a few key industries: energy resource extraction, manufacturing, financial services, agriculture and infrastructure development. For India's private sector, Africa contains promising opportunities at a time when the cost of labor in India is climbing and government and infrastructure bottlenecks are reducing the ease of doing business. Additionally, coastal African countries are a growing destination market for goods and products manufactured regionally by Indian companies. With growth slowing at home, many private Indian corporations are expected to move offshore, and East Africa and southern Africa provide historical connections and the potential for high economic return. Although China's investment presence in Africa is more widely seen, and China's stronger political cohesion and economic heft can bring more foreign direct investment projects on board, there is still room for India between the Western and Chinese investors pouring into Africa. Local leaders often decry China's investment and development strategy as resembling the exploitative, extractive methods of former colonial powers. India's broader portfolio investments guided by a historical connection to a greater Indian Ocean community, conversely, are an alternative to the Chinese approach.
