Last week, senior Indian diplomat, Dammu Ravi, Secretary (Economic Relations) in the Ministry of External Affairs, paid a pay a visit to Uganda, as part of his three-nation African tour.
Ravi addressed the Uganda-India Business Conclave, which saw a 35-member multi-sectoral business delegation from India traveling to the African country to seeking to expand ties in areas from manufacturing and agriculture to renewable energy, healthcare, and tourism. Expanding ties with Uganda is part of India’s broader strategy in Africa – and it comes at a critical time.
In January this year, Uganda hosted the 19th Non-Aligned Movement (NAM) Summit, followed by the third South Summit and the G77+China Summit. This is indeed an important milestone for the Ugandan President, both diplomatically and politically.
The landlocked country of East Africa, Uganda was recently suspended from the African Growth and Opportunity Act (AGOA) by the United States due to multiple accusations related to human rights violations. This was followed by the freezing of new lending to Uganda by the World Bank.
Given the above, President Yoweri Museveni ensured the guests were impressed during the Summit. In his speech, he pledged to realign the country’s foreign policy to emphasize greater cooperation among the Global South. In its bid to dodge the American economic bullet, Uganda seeks new partnerships beyond China. In India, Museveni may be seeing one.
India, as a founding member of NAM, actively participates in the Summits, and in 1983, hosted the 7th Summit in New Delhi. The fact that Dr S Jaishankar, India’s Minister of External Affairs, represented India at the 19th NAM Summit illustrates India’s support for Uganda.
As a matter of fact, to help Uganda host the Summits, India donated the government of Uganda 10 executive buses, five ambulances, ten tractors, 2,664 flags, and flag poles prior to the event. India may find Uganda to be a credible partner in East Africa. Undoubtedly, the endorsement for Uganda’s 2024–2027 presidency of the NAM grouping is a testament to the country’s leadership and multilateral engagements.
India may find Uganda to be a credible partner in East Africa. Undoubtedly, the endorsement for Uganda’s 2024–2027 presidency of the NAM grouping is a testament to the country’s leadership and multilateral engagements. However, New Delhi is likely to tread carefully in furthering its relations with Kampala given its strong ties with China and recent altercation with the USA.
India’s Relations with Uganda: Past and Present
The relationship between India and Uganda dates back to when Indian sailors traded goods in dhows across the Indian Ocean, long before the Christian era, when European sailors sailed around the world. The word “dhow” in Swahili refers to any pre-European ship found in the Indian Ocean, especially those that originate in India.
After the abolition of slavery in 1834, the British brought with them more than 30,000 Indian ‘coolies’, a racist term for indentured laborers, for the construction of the Uganda Railway. Eventually, a large number of them settled in East Africa and made Uganda their home.
India’s freedom struggle inspired the early Ugandan activists to fight colonization. In 1960, known as the Year of Africa, marked a turning point of African independence with 17 new countries created just that year, and another 18 in the next year.
On 14 December 1960, a “Declaration on the Granting of Independence to Colonial Countries and Peoples” was adopted by the United Nations General Assembly, which proclaimed the necessity to “steadfastly bringing to a speedy and unconditional end the provisions of the Charter and the present colonialism in all its forms and manifestations.”
The matter was initially proposed for inclusion in the agenda of the Assembly’s fifteenth session by the Chairman of the Council of Ministers of the USSR, Nikita Khrushchev, during his address to the General Assembly on 23 September 1960. Uganda became independent on October 9, 1962.
However, in August 1972, Ugandan dictator Idi Amin ordered the country’s entire South Asian population to be expelled, accusing them of sabotaging the economy. Around 50,000 Indians and Persons of Indian Origin (PIOs) along with other Asians had to leave.
Five decades later, in January this year, the President of Uganda Yoweri Museveni called that move a “mistake” and expressed gratitude to the Indian community of Uganda for the service that they rendered over the decades. Indeed, anti-Indian policies were promptly reversed once Museveni assumed office in 1986. Several actions have been taken to guarantee the reinstatement of bilateral relations, including the return of belongings that had been confiscated from Indians and PIOs.
Uganda’s Growing Bonhomie with India
Kampala and New Delhi have significantly deepened trade ties over the past two and a half decades. Since 1995, when the constitution established Uganda as a Republic, India’s trade with Uganda witnessed a sharp rise, almost nine percent annually, and today, it stands at nearly $1.3 billion. Indian exports to Uganda stand at $ 695 million rising from just $ 57.4 million in 1995.
Since 2008, Uganda has been part of India’s Duty-Free Tariff Preference (DFTP) scheme that India offers to almost 35 least-developed Countries. Based on the scheme, 98% of India’s total tariff lines are duty-free. Uganda’s exports to India consisted mainly of coffee, cocoa beans, and dried legumes, while it imported primarily pharmaceutical products, vehicles, plastic, paper and paperboard, and organic chemicals.
India’s Burgeoning Diaspora
Indian Prime Minister Narendra Modi made history in 2018 when he addressed the Ugandan parliament as the first Indian Prime Minister. During the PM’s visit, several agreements were signed, including one that waived the requirement for a visa for official and diplomatic passport holders, established a regional material laboratory in Uganda, and agreed to bilateral defense cooperation.
The PM also announced two Lines of Credit totaling $64 million for the production of dairy and agricultural products as well as $141 million for the construction of electrical lines and substations. Additionally, it was announced that numerous Indian Army training centers would provide additional training to the Uganda People’s Defence Force.
India’s first overseas educational campus was established in Uganda when, in April 2023, National Forensic Sciences University (NFSU) of India inaugurated its campus in Jinja.
Notably, this town, in southern Uganda, on the shore of Lake Victoria, is also the center of the country’s Indian community. In 1997, Prime Minister Inder Kumar Gujral unveiled a bust of Mahatma Gandhi there. Few know that in 1948, a portion of Mahatma Gandhi’s ashes were immersed in the Nile near Jinja.
Today, the Indian diaspora residing in Uganda exhibits the most robust and long-lasting cultural and economic ties towards Uganda. There may only be 20,000 Indians in Uganda, making up less than one percent of the country’s overall population. Yet, they provide about 65% of all national taxes.
Indeed, Indians living in Uganda play a significant role in the Ugandan economy, especially in sectors like manufacturing, trade, agro-processing, banking, sugar, real estate, hotels, tourism, and information technology. They are not only some of the biggest taxpayers in the country but also provide jobs to thousands of Ugandans. Over the last two decades, these PIOs and NRIs have invested more than $1 billion in Uganda.
To further India’s connectivity with Uganda, last year, Ugandan Airlines launched direct flights between Kampala and Mumbai. The service, initially revealed in 2021, is Uganda Airlines’ only second destination outside of Africa.
As a result, Ugandan Airlines joined Tanzania, Kenya, Rwanda, and Ethiopia as the fifth flag carrier to connect their national capitals with India. The airline now operates from Mumbai thrice a week and aspires to expand to include new and important destinations in Delhi and Chennai.
Diplomatic rapprochement
Uganda has vacillated between steady economic growth and authoritarian leadership. President Yoweri Museveni, who has been ruling the country for 35 years, has won another term in 2021 and is set to lead for another five years.
While the country has managed to rebound from the pandemic and marked a 5.3% growth in the 2023 financial year ($114 billion at the end of 2023 in PPP term), the state of its economy looks dire amid mounting debt from China the World Bank and the IMF, including $1 billion Extended Credit Facility (ECF) arrangement for past-pandemic recovery from IMF.
Since Uganda’s severe anti-LGBTQ legislation, its relations with the United States have plummed. To recall, in May 2023, Uganda enacted its contentious Anti-Homosexuality Act, which carries a life sentence or perhaps the death penalty for homosexuality.
Since January 1, 2024, the USA has barred Uganda from benefitting from AGOA as a measure of punishment. AGOA is a preferential trade arrangement that allows member countries duty-free access to the US market for around 6,000 products.
The US decision has created ripple effects for Uganda’s economy, deterring World Bank loans and many Western foreign direct investments. As this economic pushback may potentially increase the inequality in the already volatile nation, the country may eventually lean on economic support from China. In the words of President Museveni, “In case Uganda has no other choice than borrowing, there exists plenty of non-Bretton Woods sources who are eager to lend”.
With huge opportunities available in the Indian market, Uganda can make better use of India’s duty-free tariff scheme, and recover its losses from missing out AGOA. A stronger India-Uganda relations, including bilateral trade and increased investments from India, could deter the country from turning entirely towards China. Currently, India and Uganda are two of the closest allies.
As Uganda retains the Presidency of NAM for the next three years, India can make use of its historic and present relation with Uganda and together, may effectively assume the leadership of the Global South under the banner of NAM.
Indeed, EAM Jaishankar’s second visit in as many years is a powerful sign of growing bonhomie between the two countries and the relevance of one to the other. Therefore, Uganda’s role as a champion and future leader of the Global South will be determined by how well it manages its multi-alignment.
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Publish date : 2024-04-18 07:00:00
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