The Indian government proposes to spend $1-billion between 2012 and 2017 through government-owned fertiliser companies to establish sovereign commitments in the African countries. This includes logistics and infrastructure facilities in African countries like Eritrea, Ethiopia, the Democratic Republic of Congo and Ghana as a precursor to acquiring fertiliser mineral assets in these countries.
Presently, India is fully dependent on imports to meet domestic demand for phosphatic and potassic fertilisers, and imports about 10-million tons a year; of urea. Although several Indian companies operate out of South Africa, Tunisia and Morocco, they have been unable to make any acquisitions of raw material sources; due to a lack of government support. The soft lines of credit were expected to fill this gap.
This investment model, first adopted by China, has proven to be very successful; for investors there. Using this approach, Chinese companies invest heavily in infrastructure and logistics, before gaining concessions for minerals; etc. India sees that it needs to adopt, a similar approach to investing.