India’s Big South Biofuels Strategy: special Biofuels Digest report
India’s shootout with the US over farm subsidies at the recent Doha Round of world trade talks is certain to have consequences for biofuels production and pricing. Although the Indian move was interpreted as protectionism by the US media, in reality it has more to do with the immediate necessity to stem the country’s 12.5 % domestic inflation, and with its longer term strategy of fostering south-south preferential trade relationships with Brazil, South Africa, and its fellow southern members of the “Group of 77” developing nations.
India, Brazil and South Africa are the southern members of the “Outreach 5” group of nations, which are unique in being industrialized candidates for future G8 expansion, and at the same time members of the “Group of 77” developing nations. This “dual citizenship” gives them unparalleled diplomatic access with which to develop alliances and trade agreements.
The “Southern Big 3”, as they are known, are also partners in an agreement to share technological and social innovations. Last year this cooperation progressed to cross-investment when the Government of India took a one third stake in Brazil’s largest ethanol producers to enable them to bring more land under cultivation. India has provided technical assistance to South Africa and Brazil on Jatropha cultivation, and received assistance from Brazil with its ethanol program. India is the world’s second largest producer of sugar cane after Brazil.
Early-on it was evident to Indian planners that a natural synergy existed between India and Africa. India had more than a billion citizens and comparatively little land that could be diverted from food crops, while the population of Africa was small and the climatic belt favorable for cultivation of biofuel feedstocks very large. Moreover, South Africa, through its membership in the African Union and The New Partnership for Africa’s Development (NEPAD), was ideally placed to promote cultivation of Jatropha, Sweet Sorghum and other biofuel feedstocks throughout Sub-Saharan Africa.
India has led the development of south-south alliances both because Indian nationals are exceptionally influential in many international organizations, and because Indian development professionals deliver so much of Africa’s economic and medical assistance on behalf of the Western nations as well as the Indian government. This aid relationship grew exponentially after India’s Ranbaxy Laboratories developed a revolutionary 3-in-one anti-HIV pill and with the help of the Indian government distributed it free to millions of HIV positive Africans who are alive and active today. India also waives import duties on African products, resulting in a steady increase in trade. Although China is also active in Africa, it has concentrated on resource extraction rather than developing the long term partnerships with African nations that ensure India’s continuing influence in the region.
As the southern hemisphere becomes increasingly dominant in biofuels cultivation and production, we will see more of India’s new World Trade Organization.
