THE NIGERIA AND INDIA TRADE AND OTHERS RELATIONSHIP
The establishment of the Diplomatic House in Nigeria in 1958 (two years prior to Nigerian independence) by India laid the foundation for what was to become solid, warm and concrete bilateral relations between India and Nigeria. The subsequent diplomatic and commercial visits between officials of the two countries crystallised and concretised their cooperative ties regarding political, economic and socio-cultural issues. This paper examines the politico-diplomatic, socio-cultural and economic relations between India and Nigeria. Using a historical approach, the paper argues that although in economic terms the balance of trade is in favour of Nigeria due to increasing importation of Nigeria’s crude oil into India, Indian investment activities in Nigeria have exemplified what might be termed an unequal relationship in which India has an edge over Nigeria. Nevertheless, in view of the magnitude of the cordial relations between the two countries, their development potentials and some socio-political and cultural commonalities, they stand a very good chance of further solidifying and enriching their interactions with regard to several important issues, such as the development of democratic institutions and the redefinition of economic relations between the two states. This, the paper argues, would not only strengthen their political and economic relations, but also bring mutual benefits.
1.1 Background of the Study
The bilateral relations between the Republic of India and the Federal Republic of Nigeria have considerably expanded in recent years with both nations building strategic and commercial ties. Oil-rich Nigeria stated recently that India has replaced the United States as its largest crude importer 20 – 25 percent of India’s domestic oil demand. India, however, now purchases some 30% of Nigeria’s daily crude production which currently hovers around 2.5 million barrels. With bilateral oil trade valued at US$10 billion, Indian oil companies are also involved in oil drilling operations in Nigeria and have plans to set up refineries there.
Trade between Nigeria and India nowadays is strategically becoming important and of global considerations because of the increasing need of Nigeria’s crude oil by India and India’s pharmaceutical products by Nigeria. This has significantly boomed bilateral trade relations between Nigeria and India and again expected to further and enhance trade relations between the two countries. Nigeria is now the largest trading partner of India in the whole African continent, because it is the largest market for India’s exports and India also is Nigeria’s second largest trading partner in the whole world (Kabiru & Dilfraz, 2014). The Nigeria’s exports is mostly covered by crude oil which constitutes 95% of the total exports of the country, out of which India patronized 11% of these crude oil exports (Rupa, Saikat, & Aayush, 2010). In addition there are so many agreements that are still been put in place in order to increase supply of crude oil to India from Nigeria in order to help India meet its energy security (requirements). In 2000 there was an agreement between India and Nigeria as per the content of the agreement, Nigeria will be supplying crude oil to India at the rate of 1 20,000 barrels per day and hydro-carbon of 6 MT (Harshe, 2002). In addition to this Nigeria exports cotton, wood, cashew nuts, gum Arabic, pearls, rubber to India while India’s exports to Nigeria is made up of Pharmaceuticals and drugs, wood products, transport equipment, textiles materials, chemicals, plastic and machineries. Trade between Nigeria and India have since 1999 been increasing with trade balance in recent years been in favour of Nigeria (Sulaiman, 2009). Presently now the nature of Nigeria and India trade relation is dominated by commodity trade. India as a country with the growing service sector will now look for other areas to trade with Nigeria in order to boost their trade relation, and help India narrow the current trade imbalance/deficit with Nigeria. (Rupa, Saikat, & Aayush, 2010), have identified the service sectors in Nigeria that requires immediate Foreign Direct Investment (FDI) attention, these are Oilfield services, Health care, Information technology, and Agro based. These sectors of the Nigerian economyif properly look into with huge amount of investment by India as one of the worlds leading service provider will help India in narrowing it trade deficit or imbalance with Nigeria. The rationale behind this study is to establish trade complementarily and similarities between Nigeria and India in order to explore, establish and investigate the commodities of their trade having comparative advantage and those having comparative disadvantage. The study of Nigeria and India trade complementarily and similarities is very much important because of the just recent booming commodity trade between the two countries. Over the last one and half decade the trends in Nigeria and India trade for both import and export has risen which again necessitate the rise in their total trade, and with increased in the number of group of commodities that are being traded between the two nations, the intensity of their trade has become very much significant, as their import, export and total trade intensities are found to be high in these days (Kabiru & Dilfraz, 2014). As a result of the recent rise in India and Nigeria trade with accompanying increase in the number of commodities or sectors traded and the high trade intensity the study centred on exploring complementarily and similarities of trade among them.
1.2 Objective of the Study
1. To examine the trade relationship and other relation between Nigeria and India.
2. To examine the relationship between International Trade and Economic Development.
3. To evaluate the disadvantages of International Trade.
4. To study the importance of International Trade in the World.
1.3 Significance of Study
The study reviews bilateral trade relation and other relation between Nigeria and India and how it led to improved and economic growth of the both country. However this study will contribute to the growing body of knowledge in globalization and its linkage with trade policy and will therefore aid researchers who might want to carry out research in related areas.
1.4 Scope and Limitation
The study examines the linkage between Nigeria and India trade relationship It is also limited in part to the information available from books, journals, books and internet resources.