19

INDIA AND MOZAMBIQUE: EXPANDING RELATIONS ACROSS INDIAN OCEAN

Mohammed Khalid* India stood for the independence of the countries like Mozambique and Tanzania among others throughout 1970s and 1980s. It is designed to promote economic cooperation, engage the Indian Diaspora strongly present in these countries, combat terrorism and sea piracy, assist the build up of their defence forces and promote cooperation in the Indian Ocean. Geographically crowning the Indian Ocean realm, mounted by recent industrial and technological development, India is expanding its pangs around. Indian Ocean region has come out to be the natural sphere of Indias foreign policy in the 21st century. The present essay is an attempt to dig out the expanse and level of cooperation with Mozambique-a poor but geopolitically important country on the African littoral of the Indian Ocean.

Relationship between India and eastern coast of Africa can be tracked back to centuries when migrations and trade from Indias western coast began to the coastal land of Africa. When colonialism encompassed India and Africa, the colonial powers created their own trade networks across the Indian Ocean. But at the same time the relationship continued to grow between the two peoples of India and Mozambique. As anti-colonial struggles dawned on Africa in the 1950s and 1960s, India unfailingly showed a great emotional and political solidarity with the countries of that continent. India stood also for the independence of the countries like Mozambique and Tanzania among others, throughout 1970s and 1980s. During the Cold War India convinced and roped in many of these countries to Non-alignment and Afro-Asian solidarity as a viable and fruitful way to promote economic cooperation with them. After the end colonialism and institutionalised racialism in the African continent and the demise of erstwhile USSR, India refurbished its Africa policy. It was
*Department of Evening Studies, Panjab University, Chandigarh

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20
designed to promote economic cooperation, engage the Indian Diaspora strongly present in these countries, combat terrorism and sea piracy, assist the build up of their defence forces and promote cooperation in the Indian Ocean. Emergence of this new partnership has strengthened bilateral relations and created tremendous goodwill for India. Geographically crowning the Indian Ocean realm, mounted by recent industrial and technological development, India is expanding its pangs around. The Ocean rim has come out to be the natural sphere of Indias foreign policy in the 21st century. Indian state and its corporate sector is showing increasing presence in different parts of the Ocean littoral and looking for further avenues to develop multifaceted and multi-level cooperation with them. The present essay is an attempt to dig out the expanse and level of cooperation with Mozambique a poor but geopolitically important country on the African littoral of the Indian Ocean. Mozambique: a profile

Previously known as Portuguese East Africa, Republic of Mozambique (Portuguese-Repblica de Moambique), having an area of 801,590 sq km is situated in southeastern Africa. The country has a coastline of 2,470 km in the Indian Ocean to its east. Mozambiques border to the north runs with Tanzania for 756 km; to the northwest with Malawi for 1,569 km and Zambia 419 km; to the west with Zimbabwe for 1,231 km; to the southwest with Swaziland 105 km and South Africa 491 km. Its maritime seas extend for 12 nautical miles (22 km) and exclusive economic zone up to 200 nautical miles (370 km.). About 1,600 km adjoining sea in Mozambique Channel is an important shipping route round the southern tip of Africa in the Indian Ocean.1 Mozambique has tremendous geopolitical importance which transcends its geographic position. Its long coastline and three major ports of Maputo, Beira, and Nacala are all ideally suited for naval bases and have long been coveted by the great powers. These ports, from which a great power could interdict, or at least disrupt, Indian Ocean commerce and alter the balance of power in Southern Africa, also offer international gateways to the landlocked countries of the region. These ports can significantly facilitate Africas integration into the global economy and help to expand the Continents access to markets in the Indian Ocean and Southeast Asia. This geopolitical importance is vital in the current

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21 posturing of the world economy where Africa is seeking to consolidate its position. Mozambiques strategic position is crucial to the countries of Southern African Development Community (SADC) --which includes 14 countries of South Africa and Island states of Mauritius and Seychelles etc. Landlocked states of Zimbabwe, Malawi and Zambia that border Mozambique are aware of the importance of the country as its harbours in Beira, Inhambane, Maputo, Nacala, Pemba, and Quelimane provide access to the sea route for their exports.2 These states as well as the rest of the SADC have a direct concern in political stability of Mozambique. These landlocked neighbours are intimately affected and their political, social and economic survival heavily depends on what happens in Mozambique. After almost five centuries as a Portuguese colony, Mozambique became independent in 1975. On gaining freedom, a large number of white population emigrated from the country. Shortly after independence, it was declared as People's Republic of Mozambique. This was followed by an intense civil war after 1977.3 In 1987 the government embarked on a series of macroeconomic reforms designed to stabilize the economy. The International Monetary Fund (IMF) supported Mozambiques such sustained efforts to adjust its economy to marketisation.4 In 1989 the ruling party --Front for the Liberation of Mozambique (FRELIMO)-- formally abandoned Marxism and embarked upon liberalisation of its economy.5 In 1990 a new constitution was adopted, which provided for multiparty elections and economic reforms. United Nation negotiated a peace agreement between FRELIMO and rebel Mozambique National Resistance (RENAMO) forces, thereby ending the violence in 1992. With the end of Communism, Mozambique painstakingly, but gradually, transformed itself from one party state to a democratic system and from planned economy to liberal market mechanisms. As a result, economic growth climbed from an average of 6.7% to 10% between 1996 and 1998 on an average of 8% between 1996 and 2006. Through the adoption of a prudent fiscal and monetary policy, inflation was reduced from 50% in 1995 to less than one percent in 1998.6 Since then the government has managed to maintain these levels and keep to its inflation target rate of less than 5.5%. The devastating floods of early 2000 slowed GDP growth to 2.1% but the growth recovered to reach the mark

21

22 of 14.8% in 2001. In 2003, the growth rate was 7%. The government projects the economy to continue to expand between 7%-10% a year for the next five years. Government introduced a value-added tax and reformed customs service which improved the government's revenue collection. More than 1,200 state-owned enterprises (mostly small) were privatised. Many more of the remaining parastatal enterprises, including telecommunications, energy, ports, and railways are in the process of privatization.7 However, economic expansion in the future hinges on several more economic reforms, and the revival of the agriculture, transportation, tourism sectors and foreign investment. Mozambique has already embarked on a campaign to encourage Foreign Direct Investment by establishing legal and institutional frameworks. In spite of these gains, Mozambique remains dependent upon foreign assistance for much of its annual budget, and the majority of the population remains below the poverty line. Mozambique is generally considered an aid success story. The IMF in early 2007 called Mozambique is a success story in Sub-Saharan Africa. Countrys once substantial foreign debt has been reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level.8 Yet, both the World Bank and UNICEF called it a paradox to describe rising chronic child malnutrition in the face of GDP.9 Subsistence agriculture continues to employ the vast majority of the country's workforce. A substantial trade imbalance persists although the opening of the MOZAL aluminum smelter, the country's largest foreign investment project to date has increased export earnings. Mozambique had a population of 21 million in 2008 with about 23.8% Catholic, 17.5% Zionist Christian, and 17.8% Muslim, among others. With about 70% population living below poverty line as per 2001 estimates, the country had literacy rate of 47.8% (male: 63.5% female: 32.7%) in 2003.10 The country is among the worst ranked in life expectancy and infant mortality rates. Its Human Development Index is one of the lowest on earth. Mozambique had an estimated GDP (purchasing power parity) of US$23.38 billion in 2004 with real growth rate of 8.2%. Per capita GDP was estimated at $1,200 in
the same year.11 The fertility rate is at about 5.5 births per woman. In 2004, Public expenditure on

health

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23 was at 2.7 % of the GDP whereas private expenditure on health was at 1.3 %. Health expenditure per capita was US$ 42 in 2004. In the first decade of the 21 st century, there were 3 physicians per 100,000 persons in the country. Infant mortality was at 100 per 1,000 births in 2005. HIV prevalence among 15 to 49 year olds exceeds 10 %.12 Mozambiques economy is predominantly agricultural. Around 83 per cent (8 1% according to some estimats) of the labour force is engaged in agriculture and it contributes 21.1% of the GDP (34 % including allied sectors). Only about 6 per cent of the total land area is cultivated. The main cash crops include cashew nuts, sugar cane, cotton, copra, and tea. Basic food crops are maize, cassava, wheat, peanuts, cashew nuts, potatoes, rice, and beans. Cattle, goats, sheep, pigs, and poultry are also raised. About 98.9 percent of the rural poor in Mozambique own land, with an average of 2.5 hectares per household. Many small holder farmers can only produce enough for subsistence only.13 Forests cover about 25 per cent of the land area still there is hardly any commercial forestry and most of the 18 million cu mt of wood cut in 2004 was used for fuel. Food-processing, cotton-ginning, and the manufacture of steel, machinery, refined petroleum, clothing, and textiles are principal industries in Mozambique. Food, beverages, and tobacco processing account for 62% of all manufacturing. Locally produced raw materials, such as sugar, cashews, tea, and wheat are processed. Brewing, production of textiles, cement and fertilizeras well as manufacturing of agricultural implement was started in the 1980s. Apart from this glass, soaps, oils, ceramics, paper, tires, railway equipment, radio, bicycles, and matches are produced in the country. There are only 11 large state-owned companies, which include national airlines, telephone, electricity, insurance, oil and gas exploration, port and rail, airports, water supply, and fuel distribution. A large aluminium plant which is a joint overseas investment venture, opened in September 2000. Vvirtually all manufacturing is located in the major urban areas of Maputo, Beira, and Nampula. Industry contributed 30.9% to countrys GDP and employed only 6% of the labour force.14 Service sector, the most valuable area of economic activity, contributed 45.6 percent to the GDP in 2008. About 13 percent of the labour force was engaged in the service sector according to 1998 estimates.15

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24 The largest contributor to the service sector is business, which alone constituted 19.5 percent of GDP in 1999. The business class consists of small elite which is engaged in business activities are trading and distribution. Other important service activities include finance, transport, communication, and retail. Tourism is a relatively marginal component of the countrys economy. Restaurants and hotels accounted for a meager 1.2 percent of GDP in 1999. There is a strong potential for the development of the tourism sector, given the country's long coastline with superb beaches, the existence of several attractions of historical interest and the great diversity of flora and wildlife. Mozambique has substantial and valuable mineral resources. It has world's largest reserve of columbotantalite, which is used to make nuclear reactors and aircraft and missile parts. It is located in Zambezia Province in central Mozambique. The country is the second most important producer of beryllium, another highly desired strategic mineral. Long and violent civil war however prevented the exploration and development of these resources. Other resources include large deposits of coal, iron, and salt. Diamonds, asbestos, mineral sands, and bauxite are also found. There are small deposits of copper, gold, manganese, titanium, and offshore natural gas.16 It has started a US$700 million project to expand natural gas fields at Pande in 1995. After independence Mozambique's foreign policy has primarily focused on maintenance of good relations with its neighbours and expansion of ties with donor countries or those countries that supported countrys liberation struggle. India is one of such countries. During the 1970s and early 1980s, Mozambique's foreign policy was inextricably linked to the struggle for majority rule in Rhodesia and South Africa. 17 Mozambique enforced UN sanctions against Rhodesia and deny that country access to the sea. In retaliation, Ian Smith's regime of Rhodesia, undertook overt and covert actions to destabilize Mozambique. Thus it started sponsoring the rebel group RENAMO. Even the apartheid regime in South Africa continued to finance the destabilization of Mozambique during 1980s.18 After the end of apartheid, Mozambique established diplomatic relations with South Africa, in October 1993. At times it had strained relations with neighboring Zimbabwe, Malawi, Zambia, and Tanzania but overall Mozambique's ties to these countries
remain strong. In the years immediately following its independence, Mozambique benefited

from

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25 considerable assistance from some western countries, notably the Scandinavians. Besides, Moscow and its allies became Mozambique's primary economic, military, and political supporters. Her foreign policy reflected this linkage as well.19 Mozambique opted to be non-aligned and acted as moderate member of the African Bloc in the United Nations and other international organizations. Mozambique also belongs to the Organization of African Unity/African Union and the Southern African Development Community (SADC). In 1994, the country became a full member of the Organization of the Islamic Conference. Thus the country succeeded in part to broadening its base of international support and appeasing its sizeable Muslim population at the same time. Similarly in early 1996, Mozambique joined its Anglophone neighbours in the Commonwealth. In the same year, Mozambique became a founding member and the first President of the Community of Portuguese Language Countries (CPLP) and maintains close ties with other Lusophone states. Indians in Mozambique The area where Mozambique is situated was explored by Vasco da Gama in 1498. The Portuguese gained control of the Island of Mozambique and the port city of Sofala in 1505. By 1530s small groups of Portuguese traders and prospectors penetrated the interior of its land. When Vasco da Gama paid the first visit to ports of Mozambique in 1499, he had found Indian traders there. This proves that Indian traders and merchants had been coming to this land even before Vasco da Gama set his sails for Africa and India. It is a documented fact that India had links with Mozambique for half a millennia as traders from south India had been going to this land.20 Muslim traders from India's Malabar region regularly plied the trade routes of the Indian Ocean that brought them up and down the eastern coast of Africa long before the arrival of the Portuguese. In the seventeenth century, Indian merchants had a considerable presence in finance and maritime trade of the western Indian Ocean. These merchants gained prominence by exploiting new opportunities in the region. They became connected to larger firms and corporations in Gujarat and Maharashtra and created networks extending up to Muscat and the Swahili coast.21 In the ports of the Mozambique Channel they were especially noteworthy at Mozambique Island, Inhambane, and Mahajanga. In the late 1750s, Muslim traders had established religious schools for local Africans 25

26 at Inhambane. By the 1800s, Vania (Bania) merchants from Diu had settled on the Island of Mozambique. Indian Muslim traders also established an Islamic network across the Mozambique Channel in the nineteenth century. In cooperation with Portuguese shippers, they were active in the trans-Atlantic slave trade. Muslim traders from the state of Kutch in close alliance with the Sultan of Oman had expanded their activities in East Africa in 1840, when the Sultanate relocated its seat of government to Zanzibar. From slave trade they later shifted towards ivory and cashew nuts under pressure from the British.22 Presence of Indians in Mozambique since half of the 19th century is closely linked to the socio-economic and political transformations of the Swahili coast. Many Guajarati traders began to flow into Mozambique from South Africa in the latter half of the 19th century. Several petty traders or employees of the large Indian trading firms also migrated to Mozambique. However, in 1899 plague broke out in the country for which Indians were blamed. As a result, migration of all Asians was officially stopped. Even after the relaxation of the restriction in 1907, Asians who sought to migrate to the Mozambique had to pay a heavy disembarkation fee at their port of arrival. Meanwhile, due to intensification of freedom movement in India, in the post-1911 period, the British became more hostile to Indians in South Africa. This caused more and more Gujaratis, who had originally intended to settle in South Africa, to divert north to Mozambique, especially in the area around Delagoa Bay.23 Even during Great Depression that set in during 1930s, Indians trading in cashew nut continued to excel in business as Depression did not hit cashew nut prices. Migration of Indians was again restricted by the Portuguese government who not only barred further immigration, but also prevented the return of Indian residents of Mozambique, who were outside the country at the time of announcement of the new migration regulations. This produced a significant change in settlement patterns and many Indians who previously came alone leaving their families in India now started bringing their wives and children over to Mozambique. To put restriction on immigration the Portuguese introduced racial quotas so that more Portuguese get employed and less Indians migrate to this land. Indians, however, survived this quota system and went on trading and settling in the country. During the Second World War, because of its

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27 declared neutrality, Portuguese ships were not targeted by the Allied as well as Axis powers. This helped Indian traders to continue their business. In 1948, Protuguese government re-defined its racial quota system but it could not prevent Indian population to prosper. The 1950s saw further rise in cashew nut prices, so Indian firms continued to earn more. By the end of the decade, 12,000 Indians were living in the country.24 Early in 1947, when India got independence and Pakistan came into being after partitioning of the subcontinent, many Indians (Hindus, as well as some of the Muslims) chose Indian citizenship and some (especially Muslims) chose for Pakistani nationality. Some of the larger traders took advantage of the situation and opted for British nationality. Many others registered their Mozambque-born children as Portuguese citizens. In response to the liberation of Goa by the Indian armed forces in 1961, the Portuguese put all the Indian nationals in Mozambique in concentration camps for six months. Their bank accounts were frozen and properties confiscated. Many were even repatriated to India. Ostensibly this was done for the protection of these Indians. However, in reality the Portuguese hoped to use their freedom as a bargaining chip in exchange for the freedom of 3,200 Portuguese who had been captured in Goa. Besides other effects, this led many of the Muslims who had initially chosen Indian nationality to switch their allegiance to Pakistan. Even after the cessation of hostilities in Goa, Indian nationals in Mozambique continued to face restrictions by the colonial government. Some chose to resettle in other countries in east Africa. Later, in the 1970s, as the process of decolonisation began and Portuguese rule drew near, South Asians began leaving the country in larger numbers; the outflow was especially significant among Ismailis, who were urged to leave the country by the Aga Khan IV. Some returned to Pakistan or India, while others re-established themselves in Portugal.25 In contrast, large proportions of Indians stayed in Mozambique after independence and form the sixth-largest Diasporas community in Africa. Roughly 20,000 people of Indian descent as well as about 1000 Indian expatriates reside in Mozambique. During the early days of independence Mozambique had a socialist regime. Due to this, Indian community, which is mostly engaged in trading, faced many difficulties. However, after return of peace in 1992 and liberalization of economy, the Indian community started flourishing

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28 again. About 40% of retail trade in the country is in the hands of persons of Indian origin. Many Indian experts are working in different fields in Mozambique. Besides commercial and economic activities, few of them have also held posts of Members of Parliament and Governors of the Provinces.26 At present Abdul Razak Noor Mohomed is Deputy Minister Mineral Resources. The Indian community in Mozambique is mainly grouped under the Comunidade Hindu (Hindu Community) and the Comunidade Mohametana (Muslim Community). Both these associations have been set up with elected members from the community and celebrate all the major Indian festivals apart from organising various other cultural programmes.27 On June 27, 2001 the Indians launched Indian Professional and Business Council, Maputo with an objective to project a positive image of the Indian community in Mozambique by highlighting important contributions made by Indian professionals and projecting a clear perspective of India, its achievements, successes, potentials, and relevance to Mozambique. It was also to encourage more frequent business and social links, share knowledge and experience between Mozambican and the Indian professionals and to increase Indian communitys greater participation in the economic development of the country. India-Mozambique relations Friendly relations built over the last few centuries have grown over the years as a result of which India and Mozambique today find many common areas to cooperate. India had consistently lent its support to Mozambique in the latters freedom struggle. On its independence in 1975, India established diplomatic relations becoming one of the first countries to open its Embassy in Mozambique. The latter opened its Mission in New Delhi in the first week of December, 2001 and its first High Commissioner to Delhi was appointed towards the end of March 2002.28 Mozambiques first President Samora Machel paid a visit to India in 1982, which was reciprocated by Prime Minister Indira Gandhi in the same year. India has assisted Mozambique through five Line of Credits (LOCs) totaling US$ 115 million for rural electrification in provinces of Zambezia, Inhambane, Nampula and Gaza to finance transfer of water drilling technology and equipment from India as well as for

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29 establishment of IT Park in Mozambique.29 High point in Indo-Mozambican relations came when President Alberto Chissano came to India during 10-15 May, 2003, heading a high power ministerial delegation. During the visit, Government of India decided to write off debts to the tune of Rs. 90 million, owed on LoCs granted in 1981 and 1982. Government of India through HMT (I) Ltd. offered to set up a Cashew Processing Plant in Mozambique out of the annual grant of US$ 200,000. Process of its implementation has already begun. India gave an assistance package of US$333,000 to develop Youth Centre with special emphasis on sports (especially football, in the backdrop of World Cup in South Africa in 2010). It also provided an emergency assistance of about US$ 256,000 towards relief supplies to the victims of floods in Mozambique in 2008. Two Hole in the wall education projects, in Macuba in Zambezia Province and Chibuto in Gaza Province, to the tune of US$75000 were installed by Government of India in 2007. Friendly relationship has continued to grow further through regular exchange of Ministerial visits between the two countries in recent times. During 2009 many of the Mozambican ministers visited India to develop cooperation in different fields.30 Similarly, some of the Indian Ministers paid visit to Mozambique during recent years. 31 Under Indian Technical and Economic Cooperation (ITEC) programme, training slots for Mozambique have been increased from 20 to 30 since 2008-09. In addition, 15 scholarships are provided under ICCR (Indian Council for Cultural relations) General Cultural Scholarship Scheme (GCSS) every year. Government of India has deputed an Expert to the Mozambican Ministry of Science and Technology as consultant in the field of statistics and management since July, 2007.32 When president of Mozambique visited India in 2007, India and Mozambique signed MOU in the field of agriculture and Bilateral Inter-governmental Science & Technology Agreement. Trade and investment Mozambique has a substantial trade deficit. In 2003, imports accounted for $1.24 billion while exports for $910 million. In the recent years the country has got support provided by foreign donors and has set up mega-projects through foreign direct investments, which have largely compensated for balance-of-payments shortfalls. Aluminum smelter

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30 MOZAL that commenced production in mid-2000, has greatly expanded the nation's trade volume.33 Its principal export commodities include aluminum, electricity power, natural gas, tobacco, prawns, timber, cashews, shrimp, fish, copra, sugar, cotton, tea, and citrus fruits. Mozambique imports machinery, diesel, vehicles, cereals and electricity power.34 India has a fair share of trade with Mozambique and exports drugs and pharmaceutical, hospital supplies, transport equipment, rice, cotton including accessories, cotton yarn/fabrics and linoleum. India imports cashew nuts, wasted melted iron, green beans/peas, oil seeds and powdered scale aluminum from Mozambique. Indias trade as per Mozambique government statistics is shown in the table below.35 Table-1 Mozambiques Foreign Trade and imports from and exports to India (In million US$) Year Imports 2007 2006 Total Imports 3049.748 2807.595 Total from India 2412.120 2370.998 Table-2 Major items of exports to and imports from India for 2007 S. No. 1. 2. 3. 4. 5. 6. Exports to India Aluminium ingots Raw and waste cotton Timber logs Oil Seeds Transport equipment Raw cashew nuts Value in Million US$ 2.027 0.337 0.122 0.116 0.085 0.048 Imports from India Medicines Bulk Rice Bicycles and motor cycles Petroleum products (Bitumen) Special vehicles Primary and semifinished iron and metal Value in Million US$ 25.970 25.473 10.273 6.164 3.817 3.601 Import from Export India 135.858 16.717 78.246 26.003

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31
Mt

Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

49,748(2007)

Exporting Country

Value in US$

% of Total Import 61.84 17.18 2.95 1.67 1.54 1.32 1.30 1.22 0.69 0.66

Netherlands South Africa Zimbabwe China Spain UK Portugal Kenya India Malawi

1,491,691 414,449 71,110 40,274 37,118 31,849 31,243 29,387 16,717 15,964

Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Importing Country

Value in US$

% of Total Export 33.00 14.69 4.45 3.56 3.51 3.42 3.10 2.74 1.84 1.37

South Africa Netherlands India Portugal China UAE Japan USA Thailand Pakistan

1,001,761 448,066 135,858 108,682 107,122 104,246 94,397 83,642 55,974 41,755

Rising Indian corporate sector has invested in many countries of the Indian Ocean region. Many Indian companies have invested in Mozambique in the recent years. For example, RICON, the consortium of RITES and IRCON has won the 25 years concession to manage Beira railway system (SENA line) in December, 2004. India has assisted Mozambique Railway (CFM) to rehabilitate over 600 km of railway line.36 Meanwhile the Dondo-Marromeu part of Sena line has already been completed and inaugurated in November, 2008. Essar group and Jindal Steel Works have established offices in Maputo

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32 and Tete respectively. Six Indian companies are active in the coal sector. Coal India Ltd. (CIL) in March, 2009 won two coal blocks in Moatize, Tete province of Mozambique. The CIL has planned to set up of a premier mining institute in Mozambique, on the lines of the Indian School of Mines, Dhanbad. Tata steel has entered into a joint venture with Australian company Riversdale with 35% stake in coal licences covering 25,000 hectares of land. Tata Steel acquired additional 7.3 percent stake in Riversdale in September, 2008 raising its total share to 42%. In February 2008, Indias Global Steel Holding (GSHparent Company of Ispat Steel) acquired two coal-prospecting licenses in Tete province, covering 30,000 hectares. Jindal Steel, Videocon, Adani Group and P.K. Ores of Orissa are other companies who have joined the coal pursuit in Mozambique by buying coal mines from local license holders. The Indian Sadbhav Engineering (SE) Company acquired 74% equity in the Hong Kong-based mining enterprise Ocean Bright Corporation Ltd. (OBCL) and gained the rights to mining prospecting in Manica, Tete and Nampula provinces. They have also bought the rights to mine copper ore in 24400 hectares of area in the Tete province, limestone in a similar area in Nampula province, and coal in 5230 hectares in Manica.37 Bharat Petroleum and Videocon Industries have entered Mozambiques oil sector by acquiring a stake in energy exploration in Rovuma Basin in Northern Province of Cabo Delgado. These two companies have purchased a 20% stake in the offshore area from Andarko Petroleum of the US whose own share has been reduced to 36%. Rusini Bio-Fuels of Hyderabad is setting up a US$ 30 million project to produce Ethanol from sweet sorghum in participation with Petromac of Mozambique. The Government of the Southern Mozambican province of Inhambane has entered into an agreement with an Indian company Aar Ess Exim Pvt. Ltd. in 2007 for the construction of cement factory in Pambara with a capacity of 1,000 tonnes at a cost of US$65 million. 38 The Sajjan Jindal-promoted JSW Group has planned to develop a port in Mozambique. RJ Corp India in partnership with Pilivi Industries of Mozambique has set up a Pepsi Cola production plant on the outskirts of Maputo with the investment of US$10 million. The plant has become operational since February, 2009. Coal Ventures International (CVI), a consortium comprising Coal India, Steel Authority of India (SAIL), National Thermal Power Corporation (NTPC), National

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33 Minerals Development Corporation (NMDC) and Rashtriya Ispat Nigam Limited (RINL) has been formed to explore Joint Venture in the fields of coking coal, bio-energy, and other minerals, in Mozambique as part of a US$116-million investment.39 The advent of Indian mining companies in Mozambique to tap its vast coal reserves, is expected to transform this electricity exporting country into a regional powerhouse. Exploration and foreign investment in this sector is expected to rise to US$30 billion in the next decade. Indian companies want to invest in coal sector to have a control on the supply of coal, essential in the development of the country's power plants, cement and steel units. Buying coal mines would ensure the Indian companies of supply security. Exploration of these coal blocks, spread over 224 sq km, was set to commence shortly, and the mining activities were expected to begin after three and a half years.40 These investments and keen interest of Indian companies in Mozambique speaks volumes of goodwill and cooperation prevalent between the two countries. Defence Cooperation The role of Indian Navy in bringing about security and stability to the Indian Ocean and its littoral is a well recognized fact. Indian Navy is equipped to protect the larger maritime zone and police the entire waters from Madagascar, Mozambique and the Gulf of Oman in the west to the Malacca Straits. India is already receiving policing requests especially after its patrolling of the eastern waters with the Indonesian navy where Indian naval ships escorted US ships in the Malacca Straits for three months in 2002, and patrolled the Mauritian waters twice.41 India has an agreement to provide anti piracy patrols to Mozambique and has signed a Memorandum of Understanding (MoU) to promote
and expand defence cooperation. The scope of the MoU covers all the three

Services envisaging

cooperation in the field of military technical cooperation, logistic support and training. The MoU envisaged joint activities, such as maritime patrolling of the Mozambican coast, mutual training in military institutes, supply defence equipment/services, transfer of know-how and technology for assembling and repair of vehicles, aircraft and ships as well as rehabilitation of military infrastructure.42 In response to a request from the Mozambique government India deployed two vessels Sujata and Savitri of the Indian Navy to provide offshore security at Maputo, from June 23, 2003 to July 15, 2003 during

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34 the World Economic Forum Meeting (held from July 4 to 12 2003) and the fourth AfroCaribbean Pacific Heads-of-State Summit. The two ships also undertook Operational Sea Training of 100 personnel of the Mozambique Navy during the period between the two Summits. This operation was conducted from 30 May to 27 Jun 04 and the ships were deployed for nearly two months. The two ships effectively projected Indian Navy's capability for sustained operations off the Southern Coast of Africa. From June 4-13, 2007, an Indian Naval delegation visited Mozambique to conduct study for preparation of a broad plan for the long-term sustainable development of the Mozambican Navy.43 Cultural relations With sizable number of people of Indian origin in Mozambique, cultural relations between India and Mozambique have existed for the past few centuries. Apart from various cultural events organized by the local Indian community, a few theatres in Maputo and other cities regularly screen the latest Indian movies. Indian film festivals are organized by Indian High Commission in various cities of Mozambique from time to time. Cultural groups from India have visited Mozambique in the past. Recently, a five membr Bharatnatyam dance troupe led by Susheela Mehta visited Mozambique from 3-5 May, 2009 and gave two separate performances in Maputo. India Cup Cricket and India Cup Golf Tournaments are also organized every year with the support of High Commission, which help in bonding close cultural relationship between the two countries.44 Prospects for Future India and Mozambique have strong desire to strengthen bilateral relations. Given India's vast experience in sophisticated technology and industry, Mozambique wants India to share its expertise to explore untapped natural resources and help in meeting infrastructural requirements. It also intends to expand trade with India, seek cooperation in the development of commercial farming through the establishment of joint ventures and technical assistance on coconut and coir processing. It wants Indian to play a role in business, technology and investment in Mozambique especially in the Zambezi valley --potentially the richest part of the country, but whose people have the lowest human development index. Mozambique desires India's help in providing training in drug quality control, assistance in the field of anti-

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35 retroviral drugs and the treatment of Malaria, Tuberculosis and help combat HIV/AIDS etc. Both want to cooperate in the area of Transport and Communications. Mozambique has same perception as India on various international issues. It is in favour of the expansion of the UN Security Council and feels the need for equitable balance in the expanded Security Council to provide a constructive voice to the aspirations of the developing countries. Mozambique has expressed support for India's candidature to the permanent membership of an expanded UN Security Council. Both intend to fight against terrorism with an objective of its total elimination. Both reiterate their commitment to the UN Security Council Resolution 1373 and need to strengthen the international legal regime to fight terrorism through the adoption of the Comprehensive Convention on International Terrorism.45 Mozambique appreciates Indias security concerns in the light of recent local, regional and global developments; believes that Jammu & Kashmir is an integral part of India; supports resolution of differences between India and Pakistan through bilateral dialogue on the basis of Shimla Agreement of 1972 and Lahore Declaration of 1999. It also recognized the cross-border infiltration and terrorism and called on concerned countries to dismantle the infrastructure of support to terrorism and to stop serving as a platform for international terrorism.46 Conclusion India is a powerful country in the Indian Ocean. Its emergence as an important economic and military power in the recent decades suggest that the Country is going to play a more powerful role in the world let alone in the Indian Ocean. Akin to its rise, India can no longer contain itself to South Asia as was the situation during the Cold War. The nature and implications of its rising economic vitality and its highly successful knowledge based industrial sector is already creating ripples around the globe, at the United Nations and in the international financial institutions. Its new Africa policy is part of that changing global vision which is constantly on the upswing. The contours of this policy are defined by the continuity and change in its relations with the African countries of Indian Ocean littoral. Jawaharlal Nehru, Indias first Prime Minister once said that importance of Africa arose from the fact that though separated by the Indian Ocean from us, it is in a sense our next door neighbour. 47 The emotional bonds nurtured for decades

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36 by successive Indian leaders are now being translated into pragmatic economic cooperation with these countries. In this drive, Indian Diaspora is playing an important role in bringing the countries of their settlement close to their motherland. Looking at the nature and kind of goods and services India can offer to these lands suggest that in he times to come, the country will be able to create a powerful network of cooperation with the whole of the Indian Ocean Rim. India is not merely concerned with the larger economies in the region; it is building mutually beneficial relations with smaller and poor countries too. Mozambique is one such example. Strong and growing ties between India and Mozambique in terms of trade and investment as well as security due to the strategic transport links in the region will continue to expand.48 As there are no real issues between the two countries, it is further to suggest that in the times to come, relations between India and Mozambique are bound to grow in the wider spirit of Indian Ocean Cooperation. References
1. According to some sources the area of Mozambique is 799,380 sq. km. for Geography of the Country, see, The Statesmans Year Book, 2008, Macmillan, New York, 2007, p.885; The New Encyclopaedia Britannica, vol.. 8, 2002, p.383 2. Earlier it was created as SADCC to harmonize development plans and to reduce regions economic dependence on South Africa. In August 1992, SADC was established under an agreement among these countries. For the structure, membership and activities of SADC, see, The Europa Year Book 2008, vol. I, Routledge, London, 2008, pp. 386-91.

3. For history of colonialism and Civil War after it attained independence, see, Newitt, M. D. D: A History
of Mozambique, Indiana University Press, 1995, p. 679; Dodge, Cole P and Magne Raundalen, Reaching Children in War: Sudan, Uganda and Mozambique, Nordic Africa Institute, Uppsala, 1991, pp.146; Fitzpatrick, Mary: Lonely Planet Mozambique, Lonely Planet Publications, 2000. 4. The political pressure of the ideologically charged Civil War, in conjunction with the excruciating need for aid and funds to finance imports, compelled Marxist FRELIMO to negotiate structural adjustments with the World Bank and the International Monetary Fund in 1986. The structural adjustment required privatization of major industries, less government spending, deregulation of the economy, and trade liberalization. Structural Adjustments, therefore, have essentially focused on the implementation of an unfettered free market economy in Mozambique. See, Dorosh, Paul (et. al), Market Liberalisation and Role of Food Aid in Mozambique, in, Sahn, David E: Economic Reforms and the Poor in Africa, Oxford

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University Press, 1996, pp.339-365; Ostheimer, Andrea E, Transforming peace into democracy: Democratic structures in Mozambique, African Security Review, Vol. 8, No. 6, 1999. 5. The Liberation Front of Mozambique, better known by the acronym FRELIMO (from the Portuguese Frente de Libertao de Moambique) is a political party which was founded in 1962 to fight for the independence of the Portuguese Overseas Province of Mozambique, which was achieved in 1975 after the Carnation Revolution in Lisbon. It has ruled Mozambique from then until the present (2009), first as a single party, and later as the majority party in a multi-party parliament. Bowen, Merle. For details, see, The State against the Peasantry: Rural Struggles in Colonial and Postcolonial Mozambique, University Press of Virginia, Charlottesville, 2000. 6. See, IMF Mission Calls for Fiscal Stimulus in Mozambique, International Monetary Fund, Press Release No. 09/165, May 13, 2009. 7. Mozambique, A report prepared by Agulhas and Somali Current Large Marine Ecosystems (ASCLME) Project, accessed at, http://www.asclme.org/mozambique.html 8. The highest Mozambique's external debt has ever been was just over US$6 billion in 1998. From that date the debt was gradually reduced when Mozambique joined the Heavily Indebted Poor Countries (HIPC) Initiative, set up by the big international banks to write off the debts of the worlds poorest countries. See, Mozambiques external debt falls to 2.6 billion Euros over the last four years, at, http://www.clubofmozambique.com/solutions1/sectionnews.php?secao=business&id=15863&tipo=one 9. See, Hanlon, Joseph, Is Poverty Decreasing in Mozambique?, Paper presented at the Inaugural Conference of the Instituto de Estudos Sociais Economicos, Maputo, September 19, 2007. 10. Since countrys independence, efforts have been made to increase literacy rate in the country. For detail see, Mario, Mouzinho and Nandja Debora, Literacy in Mozambique: education for all challenges, paper commissioned for the Education for All Global Monitoring Report 2006, UNESCO, Paris, pp. 2-4 11. During 1996-2006, GDP per capita increased by an average of 6.2% per year, overall GDP increased, in real terms, at an average annual rate of 8.4% in 1996-2006. See, The Europa Year Book, vol. II, op. cit., p.3178. 12. The first case of HIV/AIDS was diagnosed in 1986 in Mozambique. This was followed by a steady increase in the prevalence rate up to an estimated 16.2% among the population aged 15 to 49 years in 2004. In July 2004, the Government declared HIV/AIDS a national emergency. For details see, HIV/AIDS-The Picture, at, http://www.unicef.org/mozambique/hiv_aids_2045.html 13. IMF Country Report Number 01/25; also see, Mozambique subsistence agriculture faces long-term decline from HIV/AIDS of Nations, epidemic, at http://www.fao.org/newsroom/en/news/2004/49917/index.html; Encyclopedia 14. http://www.nationsencyclopedia.com/economies/Africa/Mozambiqueby sector, available at,

AGRICULTURE.html; also see, The Europa Year Book, vol. II, op. cit., p. 3178. Mozambique GDP-composition http://www.indexmundi.com/mozambique/gdp_composition_by_sector.html

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15. This does not include the people engaged in informal sector which includes carpentry, motor vehicle repair, tailoring, hawking, and selling various fruits, vegetables, and other commodities. Recent studies, such as those conducted by researchers of the Centro de Estudos Africanos of the University Eduardo Mondlane in Mozambique, indicate that informal activity has increased substantially as a result of cuts to the social sector, unemployment and rising food prices. Unfortunately, the burden caused by these developments has been shouldered unequally by women, who have taken the responsibility of ensuring the survival of the family. In 1994, as much as 75 percent of all women in Maputo were forced to participate in the informal sector in order to earn their chief incomes. Such women make as little as $0.20 a day, plus food. See, The Europa Year Book, vol. II, op. cit., p. 3178. 16. Mozambique Natural Resources, available at, http://www.mapsofworld.com/mozambique/economy/natural-resources.html 17. In March 1976 Mozambique closed its border with Rhodesia (Zimbabwe) resulting in border fighting between Mozambican and Rhodesian troops. As a result the Rhodesian Intelligence helped to establish the Mozambique National Resistance (RENAMO) and after Zimbabwe's independence in 1980, South Africa continued to support RENAMO which embarked on a terror campaign against local people and by March 1989 a full scale civil war that ensued had claimed as many as 600,000 lives and displaced an estimated 5 million people. See, Preston, Matthew, Ending Civil War: Rhodesia and Lebanon in Perspective, 2004. Page 66; Meredith, Martin, The Past is Another Country, p. 218. Ryan, Johnny, "Principled Failure: British Policy toward Rhodesia, 1971-72", The History Review, 2004. 18. Juergensen, Olaf Tataryn, Angonia: why Renamo? Southern Africa Report (SAR), vol. 10, No 2, December 1994, p.13; also see, Alexander, Jocelyn, The local state in post-war Mozambique: political practice and ideas about authority, Africa, Vol. 67, 1997.

19. Mozambiques relations with Soviet Union date back to the 1960s, when USSR began to support the struggle of Mozambique's Marxist-oriented FRELIMO party against Portuguese colonialism. Most leaders of the FRELIMO were trained in Moscow. Diplomatic relations were formally established on 25 June 1975, soon after Mozambique gained its independence from Portugal. Thereafter the Soviet Union and its allies became
Mozambique's primary economic, military, and political supporters. See, U.S. Congress, House, Committee on Foreign Affairs, Soviet Policy and United States Response in the Third World, Committee Report, 97th Cong., 1st Session., 1981, pp. 29-30, 60; Belfiglio, Dr. Valentine J, The Soviet Offensive in Southern Africa, Air University Review, July-August 1983. 20. Appadurai, Arjun, Modernity at Large: Cultural Dimensions of Globalization,

University of Minnesota press, Minneapolis, 1996. 21. Takashi, Oishi, Indian Muslim Merchants in Mozambique and South Africa: Intra-regional Networks in Strategic Association with State Institutions, 1870s-1930s, Journal of the Economic and Social History of the Orient, ISSN 0022-4995; Subramanian, Lakshmi, The Global World of Indian Merchants, 1750-

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1947: Traders of Sind from Bukhara to Panama (Cambridge Studies in Indian History and Society), Cambridge University Press, 2000. 22. Bastos, Susana, Distinguished families, exceptional women: a contribution towards the study of Islamic elites in the Portuguese-speaking Indian Diaspora, in, Bastos, S. & Bastos J. (eds.), Different Children of Different Gods: Uses of Religion in Strategies of Differentiated Social Insertion, Lisbon, ACIME. 23 Susana, Pereira Bastos, "Indian Transnationalisms in Colonial and Post-colonial Mozambique", Wiener Zeitschrift fr kritische Afrikastudien, no. 8, 2005, pp. 277306. 24. Singhvi, L. M, Report of the High Level Committee on the Indian Diaspora, New Delhi, Ministry of External Affairs, 2002, pp. 89109, 25 For details see, Keshavjee, Habib: The Aga Khan and Africa, His Leadership and Inspiration, The Mercantile Printing Works, Durban, 1945. 26. High Commission of India in Moputo, available at, http://www.hicomind-maputo.org/community.html 27. Ibid., 28. Since then the two countries have maintained a cordial and friendly relationship. This include important visits by Foreign Minister Pascoal Mocumbi to India in August 1992, Indian Minister of State for External Affairs Salman Khursheeds visit to Mozambique in Jan 1994, Mozambican Interior Ministers visit to India in Sept 1997, Indian Minister of External Affairs Jaswant Singhs visit to Mozambique in March 1999, and the Indian Minister of State for External Affairs Digvijay Singhs visit in December 2002 for the first meeting of the Indo-Mozambique Joint Commission. Mozambican Defence Minister Tobias Dai visited India in March 2006 and February 2008 (to participate in DEFEXPO in New Delhi). Mozambican Minister for Science and Technology visited India July 2006, Mineral Resources Minister Esparanca Bias visited to attend CII conference in New Delhi in October, 2006 and Agriculture Minister Tomas Mandlate visited India in November, 2006. Vice Minister for Mineral Resources Abdul Razak Noormahomed visited to attend the India-Africa Hydro-carbon conference in November 2007. Mozambican Interior Minister Jose Antonio Pacheco visited New Delhi in July 2008, Salvador Namburete, and Mozambique Minister of Energy, visited to participate in a Conference on Energetic Independence with Global CooperationPETROTECH 2009 organized by Indian Oil Cooperation under the auspices of Ministry of Oil and Natural Gas from 11-15 January, 2009 in New Delhi. Further, Mozambican Environment Minister Alcinda Abreu visited India from 5-7 February, 2009 and discussed environment matters. A 4-member delegation led by Vice Minister of Agriculture, Caterine Pajume visited to attend the CII-EXIM Bank Conclave on India-Africa Project Partnership 2009 held in New Delhi on 22-24 March, 2009. The second session of India-Mozambique Joint Commission on Economic, Cultural, Scientific and Technical Cooperation was held in New Delhi on 18-19 February, 2009. In this session a whole range of issues was discussed to strengthen bilateral relations. Minister of State for External Affairs Shashi Tharoor visited Moputo on January 13, 2010, on the occasion of inauguration of President Guebuzas second term. For details see, http://www.hicomind-maputo.org/message.html; also see, Mozambique wants greater vigour in relations with India, Thaindia News, January 14, 2010.

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29. The first Line of Credit of US$20 million was offered in 2003 which became operational in September, 2004 with the signing of agreement between EXIM Bank and Mozambican Government. Out of this US$20 million, US$10 million was allotted for rural electrification in Zambezia province, US$ 8 million for water management and US$ 2 million for a coir project. The second LOC of US$20 million was granted in December, 2006 for rural electrification in Gaza province. The third LOC of US$20 million was approved in April, 2008 to finance transfer of water drilling technology and equipment from India to Mozambique. The fourth LOC of US$25 million was approved in August, 2008 for establishment of IT Park in Mozambique. The last and fifth LOC for US$30 million was approved in December, 2008 for financing rural electrification projects. See, Message of High Commissioner on Indias Independence Day 2009, available at, http://www.hicomind-maputo.org/message.html 30. Ibid., 31. From Indian side, MOS for External Affairs, Shri Anand Sharma visited Mozambique on July 1-2, 2007 led a business delegation to attend the CII regional conclave on India-Africa project partnership held in Maputo. Minister of Overseas Indian Affairs Mr. Vayalar Ravi also visited Mozambique on 11-14 November, 2007. Mr. Eduardo Faleiro, Commissioner for NRIs, Goa Government visited Mozambique from 16-21 May, 2008. Atul Chaturvedi, Secretary, Department of Ferltilizer lead a 12-member delegation to Maputo in September, 2008 and held discussions with the Minister of Mineral Resources for opening an Integrated Fertilizer plant in Mozambique. A two member delegation from Ministry of Finance led by Mr. K.Ramalingam visited Maputo on 24-28 March, 2009 to hold second round of negotiations on DTAA. Indian Minister of State for External Affairs, Anand Sharma visited Maputo on July 1-2, 2007 led a business delegation to attend the CII regional conclave on India-Africa project partnership. Minister of Overseas Indian Affairs Vayalar Ravi also visited Mozambique on 11-14 November, 2007. See, Ibid., 32. See, Report of the first meeting of the inter-governmental committee on African Science, Technology and Innovation Indicators (ASTII), 17-18 September 2007, Maputo, Mozambique. 33. Situated at Beluluane in the Boane district, about 17 km from central Maputo, the MOZAL project is a 250,000 ton per annum capacity primary aluminum smelter built at the cost of US$ 1.3 billion. The project is one of the most modern facilities of its kind in the world. It is owned by an international consortium led by London-based Billiton having 47% share, South Africa's Industrial Development Corporation has 24%, Mitsubishi of Japan has 25% and the government of Mozambique has 4% shares. See, afrol.com, 21 September 2000; and, http://www.bhpbilliton.com 34. For the commodities Mozambique Imports yearly, see, http://www.indexmundi.com/trade/imports/? country=mz3 35. Source, High Commission For of India, Maputo, see, available at, http://www.hicomindand maputo.org/pages/trade.html; further details http://commerce.nic.in;

http://www.infodriveindia.com/Export-Import/Trade-Statistics/Countries-Wise.aspx 36 RICON has taken up, Beira Rail Concession Project worth US$ 0.13 million; Study, Design and Rehabilitation of Dona Ana Bridge Rs. 268.71 Million; Supply of Prestressed Monoblock Concrete

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Sleepers for Cape Gauge Rs. 491.65 Million; Supply of Stone Ballast for Sena Line of Beira Railway Corridor Rs. 221.68 Million; Rehabilitation of 670 kms of Cape Gauge of Sena line between Dondo and Moatize, including branch lines of Inhamitanga-Marromeu, etc. See, Railways and railways Projects, IRCON International Limited, at, http://www.ircon.org/railways.asp; Improvement Railways Transportation Coal-Mine in Central Mozambique, Mining Exploration News, September 15, 2008. 37. Hong-Kong based OBCL directly and through its subsidiaries holds licenses for prospecting iron ore, copper, lime stone in the provinces of Tete, Nampula, Monica, Niassa of Mozambique. See, Sadbhav Engineering to buy 74% stake in Ocean Bright Corp, at, http://www.stockwatch.in/stock-news/sadbhavengineering 38. See, India Africa Connect, available at, http://indiaafricaconnect.in/indiaafrica-projects.php 39. April 2007, Rajiv Sharma, Additional Secretary, Ministry of Coal visited Mozambique and held discussions with his Mozambican counterparts. During his visit a plan of action was signed on cooperation in the field of Coal. This was followed by a visit of three-member team of Coal India Ltd. led by Director (Technical) to study the geological and other data of the various coalfields in Mozambique including Moatize (Tete Province) Manimba/Metangula coal basin (Niassa Province). Subsequently, a three-member delegation from Mozambique visited India from November 25 to 2nd December 2007 to overview the Indian experience in coal/project mining, processing of coal, geo-mapping etc. See, Coal India awarded two blocks in Mozambique, The Hindu Business Line, March 7, 2009. 40. Coal India plans subsidiary in Mozambique, Business Standard, August 18, 2009 41. See, The Hindu, April 23, 2002; Tackling Terrorism on High Seas, The Financial Express, November 5, 2003; Ramachandran, Sudha, Delhi all ears in the Indian Ocean, South Asia, March 3, 2006. 42. See Press Information Bureau press release at, http://mod.nic.in/samachar/april1-06/h3.htm 43 India and Mozambique, Developments in Bilateral Relations, available at, http:// www.hicomindmaputo.org/pages/bilateral.html 44. INTERNATIONAL CRICKET COUNCIL DEVELOPMENT PROGRAM AFRICAAFRICA CRICKET ASSOCIATION, Newsflash Africa, September 2008, p.3, available at, http://www.africacricket.org

45. UN Security Council unanimously adopted wide-ranging anti-terrorism resolution on September 28, 2001 which calls for suppressing terrorism and improving international cooperation to fight against this menace. See, Press Release SC/7158, UN Security Council.
46. State visit of. Joaquim Alberto Chissano, President of the Republic of Mozambique, IndiaMozambique, Joint Statement, May 12, 2003 47. Cited in, T G Ramamurthy, Foundations of Indias Foreign Policy, Africa Quarterly, Vol. 37, No. 1 &2, 1997, p.30 48. Vines, Alex and Oruitemeka, Bereni, Engagement with the African Indian Ocean Rim states, Journal South African Journal of International Affairs, Vol.14, Issue 2, Winter 2007, pages 111-123.

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