INDIA – ETHIOPIA COMMERCIAL RELATIONS
- India and Ethiopia have long-standing economic and commercial relations, which are centuries old and can be traced back over 2000 years of recorded history. During the Axumite Kingdom, Indian traders had links with the ancient port of Adulis in the eastern part of Ethiopia and traded silk and spices for gold and ivory.
- In recent years, with the opening up of the Ethiopian economy, business ties between the two countries have grown significantly, especially in the areas of trade, investment, agriculture and infrastructure projects.
- Bilateral trade between Ethiopia and India stood at USD 1.28 billion in 2019, out of which Indian exports to Ethiopia were USD 1.23 billion and imports were USD 55.01 million. In 2020, bilateral trade between Ethiopia and India stood at US$1.14 billion, out of which India’s exports to Ethiopia were US$1.08 billion and imports were US$56.55 million(Source: National Bank of Ethiopia).
- Exports from India mainly include primary and semi-finished iron and steel products, drugs and pharmaceuticals, machinery and instruments, manufactures of metal, etc. Major imports by India from Ethiopia were: pulses, precious and semi-precious stones, vegetables & seeds, leather and spices.
- India is the third most important source of imports for Ethiopia, contributing 8% of all of Ethiopian imports next to China, Kuwait and USA. India contributed 1.6% of Ethiopian export to the world.
Marketing/Investment opportunities in Ethiopia
- Areas with most promising potential for investments in the country are agriculture, food-processing, leather & leather products, textile & garments, horticulture, sugar & related industry, chemicals industry, pharmaceutical industry, cement industry, metal & engineering industry, construction, mining & oil and hydropower.
- Leading non-agricultural sectors and investment include renewable energy, information technology and communications, construction, tourism and aviation. Sub-sectors such as mobile banking services and outsourcing services, website software and technologies, software development for e-Government services, and ICT training services are going to be among the major investment opportunities in the country.
- The road construction and expansion projects in the country also offer opportunities either to directly involve in the construction work or export of construction machinery, chemicals, and building materials as well as consultancy and supervision services.
Bilateral Trade and Investment
- Since the opening up of the Ethiopian economy in the last decade, business ties between the two countries have increased significantly especially in the area of infrastructure projects like roads, power, telecommunications and water resources.
- First meeting of Joint Trade Committee was held in Addis Ababa (1998). The last (fifth) JTC meeting was held in Addis Ababa (Oct 2008).
- Bilateral Investment Promotion and Protection Agreement was signed on 5 July 2007 but it has not been operationalized.
- Joint Business Council was established between FICCI/ASSOCHAM and the Ethiopian Chamber of Commerce (1997).
- Double Taxation Avoidance Agreement signed in May 2011.
- Indian companies are in the top three foreign investors in Ethiopia with newer Indian multinationals marking their presence in Ethiopia.
- There are more than 600 Indian companies in Ethiopia with licensed investment of over USD 5 billion of which about USD 3 billion is estimated to be on the ground. Indian investors are the second-largest foreign employers in Ethiopia, providing employment to more than 75,000 persons. About 61.78% of Indian investment is in the manufacturing sector, followed by agriculture (13.1%).
- Indian companies have invested in various sectors like agriculture and floriculture, engineering, plastics, manufacturing, cotton and textiles, water management, pharmaceuticals and healthcare.
- Some of the major Indian companies include Asian Paints, Jay Jay Mills, Ashton Apparels, Ethio Cements, Arvind Mills, Raymonds, Kanoria, Hansa Flowers, Balaji Manufacturing PLC, Aayana Marbles, Samaka Stones, MSP Steel & Power Limited, Mahavir Textiles PLC, Aarti Steel, GEC Steel, Esdee Paints Limited, and Velocity Apparel.
- On the sidelines of the visit of Ethiopian Deputy Prime Minister & Foreign Minister to India, a Business Forum meeting was held in New Delhi (17 Feb 2021). As part of India@75 celebrations, a business interaction was held at the Embassy premises (25 May 2021). State Minister for Foreign Affairs Tsion Teklu, State Minister for Trade & Industry and representatives of Ministry of Mines and Ethiopian Investment Commission interacted with more than 110 Indian investors. State Minister for Foreign Affairs listened to the issues raised by Indian investors and assured them of early resolution.
- FIEO in collaboration with the mission organized a webinar on Trade and Investment opportunities between India and Ethiopia – post Covid-19 (11 Jan 2021). The event was attended by 110 participants. India-Ethiopia virtual business session was organised by CII, Ethiopian Embassy in New Delhi and EoI Addis Ababa (29 Jan 2021). The event was attended by Ethiopian State Minister for Trade Misganu Arga, Ambassadors of Ethiopia and India, and more than 100 participants. Study in India Educational Fair was held at Embassy of India, Addis Ababa (10-11 Feb 2021). About 15 universities/colleges from India participated at the fair, and the event saw enthusiastic participation of large number of Ethiopian students. Virtual meeting on India-Ethiopia Pharmaceutical Cooperation and Regulatory Development was held on 17 Feb 2021.
- Business delegations from India visit Ethiopia regularly. They include Engineering Export Promotion Council delegation (March 2016), delegation of the Basic Chemicals, Cosmetics & Dyes Export Promotion Council (Aug 2016), ASSOCHAM participation at the 9th Ethio Chamber International Trade Fair (Nov 2016), CII delegation (Feb 2017), Indian Medical Tourism Destination exhibition (Feb 2017), Indian participation at the Addis Chamber International Trade Fair (Feb 2017), Indian Textile Exhibition (March 2017), 7th Hortiflora Ethiopia 2019 (March 2019), 2nd Ethiopia International Trade Exhibition (March 2019), second Indian Medical Tourism Destination (Sept 2019), FIEO business delegation (Nov 2019), and Indian participation at ITME Africa 2020 (Feb 2020).
- Ethiopian delegations had attended SVUM 2016 International Trade Show at Rajkot (Feb 2016), CAP India 2016 – a joint initiative of CHEMEXCIL, PLEXCONCIL, CAPEXIL and SHEFEXIL in the Chemicals & Plastics Sector in Mumbai (March 2016), CII-EXIM Conclave on India Africa Project Partnership in New Delhi (March 2017), 52ndAnnual Meetings of African Development Bank Group at Gandhinagar (May 2017), delegation including government officials and textile industry representatives to Government Polytechnic Nagpur (May 2017), Plast India Exhibition in Gandhinagar (Feb 2018), IPHEX-2018 in New Delhi (May 2018), IPHEX-2019 in New Delhi (June 2019), 48th Edition of Handicraft Fair in Delhi (Oct 2019), 2nd International Exhibition on AROGYA in Varanasi (Oct 2019), World Trade Expo 2019 in Mumbai (Nov 2019), and a delegation from Ethiopian micro and financial sector (Dec 2019).
India Business Forum
- Indian Embassy in Addis Ababa supports the India Business Forum (IBF) which focuses on promoting bilateral trade and investment between India and Ethiopia. IBF was launched on 30 October 2005, and has organized meetings with Ethiopian federal and regional authorities, General Managers of Banks, Ethiopian Customs Revenues Authority, etc.
- On the sidelines of the visit of Ethiopian Deputy Prime Minister & Foreign Minister to India, IBF attended the India Ethiopia Business Forum meeting in New Delhi (17 Feb 2021). IBF made a presentation on investment opportunities in Ethiopia.
- Embassy and IBF organized a business interaction with State Minister for Foreign Affairs and State Minister for Trade and Industry (25 May 2021). About 110 Indian investors attended the event.