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. The economic dimension of the bilateral relationship has now become its most important.
Bilateral Trade : Bilateral trade in 2015 stood at US$1.2 billion, of which India’s exports to Ethiopia were over US$1.15 billion and imports were US$65 million. Iron & Steel Products are India’s major export items to Ethiopia, accounting for 17.2% of India’s total exports to Ethiopia. It was followed by rice (12.7%), pharmaceuticals (10.6%), transport equipment (5.6%), machineries (5.5%), sugar (5.2%), paper products (4.5%), plastics (3.3%), rubber (3.2%), textile and clothings (3.0%), etc. Major imports by India from Ethiopia were: pulses, precious and semi precious stones, vegetables & seeds leather and spices. India is the second most important source of imports for Ethiopia, contributing 7.4% of all of Ethiopia’s imports next to China.
Investment : There is no Ethiopian Investment in India. Indian companies maintained their reputation as being in the top three foreign investors in Ethiopia with newer Indian multinationals marking their presence in Ethiopia. There are more than 584 Indian companies in Ethiopia with licensed investment of over US$ 4 billion of which about US$ 2 billion is estimated to be on the ground. Indian companies have invested in various sectors like agriculture and floriculture, engineering, plastics, manufacturing, cotton and textiles, water management, consultancy and ICT, education, pharmaceuticals and healthcare. About 54.6% of Indian investment is in the manufacturing sector, followed by agriculture (17.5%).
Some major investments by Indian companies announced in 2015 include Asian Paints, Arvind, Raymonds, Kanoria, Fontana Flower PLC, Balaaji Manufacturing PLC, Samaka Stones Pvt. Ltd. Co. and Velocity Apparel. More Indian companies began to invest in Ethiopia, especially in the textile and garments sector, which is a priority sector in the Growth and Transformation Plan-II. Arvind set up a six-million-piece garment plant in Ethiopia. Kanoria Africa Textiles PLC’s denim factory in Bishoftu was opened by the Honorable Prime Minister of Ethiopia on 24 October 2015. Raymond signed a US$100 million investment agreement with the Ethiopian Government during the Ethio-India Investment Forum held in Mumbai in October 2015.
Indian companies in Ethiopia : Some of the Indian companies in Ethiopia are Cadila Pharmaceuticals PLC, S & P Energy Solution PLC, Tata International Limited, Karuturi Global PLC, Kanoria Africa Textiles PLC, Mohan Group of companies, Anmol Products Ethiopia PLC, Telecommunications Consultants India Limited (TCIL), EXIM Bank of India, Oxford Group of Companies, Roto PLC, Whitefield Cotton Farm PLC, Ruchi Agri PLC, Verdanta Harvests PLC, Neha International PLC, Asian Paintings, Arvind Mills, Allanasons Ltd., Kanoria, SVP Group, Fontana Flower PLC, Balaji Manufacturing PLC, Samaka Stones Pvt. Ltd. Co., Velocity Apparel etc.
Marketing/Investment opportunities in Ethiopia : The 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, tourism, construction, mining & oil and hydropower. Leading non-agricultural sectors and investment include: renewable energy, information technology and communications (ICT), construction, tourism and aviation. Sub-sectors such as mobile banking services and outsourcing services, website software and technologies, software development for eGovernment services, and ICT training services are going to be among the major investment opportunities in the country. The ambitious road construction and expansion projects in the country also offers 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.
Agreements : A Trade Agreement between the Government of the Republic of India and the Government of the Federal Democratic Republic of Ethiopia was signed at New Delhi in 1997. A new Bilateral Trade Agreement is under negotiation. A Bilateral Investment Promotion and Protection Agreement (BIPPA) was signed in 2007 but not enforced yet. India and Ethiopia signed a Double Taxation Avoidance Agreement (DTAA) in 2011. The DTAA has been made effective in India w.e.f. 1.4.2013. During the India-Africa Forum Summit of April 2008, Prime Minister Dr. Manmohan Singh had announced the Duty Free Tariff Preference Scheme (DFTP) for Least Developed Countries (LDCs). Ethiopia was among the first countries that had accepted the DFTP Scheme. Ethiopia being a Least Developed Country, as per the WTO mandate and pursuant to the decisions of the WTO Ministerial Conferences and the collective request of LDCs, visa fee is waived for Ethiopian applicants seeking Indian business and employment visas.
Trade promotion activities : The Embassy promotes trade, investment and technology transfer processes in Ethiopia. SMEs have been a special focus and the Embassy is committed to support SME companies in creating partnerships in Ethiopia. A large number of SME industry members have been participating at the trade fairs and exhibitions, Buyer-Seller Meets and product promotion programmes in India. These efforts strengthen the dialogue of the Ethiopian delegations with the SMEs in India. The Embassy also promotes and facilitates visits by trade delegations by arranging meetings and organizing Exhibitions, Buyer-Seller Meets, etc.
Lines of Credit : The ongoing Government of India assistance in developmental projects in Ethiopia continued with sanctioned Lines of Credit worth more than US$1 billion to the Government of Ethiopia for sectors such as rural electrification, sugar industry and railways. Ethiopia is the largest recipient of long term concessional credit from India in Africa. Finchaa and Wonji Shoa sugar factories and Phase I of the Tendaho sugar factory being built in Ethiopia under the Indian EXIM Bank’s Lines of Credit of US$ 640 million are almost complete. India has also donated to Ethiopia a 64-Slice CT Scan Machine to Black Lion Hospital in Addis Ababa as part of our Grant Assistance. NIFT and CLRI also have twinning arrangements with their Ethiopian counterparts ETIDI and ELIDI and undertake capacity building projects.
India Business Forum : Indian Embassy in Addis Ababa supports the IBF (India Business Forum) which focuses on promoting bilateral trade and investment between India and Ethiopia. The India Business Forum (IBF) was launched on October 30, 2005, and has organized meetings with the Presidents of the Regional states, General Managers of Banks, DG, Ethiopian Customs Revenues Authority, Ethiopian Employers Federation, Ministers of Trade, Industry and even with the late H.E. Mr. Meles Zenawi, Prime Minister of Ethiopia and H.E. Mr. Hailemariam Desalegn, Prime Minister of Ethiopia. IBF is the first foreign Forum of its kind in Ethiopia and is considered a model for foreign businesses to organize themselves on. IBF meets twice every month, either at the Executive Committee or the General Body-level. The India Business Forum (IBF) celebrated its 10th anniversary on 5 October in the presence of Dr. Arkebe Oqubay, Adviser to the Prime Minister of Ethiopia as Chief Guest. Dr. Arkebe’s presence was a boost to the Forum’s presence and engagements in Ethiopia and will provide it more access to Ethiopian government in future. The 9th anniversary of IBF in October 2014 was graced by the Ethiopian Prime Minister; H.E. Hailemariam Desalegn.
Projects : Indian companies from public and private sectors have secured several contracts in the infrastructure sector, including consultancy works, in roads, power, etc.
Tech Mahindra Limited signed an agreement with the Commercial Bank of Ethiopia (CBE) worth US$2.3 million to implement and support Enterprise Resource Planning, Business Intelligence and Enterprise Performance Management (Hyperion) systems. Nint Agri PLC, an Indian company, has been accepted in the Teff International Market Access (TIMA) project for the production of tef through 150 hectares of land in Oromia Region. Tata Group has secured contracts for the installation of 403 kilo meter long power transmission line in the northern part of Ethiopia. JMC Projects (India) Limited has been awarded a contract for the part 258 km of Nekempte-Bure Road upgrading project. The contracts for the monitoring 257.2 kms, Nekemte-Bure Road project amounting to Birr 5.7 Billion (US$285 million) have been awarded to Elsamex S.A., a Spanish Company (with a Dubai-based Indian sub-contracting company, IL & FS Transportation Networks Ltd.). Larsen Arsen & Toubro Limited awarded a contract for capacity improvement and expansion project at power distribution stations. Mahindra Consulting Engineers Limited (MACE) is actively working with UNIDO and Ministry of Industries, Government of Ethiopia in developing integrated Agro Industrial parks (IAIP) and Rural Transformation Centers (RTC) in four regions of Ethiopia.
Visits from India : Momentum maintained in trade and economic engagements with participation of Indian business delegations in Trade Fairs, BSMs, etc. A FIEO-coordinated delegation of 28 Indian companies representing diverse sectors participated in the Addis Chamber International Trade Fair (ACITF). ASSOCHAM led an 11-member delegation and another 21-member multi-sectoral delegation also visited Ethiopia. The Embassy facilitated trade delegations and also organized Exhibitions and Buyer-Seller Meets. A delegation of Chemicals and Allied Products Export Promotion Council (CAPEXIL) of India visited Addis Ababa from 3-6 June 2015. The Third International Conference on Financing for Development (FfD3) was held in Addis Ababa from 13-16 July 2015 and India was represented by Shri Jayant Sinha, Hon’ble MoS (Finance). 18 Indian companies representing building and construction materials participated in the 6th Addis Build Construction Exhibition in Addis Ababa. A 21-member (18 companies) delegation from the Engineering Export Promotion Council (EEPC) led by Mr. Mahesh K Desai, Regional Chairman visited Ethiopia from 20-23 March to explore mutually beneficial business opportunities.
Visits from Ethiopia : Important visits and participation from Ethiopia included in Vibrant India First-B2B Trade Summit in Ahmadabad, in India Electronics Expo in New Delhi, visit of State Minister of Mines with a delegation to Jaipur to learn best practices in precious and semi precious stones sector and by Health Minister to attend Call to Action Summit-2015 in New Delhi. Most importantly, Prime Minister of Ethiopia attended the 3rd India-Africa Forum Summit in New Delhi from 26-29 October and also had bilateral meeting with the Hon’ble Prime Minister of India. A separate Ethio-India Business Forum was organised in New Delhi on 29 October by the Ethiopian Embassy and in Mumbai on 30 October by the Ethiopian Consulate. The Forum in Mumbai was also addressed by the Hon’ble Prime Minister of Ethiopia. Dr Tedros Adhanom, Minister of Foreign Affairs, Dr. Arkebe Oqubay, Adviser to the Prime Minister of Ethiopia, Mr. Fitsum Arega, Commissioner, Ethiopian Investment Commission and Mr. Mayur Kothari, Convener, India Business Forum participated in the Forum. A 19-member Ethiopian business delegation led by the Secretary General of the Ethiopian Chambers of Commerce & Sectorial Associations visited the SVUM 2016 International Trade Show at Rajkot from 11 to 15 February. A-6 member high level delegation team of Ministry of Public Enterprises, led by Her Excellency Demitu Hambisa, Minister of public Enterprise visited India in March 2016. The delegation met Hon’ble Minister of Heavy Industries and Public Enterprises of India and an 11-member delegation from the Ethiopian Chambers of Commerce & Sectorial Association participated in the CAP India 2016- a joint initiative of CHEMEXCIL, PLEXCONCIL, CAPEXIL and SHEFEXIL in the Chemicals & Plastics Sector which was held from 20 to 22 March 2016 at Bombay Exhibition Centre, Mumbai.