Ethiopia- India relations

Ethiopia-Indian relations 

It was in July 1948 that Ethiopia and India first established diplomatic relations at the level of legations. The relationship was raised to ambassadorial level four years later in 1952. Equally, there had been contacts between the people of both countries for many centuries, and this long legacy had been nourished through trade and commerce. More recently, since the establishment of full diplomatic relations, the two countries have consistently made efforts to strengthen their relations. There have been a number of visits by the leaders of each country and a number of agreements signed. These have steadily contributed to the deepening of relations. 

This has been particularly visible in the way the two countries have constantly supported each others positions in international forums in many different areas. Ethiopia and India share a common understanding on such issues as cross-border international terrorism, the need and direction for reform of the United Nations, and now on climate change. 

Economic relations have steadily increased in the last two decades, since the EPRDF came to power. The volume of bilateral trade reached over US$ 500 million last year. Certainly the balance substantially favors India, but Ethiopia exports raw hides and skins, pulses, oil seeds, spices, and similar products to India. India, in turn, exports iron and steel products, drugs and pharmaceutical supplies, machinery and instruments to Ethiopia. The Indian government has now initiated a Duty Free Tariff Preference Scheme designed to help Ethiopia and other developing African states export their products to India. Ethiopia is already operating this scheme. In addition a trade agreement was signed in 1997 to facilitate trade relations, and the two countries set up a Joint Trade Committee that same year. This regularly reviews the progress of bilateral trade as well as the progress in implementing the various agreements that have been signed between Ethiopia and India. It also has the job of exploring possible new areas for cooperation.

Indian companies have been playing a prominent role in the area of investment. Currently some 427 Indian companies have investment licenses. The total capital involved is more than US$ 4 billion. The areas involved include: agriculture including floriculture, engineering, plastics, pharmaceuticals and hotels and restaurants. Indian companies have shown a keen interest in investing in Ethiopia, identifying it as a country that is stable, that has sound macro economic policies, and that also has good governance. All this facilitates investment.  In addition, the Indian government has certainly encouraged Indian investment in Ethiopia, and indeed in Africa more widely, by providing finance through its Export-Import Bank (EXIM Bank). The bank opened an East African regional office in Addis Ababa on September 21, 2010. This is expected to further expand trade and investment relations between India and East African countries in general, and Ethiopia in particular. It is also expected to create significant and conducive opportunities for Indian investors. 

Another aspect of this has been Indias willingness to help finance different development projects through the provision of soft loans. Ethiopia has benefited largely. The EXIM bank has already provided some US$ 700 million through its line of credit facilities. Of these, for example, US$ 65 million has been earmarked for a rural electrification project; another US$ 640 million has been for the expansion of Ethiopias sugar industry. The opening of the EXIM Banks regional office in Addis Ababa suggests real possibilities for loans for future development prospects. 

The government of India has not confined its assistance to loans of this kind. It has offered various training courses through the Indian Technical and Economic Cooperation (ITEC) program.  This started as long ago as 1969, and has been exceptionally useful in educating experts in various fields and in giving support for capacity building, as well as providing a supply of equipment to a wide variety of different institutions. Nearly 700 Ethiopians have been able to study under the ITEC program. As part of its intended transfer of technology and skills, the Indian government has set up a pilot project for tele-medicine and tele-education under the Pan-Africa e-Network project. Ethiopia is the first country to implement this project; and Addis Ababa University and the Black Lion Hospital in Addis Ababa are the nodal centers for tele-education and tele-medicine respectively.

Cooperation between Ethiopia and India has also been encouraged by the launching of the India-Africa Forum. The Forum is a mechanism for collective dialogue and mutual cooperation between Africa and India, and in general it focuses on issues of economic and social development. The Forum is, of course, essentially a multilateral structure and this aspect of India-Africa relations can now expect to be strengthened so that the Forum can work more closely with the African Union, with NEPAD and with the Regional Economic Communities (RECS) and other groupings, on cross-border, multi-country projects encouraging regional integration. It is also expected to encourage investment in Ethiopia as well as elsewhere in Africa.  

The government of India underlined its readiness to continue to strengthen bilateral relations with Ethiopia by the opening of EXIMs East African regional office in Addis Ababa. It is scarcely surprising Prime Minister Meles pointed out in his address to the 8th Congress of the EPRDF that India, like China, has been remarkably generous in offering such support to the people and government of Ethiopia even before it has completed efforts to lift all of its own people out of poverty. India has consistently been a most dependable and generous partner. Equally, it has always offered a relationship based on mutual respect and mutual benefit. Ethiopia will not forget India's generosity nor its support in so many areas.