INDIA-ETHIOPIA ECONOMIC AND COMMERCIAL RELATIONS

1.  General:  India and Ethiopia have long-standing economic and commercial relations, which are centuries old and can be traced back to the past 2000 years of recorded history. During the Axumite Kingdom, Indian traders flocked to 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, specially in the area of infrastructure projects like roads, power, telecommunications and water resources.  During various meetings, Prime Minister Meles Zenawi has warmly spoken of further increasing bilateral trade and more investments by Indian companies in Ethiopia. Similar views have been echoed on several occasions by other Ministers and senior officers, and India is generally viewed as a role model for development in agriculture, rural development, education, IT, healthcare, small scale industries.  The economic part of the bilateral relationship has now become the most important. 

2.         Bilateral Trade: The bilateral economic relations are moving forward with the growing private sector investments from India, with 379 Indian companies having secured investment licenses in different areas with a total capital of US$ 3.6 billion during the period 1992 - 2008.  

Bilateral trade figures with Ethiopia based on data from DGCIS, Kolkata and data sourced from the Ethiopian Customs authority are at Annexure I.  The Ethiopian figures show Indian exports as US$ 426.9 million in 2007-08 (c.i.f.), while the DGCIS figures put it at merely US$ 197.7 million.  The official figures from DGCIS suffer from vagaries of statistical analysis. According to DGCIS data, Indian exports to Ethiopia increased from US$ 61.7 million (2002-03) to US$ 197.7 million (2007-08), but for Djibouti these show more than eleven-time increase from US$ 37.2 million to US$ 458.4 million during the same period.  Ethiopia has the second largest population of about 80 million in Africa as against Djibouti’s merely 0.7 million population (less than 1% of Ethiopia’s population). The trade figures for a small country like Djibouti, which serves as the port for landlocked Ethiopia, are unrealistic and Djibouti does not have the capacity to absorb or utilize such high Indian exports. Obviously, exports intended for Ethiopia are shown as destination Djibouti due to several factors internal to Ethiopia which is leading to trade diversion to Djibouti. The bilateral trade is to be viewed in conjunction with India’s trade with Djibouti, which is the entry port for Ethiopia.  The table at Annexure II gives a more realistic picture of the bilateral trade with Ethiopia during the past six fiscal years for which data is available. 

In the past few years, Indian exports to Ethiopia faced unfavourable conditions like increase in the price of steel in the international market which is a major item imported from India and penetration of low-priced Chinese goods into Ethiopian market.  Exports from India consist mainly of primary and semi-finished iron and steel products, drugs and pharmaceuticals, machinery and instruments, manufactures of metal, food items, plastic and linoleum products, paper and paper products, rubber manufactured items, yarns and textiles, machine tools, glassware, cosmetics and electronic goods.  

India’s annual imports from Ethiopia had been averaging around US$ 1 million till 1999-2000.  In 2007-08, these increased to US$ 13.6 million. During 2007-08, major imports by India from Ethiopia were: raw hides and skins, pulses, raw cotton, spices, leather and scrap metal.    

3.       Agreements: A Trade Agreement between the Government of India and Ethiopia was signed on March 6, 1997 at New Delhi during the visit of Prime Minister Meles Zenawi and it set up a Joint Trade Committee (JTC). Meeting of the first JTC was held in Addis Ababa on February 25-26, 1998, while the second JTC was hosted in New Delhi on March 21-22, 2001.  The third JTC was held in Addis Ababa on July 1-3, 2002, whereas the fourth JTC was held in New Delhi on 5^th June 2006. In pursuance of the agreement during the 4th JTC meeting, delegations from CHEMEXCIL, IL&FS and NIIT visited Addis Ababa in September 2006 and a delegation from the Council of Leather Exports visited Ethiopia from 28-30 October, 2007.  A delegation from Kerala-based M/s Kanan Devan Hills Plantations visited Ethiopia in May 2007 and held meetings with Ethiopian ministers and senior officers.   

4.       5^th JTC Meeting: The 5^th India-Ethiopia Joint Trade Committee Meeting was held in Addis Ababa on 7^th October, 2008, the Indian delegation was led by H.E. Shri Jairam Ramesh, MOS (Commerce & Power), the delegation included the representatives from ILFS, EXIM Bank, TCIL, ECGC, IRCON, KEC International, Kanan Devan Hills Plantations, BHEL, NIIT, Tata International Limited and Sanik Coal Mining PLC. The two sides reviewed the progress of bilateral trade and implementation of the 4^th JTC Meeting, explored new areas of cooperation and discussed ways and means of further enhancing trade and technical cooperation between the two countries.  The areas of cooperation identified were telecommunication, agriculture, water resources, pharmaceuticals, chemicals & allied products sector, textiles, leather, education, science & technology, IT, Power, energy & infrastructure projects, renewable energy, standardization, quality assurance, accreditation and metrology.  At the end of the meetings the two sides signed Agreed Minutes of the fifth India-Ethiopia JTC Meeting and the 6^th meeting of JTC will be held in New Delhi in the year 2010.  

A bilateral Investment Promotion and Protection Agreement (BIPPA) was signed on July 5, 2007 during the visit of H.E. Mr. Pranab Mukherjee, External Affairs Minister to Ethiopia to strengthen the two countries relation in the economic and investment areas. 

The first round of Double Taxation Avoidance Agreement (DTAA) negotiations with Ethiopia was held in New Delhi on 24-28 July 2006 and it will be concluded very soon. 

During the India-Africa Forum Summit, the Prime Minister Dr. Manmohan Singh announced the Duty Free Tariff Preference Scheme (DFTP) for LDCs. Ethiopia was among the first countries that has acceded to the DFTP Scheme
There are various bilateral and commercial agreements which have been signed between the two countries.  These are listed in Annexure III. 

5.         Joint Business Council (JBC):  A Joint Business Council was established through an agreement signed in Addis Ababa on 24.6.1997 between FICCI/ASSOCHAM on the Indian side, and the Ethiopian Chamber of Commerce on the Ethiopian side.  Its first meeting was held in Addis Ababa in February 1998 along with the first JTC.  The 2nd JBC Meeting was held in New Delhi in March 2001 along with the 2nd JTC.  The third JBC meeting was to be held along with the 4th JTC in June 2006 in New Delhi, but there was no business delegation from Ethiopia at that time and it was postponed.   FICCI has not taken any further initiative on the JBC but is organizing and India-Africa Business Meeting in New Delhi in January 2009.       

6.         Potential areas of cooperation: There is potential for increased trade and joint ventures in areas such as agriculture and agro-processing industries, floriculture, commercial farming of oilseeds, pulses and lentils, textile and garments, leather and leather products, IT sector, drugs and pharmaceuticals, packaging and woven sacks, etc.  Other areas having potential are iron and steel, engineering goods and machinery, yarns, plastic and paper products, mining, sugar production, SMEs, etc. There are emerging opportunities in infrastructure projects in roads, power, telecommunications and water resources, gas exploration, wind-based energy, hydropower projects, sugar industry, machinery and engineering goods, and in general trade. Many public enterprises are on offer for disinvestment by the government. The Indian company, M/s i-flex, has secured an IT project for banking computerization from United Bank in February 2006. Earlier, in 1996 it had done similar work for Dashen Bank.  Infosys and Satyam are represented for some of their software applications through a local company.  

Ethiopia is known for its bright sunshine and called the country of ‘13 months of sunshine’. There is, therefore, ample scope for cooperation in the area of solar energy and to supply solar equipment. Sericulture is a new area which is catching up, specially in the rural areas of some regional states. In June 2005, the National Silkworm Seed Organisation (NSSO) under the Central Silk Board supplied, free of cost including free air-freight, 5 tons of planting materials of mulberry cuttings and 15,000 dfls of mulberry silkworm seed.

 7.         Ministerial level visits from India- January 2007:

(1) H.E. Mr. Pranab Mukherjee, External Affairs Minister, visited Ethiopia from 3-6 July, 2007.  He was accompanied by Shri Nalin Surie, Secretary (West), Smt. Narinder Chauhan, JS (E&SA), Shri Dinkar Khullar, JS(WA), Shri Vikram Misri, Director (EAMO) and Shri P. harish Director (XP) and 4 members of Indian press. EAM met President, Prime Minister, Foreign Minister, Minister of Trade & Industry, Finance Minister, Minister of Transport & Communications and held bilateral discussions.  EAM inaugurated the Tele-Education & Tele-Medicine centers under the Pan African E-Network Project along with H.E. Mr. Tefera Walwa, Minister of capacity Building.  EAM also met Ambassador Teshome Toga, Speaker of Lower House of Ethiopian parliament and addressed the Standing Committee on Foreign, Defense and Security Affairs and the Ethio-India Friendship Forum of the Ethiopian parliament.  During the bilateral meeting with H.E. Mr. Seyoum Mesfin, Foreign Minister, EAM signed 5 agreements and also announced a Line of Credit of US$640 million for development of sugar industry in Ethiopia.  Training slots under ITEC were also increased from 25 to 50.  EAM also announced donation of a CT scan machine for Black Lion Hospital.  He also met Prof. Alpha Oumar Konare, Chairperson of the African Union Commission and discussed India-Africa partnership. 

(2) H.E Dr. H. S. Anand, Secretary, Ministry of Housing and Urban Poverty Alleviation, Government of India visited Ethiopia on 15^th April, 2008.  He was accompanied by eight- member Indian delegation, which consisted of representative of the Building Material and Technology Promotion Council (BMTPC) and Housing & Urban Development Cooperation (HUDCO). 

(3) The Minister of State for External Affairs Mr. Anand Sharma visited Addis Ababa in January 2008 to participate in the AU Summit.  He met with the Prime Minister Meles Zenawi and state Minister for Foreign Affairs Dr. Tekeda Alemu.  He also visited Addis Ababa in August 2008 as SEPM to seek Ethiopia’s support at the Board of Governors Meeting of the IAEA.  He called on the Prime Minister and the Foreign Minister. 

(4) H.E. Shri Jairam Ramesh, MOS (Commerce & Power) visited Ethiopia from 5-7 October, 2008 to participate in the India-Ethiopia Joint Trade Committee Meeting. 

 8.        Ministerial level visits from Ethiopia- January 2007:

(1)H.E. Dr. Kassu Illala, Minister of Work and Urban Development, visited Delhi on 29th May 2007 and discussed matters relating to development of SMEs in Ethiopia.

2) A six member delegation from the Oromia regional State of Ethiopia led by H.E. Mr. Shiferaw Jarsso, Chief Government Whip visited India from 24-29 September, 2007 for a study tour in the field of Agricultural Development Irrigation Schemes and Improved Seed Technologies

3)H.E. Mr. Mekonnen Manyazewal, State Minister of Finance and Economic Development, visited New Delhi and signed an agreement with EXIM Bank on 4.10.07 for release of US$122 million, representing the first tranche of US$640 million LOC extended by India for the development of sugar industry in Ethiopia.

(4) H.E. Mr. Alemayehu Tegenu, Minister of Mines and Energy and Mr. Abiy Hunegnaw, Head Petroleum Operations Department of Ethiopia visited India from 5-9 November, 2007 to participate in the India-Africa Hydrocarbon Conference which was organized by Federation of Indian Chambers of Commerce and Industry (FICCI) at New Delhi

(5) The Ethiopian Prime Minister H.E. Meles Zenawi led a 10-member official delegation to the 4^th International Conference on Federalism at New Delhi on 5-7 November, 2007.  During the visit, Prime Minister Meles Zenawi met Dr. Manmohan Singh, Prime Minister of India, Shri Anand Sharma, Minister of State for External Affairs, Smt. Sonia Gandhi, President of Indian National Congress and held bilateral discussions.  The CII organized a meeting of Indian businessmen with Prime Minister Meles Zenawi for increase of trade and investment.  Prime Minister Meles Zenawi also utilized the visit to meet the representatives of various universities to offer training to Ethiopian students through satellite and other learning technologies as a measure to improve the tertiary education in Ethiopia.   

9.         Ethiopian Ministers visits to India in 2008: 

(1)  H.E. Ato Girma Birru, Minister of Trade & Industry visited India to participate in the CII Partnership Summit at New Delhi in January 2008

(2) A 13 member delegation from Ethiopia led by H.E. Mr. Tadesse Haile, State Minister of Industry participated in the CII-EXIM Conclave on India Africa Project Partnership 2008 in New Delhi from 19-21 March, 2008. H.E. Mr. Tadesse Haile spoke on “Skills Development: For equal opportunities.”  During the Conclave, a Memorandum of Understanding also signed between the Ministry of Trade and Industry, Government of Ethiopia and the Department of Commerce, Ministry of Commerce and Industry, Republic of India to enhance the cooperation in leather industry through technology and market collaborations.            

10.   Regional Symposiums on “Doing Business with India”:  For strengthening the cooperation between the Regional States of Ethiopia and India, the Embassy took the initiative to bridge the information gap between business sectors by trying to bring businessmen together on common platforms and through increased exposure to each others market.  The first and second regional symposiums on “Doing Business with India” were organized for Tigray state in Mekele on 5^th April, 2007 and for SNNP’s Regional State in Awassa on 3rd December 2007 respectively.  The 3^rd Regional Symposium on “Doing Business with India” for the Amhara National Regional State held at its capital city Bahir Dar on 31st October, 2008.  The Indian delegation was led by H.E. Mr. Gurjit Singh, Ambassador of India and included a ten-member Indian business delegation in the areas of small and medium enterprises, ICT, paper products, pharmaceuticals, film distribution, telecommunications, agriculture, floriculture and the like.  More than 150 business persons from Bahir Dar attended the symposium.  Various Indian companies’ catalogues were also distributed to the business people.

11.      EXIM Bank Line of Credit:  India has approved an EXIM Bank line of credit worth US$ 65 million to Ethiopia for a power transmission and distribution project under the rural electrification programme.  India had not given any line of credit to Ethiopia and this was the first such request made by the country.  Ethiopia agreed on a US$640 million loan on July 5, 2007 in Addis Ababa during the EAM’s visit. This is the largest bilateral LOC extended by India and was the first to be divided into a five year disbursement scheme.   India will give the loan in the next five years to support Ethiopia’s sugar industry.  H.E. Mr. Mekonnen Manyazewal, State Minister of Finance and Economic Development, visited New Delhi and signed an agreement with EXIM Bank on 4.10.07 for release of US$122 million, representing the first tranche of US$640 million LOC.  The second tranche of US$166 million is now on offer to Ethiopia.

12.      Trade promotion activities:  The Embassy has played a proactive role in catalyzing 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 fairs and exhibitions, Buyer-Seller Meets, contact promotion programmes, product promotion programmes in India and further these efforts strengthen the dialogue of the Ethiopian delegations with the SMEs in India. 

13.     The Largest Indian Trade Exposition in Ethiopia: The largest ever Indian trade exposition took place at the Millennium Addis Chamber International Trade Fair.  More than 30 Indian companies were participated including Tata International, HCL Infosystem, RP Infosys and KVIC.  The Confederation of Indian Industry (CII) and Indian Trade Promotion Organization (ITPO) organized it. India was given the prime recognition among all foreign participants and an Indian company Lucky Exports won the third prize among all stands.   Indian participation was positively commented for its business like approach by all including Minister of Trade and Industry, Mayor of Addis Ababa and President of Addis Ababa Chamber of Commerce & Sectorial Associations.

India Day was celebrated on February 22, 2008 at the Fair Ground.  At a special symposium keynote address was delivered by the President of the Chamber of Commerce, who spoke about the strong and abiding links between India and Ethiopia and how India is a model for private sector development for them; the Economic Advisor to the Prime Minister Ato Neway Gebre-ab (in the rank of Cabinet Minister), who emphasized the growing cooperation with India and sought closer links in the private sector;  Minister of State for Trade and Industry, Mr. Ahmed Tusa, who spoke about his Government’s support to closer cooperation with India.  Mr. Gurpal Singh, Deputy Director General of CII and Ambassador of India also addressed the symposium, which was followed by promotional activity and business to business meetings.

14.       An Exhibition-cum-Seminar on Low Cost Housing: An Exhibition-cum-Seminar on Innovative Building Materials and Construction Technologies for Sustainable Housing took place from April 15-16, 2008 at Ethiopian Conference Center, Addis Ababa organized by the Embassy of India in collaboration with the Ministry of Housing & Urban Poverty Alleviation, Government of India and the Ministry of Works and Urban Development, Government of Ethiopia.  The Exhibition showcased the commercial viability of manufacturing technologies of composite building material and machinery developed in India for production of building materials components for housing with the use of agro industrial waste and natural fibers.  At a special symposium on April 15, 2008, H.E Dr. Harjit Singh Anand, Secretary, Ministry of Housing and Urban Poverty Alleviation, Government of India,  the Ambassador of India H.E Mr. Gurjit Singh and H.E Mr. Arkebe Oqubay, State Minister of Works & Urban Dev’t, Government of Ethiopia delivered the keynote address. Many others presentations were made by Indian and Ethiopian experts on low cost housing during the symposium and more than 200 participants attended the symposium.

15.       Indian investment in Ethiopia: Indian Investment in Ethiopia is rapidly increasing, with USD 1.4 billion of new investment in 2008.  Till November 15, 2008, 379 private Indian companies have obtained investment approvals from the Ethiopian Investment Authority, with a total capital of US$3.6 Billion.  These cover different sectors like agriculture and floriculture, engineering, plastics, consultancy and ICT, water management, cotton and textile, leather, education, hotel and restaurant services, vehicle rentals, pharmaceuticals and health care.  The Indian investors recognize the importance of Ethiopia and the opportunities for value creation.  Indian companies are supporting the creation of new infrastructure, manufacturing and services in Ethiopia.  An analysis of Indian investment in Ethiopia is at

Annexure V. 

                             Source: Ethiopian Investment Agency
                            The above figures are updated till January, 2009.

Minister of Trade & Industry, H.E Mr. Girma Birru, on Sep 22, 2007 inaugurated a new pharmaceutical facility M/S Cadila Pharmaceutical, at Akaki near Addis Ababa.  The total cost of the project amounts to around USD 10 million and has the capacity to manufacture 390 million tablets, 165 million capsules and 144 million liters per year.  Cadila Pharmaceutical (Ethiopia) PLC is a joint venture between Cadila Pharmaceuticals Ltd, India and Almeta Impex PLC, Ethiopia.

16.  Infrastructure Projects:  During the last few years, Indian companies have won various government contracts in Ethiopia against tough international competition.  Indian companies from public and private sectors have secured several contracts in the infrastructure sector, including consultancy works, in roads, power, telecommunications, water resources, and cement production. IRCON and M/s SMS Infrastructure have secured contracts in road construction; RITES, International Consultants and Technocrats (ICT), Consulting Engg. Services, Span Consultants, LEA Associates in road studies and consultancy; KEC International, BHEL, Jyoti Structures, IRCON, Kalpataru Power Transmissions in power transmission, distribution and sub-stations; TCIL in telecommunications; WAPCOS and ICT in feasibility studies for micro dams and irrigation projects; ACCand HOLTEC in consultancy for expansion of cement production.

Gas Authority of India Ltd. (GAIL) had been short listed as one of the companies to submit bids for development of Calub and Hilala gas fields, which have total estimated reserves of 4.0 trillion cubic feet to last for about 30 years. Eventually, it was awarded to M/s Petronas of Malaysia. Indian companies have started showing interest in mining of various minerals.  RITES made serious bid for concessioning of Ethio-Djibouti railways for operation and management for 25 years to a private concessionaire, but lost to the South African company COMAZAR but further COMAZAR not showed their interest to implement the project and now discussions are going on with other parties.

17.     Pilot Project on Tele-medicine and Tele-education: India is providing tele-medicine and tele-education to all countries of Africa under the Pan African e-Network Project.  Ethiopia is the first beneficiary under a Pilot Project which is already under operation and was inaugurated by H.E. Mr. Pranab Mukherjee, External Affairs Minister of India along with H.E. Mr. Tefera Walwa, Minister of Capacity Building in July 2007. Addis Ababa University and the Black Lion Hospital are the respective nodal centers for tele-education and tele-medicine, with remote centers located at Haromaya University and Nekempt Hospital respectively. The entire cost of US$ 2.13 million is being borne by the Government of India as a grant. TCIL is the implementing agency of the project in all countries of Africa, including Ethiopia. IGNOU has registered 34 eligible students from the two educational institutes for the regular MBA course, which started from March 2007.  Doctors at the Black Lion Hospital in Addis Ababa have been holding regular tele-medicine consultations for patients with the CARE Hospital in Hyderabad. The consultations are currently in the areas of cardiology, neurology, pathology, dermatology and radiology.

18.     Textile/Garments:The Northern India Textile Research Association (NITRA), Ghaziabad and Pearl Academy of Fashion (PAF), New Delhi were jointly awarded consultancy project in June 2004 to set up the Ethiopian Textile and Apparel Institute (ETAI) to provide support to this sector.  It is under implementation. Another proposal to develop handloom sector in Ethiopia has been submitted by NITRA to the Ministry of Trade and Industry in Addis Ababa. NITRA has also executed a project to train local Sewing Machine Operators for capacity building in the garment industry.  In October, 2007 NITRA has also signed an agreement for Human Resource Development of TAI staff.  The MOTI has sort a twining arrangement for the ETAI with and Indian Institution.  A special focus on seeking investment from India in this sector particularly in yarns is being made. 

19.           Solar energy rural electrification:  In 2005, Presidents of the regional states of Afar, Benshangul Gumuz, Gambella, and Somali visited the Barefoot College in Rajasthan and saw the solar energy rural electrification and rooftop rainwater harvesting projects.  34 villagers from remote villages of these states ('barefoot soldiers') were selected and sent for six-month training.  On return they have applied their knowledge to provide electricity by using solar energy in 17 remote villages.   An Association of trainees of Bare Foot College has been formed and three rural women are currently under going a six month programme at Tilonia under ITEC. 

20.           India Business Forum: The IBF was launched by Shri Gurjit Singh, Ambassador of India soon after his arrival in Addis on 30^th October, 2005.  The Embassy celebrated the 2nd anniversary of the India Business Forum (IBF) in Addis Ababa on 30 October, 2007 in the presence of H.E. Mr. Neway Gebreab, Economic Adviser to the Prime Minister, H.E. Mr. Tadesse Haile, State Minister of Trade and Industry, H.E. Mr. Ahmed Tussa, State Minister of Trade and Industry and Honorable Mr. Harka Haroye, Member of Parliament and Chairman of the Competition Commission. 

During the visit of MOS for Commerce and Power, H.E. Mr. Jairam Ramesh to Addis Ababa the first full-fledged meeting of the IBF took place on October 5, 2008, in the Embassy premises which was attended by more than 50 Indian business persons. 

21.   Symposium for Parliamentary Standing Committee on Trade & Industry and Infrastructure: India and Ethiopia have substantiated their longstanding friendship by enhanced economic cooperation.  This consists of growing bilateral trade, greater investment by Indian companies in Ethiopia and participation by Indian companies in the infrastructure development.  As a follow-up to these multi-faceted and strong economic and business engagements, the Embassy of India organized various symposia with various parliamentary standing committees.  These have included the Standing Committees on Trade & Industry and Infrastructure on November 26, 2007 and November 17, 2008 respectively.  The symposiums were received warm appreciation from the Chair and Deputy Chair as well as all the members of the Standing Committees.  Many of them noted that the Indian Embassy was the only Embassy making an effort to sensitize the Members of Parliament in various committees and others said that India is a model of choice for them and they expressed their desire for continuing these initiatives in future.

22.           A Capacity Building Initiative with Designers: Embassy of India organized a series of workshop for Ethiopian designers with the aim of encouraging design/crafts and enhancing the fashion and lifestyle industry in Ethiopia.  The Initiative was launched on August 30, 2007 and the workshops began on October 15, 2007 and concluded on 3^rd November, 2007 with 50 participants who were divided into two categories: Fashion Women’s and Lifestyle Products, which was further divided into two subcategories of Lifestyle Homes & Lifestyle Personal Accessories.   The Initiative brought 3 experts from Pearl Fashion Academy, New Delhi and along with Dr. Neeti Sethi Bose, the Project Coordinator, a series of three intensive hands-on workshop were conducted where the participants went through exercise to learn pattern making and construction, necessity of designing, design basics, exploration of materials, the creative process, finishing and styles, understanding trends and markets, finding and translating inspirations into products and facilitated working with groups.  The workshop also invited experts and people from the industry in India and Ethiopia, to interact with participants, share experiences and present new ideas.  The workshops were very successful and proceeded in providing participants with basic understanding of design and designing for the contemporary market; it also encouraged designers to look at design, materials, markets and consumers from a different perspectives and has initiated a creative energy that is waiting to take shape into new garments and products they will henceforth design.  Further 4 designers went to India for training in March 2008.

*******
December 2008

Annex. I 

Bilateral trade between India and Ethiopia  (Indian data) 

 Source: Directorate General of Commercial Intelligence and Statistics (DGCIS), Kolkata 

Bilateral trade between India and Ethiopia  (Ethiopian data)
(Ethiopian fiscal year July 8^th to July 7^th)

 Source: Ethiopian Customs Authority 

Annex. II

India's Year- wise Trade with Ethiopia and Djibouti (2002-2009)                       

                Source: DGCIS

 Annex. III 

            Important Commercial & Economic Bilateral Agreements: 

• Bilateral Air Services Agreement signed on 3.8.1967.  In pursuance of this, MoUs were signed on 27.10.1972, 14.10.1993 and 29.1.2004 to provide flight rights to carriers of the two countries, frequency of service etc.
• Economic and Technical Cooperation Agreement signed between the two countries in 1969.
• Trade Agreement between the Government of the Republic of India and the Government of the Federal Democratic Republic of Ethiopia signed at New Delhi on 6^th March 1997.
• Agreement between FICCI/ACCOCHAM and Ethiopian Chamber of Commerce to establish a Joint Business Council signed at Addis Ababa on 24.6.1997.
• MoU on Cooperation between the Electronics and Computer Software Export promotion Council (ESC), New Delhi and Addis Ababa Chamber of Commerce, Ethiopia on 26^th February 1998.
• MoU between India Trade Promotion Organisation (ITPO) and Ethiopian Export Promotion Agency (EEPA) signed at Addis Ababa in March 2001.
• Institutional Agreement of Cooperation between Confederation of Indian Industry (CII) and Ethiopian Private Industries Association (EPIA) signed at Addis Ababa on 17^th January 2000.  This MoU was renewed on 26^th February 2002.
• Institutional Agreement of Cooperation between CII and Addis Ababa Chamber of Commerce (ACC) signed at Addis Ababa on 26^th February 2002.
• MoU on promoting bilateral trade/information technology between Indo-African Chamber of Commerce and Industries and Addis Chamber of Commerce signed at Addis Ababa on 26^th February 2002.
• Agreement on Technical Cooperation in Micro Dams and Small Scale Irrigation Schemes signed at Addis Ababa on 3^rd July 2002.
• MoU on cooperation between EEPC and Addis Ababa Chamber of Commerce during the Indian engineering goods exhibition INDIATECH signed at Addis Ababa on 17.4.2003.
• MoU on promotion of Micro and Small Industries in Ethiopia between National Small Industries Corporation (NSIC) and Federal Micro and Small Enterprise Development Agency (FeMSEDA) signed at Addis Ababa on 12.7.2004.
• MoU between ASSOCHAM and the Ethiopian Chamber of Commerce signed at Addis Ababa on 11.3.2005.
• India and Ethiopia have signed a Bilateral Investment Promotion and Protection Agreement (BIPPA) on July 5, 2007 during the visit of H.E. Mr. Pranab Mukherjee, External Affairs Minister to Ethiopia to strengthen the two countries relation in the economic and investment areas.

ANNEXURE IV

(a)  Visits from India:

(1)  A delegation from Tata Chemicals visited from 18-22 February 2007 to study possibilities of investments in the area of salt, aluminium sulphate and sulphuric acid through acquisition of public enterprises on offer for disinvestment.

(2) Six Indian companies representing diverse sectors participated in the 11^th Addis Chamber International Trade Fair from 22-28 February, 2007.  Their participation has been organized by the India Trade Promotion Organization (ITPO).  Besides, some Indian companies have also arranged their participation on their own.

(3)  Dr. Kirit Parikh, Member of Planning Commission visited Addis Ababa in March-April 2007 for a Conference of African Finance Ministers and held bilateral meetings with Ethiopian ministers and Chairperson of AU Commission. 

(4) A delegation from Kerala-based M/s Kanan Devan Hills Plantations visited Ethiopia in May 2007 to see and discuss possibilities of tea plantations and processing. In addition, a three member team of Indian experts is expected to visit Ethiopia later this year to study problems of soil salinity and for increasing agricultural output.

(5) In December 2007, Sanik Coal Mining Pvt. Ltd., an Indian company has signed an agreement with Ministry of Mines and Energy to establish a US$451 million Potash mining project in Afar Region of Ethiopia.  The company proposes to transport the potassium deposits to Djibouti to export the same to India.  

(6) Council of Leather Exports (CLE) delegation visited Addis Ababa from 28-30 October, 2007.  The delegation comprised of five companies manufacturing leather goods and was led by Dr. K. Elangovan, Executive Director (CLE). 

(7) More than 30 Indian companies participated in the 12^th Addis Chamber International Trade Fair held from 21-27 February, 2008. Major Indian companies like Tata International, HCL Infosystems Ltd., Bharat Rassayan Ltd., RP Infosystems (P) Ltd., Swastik Polymers were participated. Several small and medium enterprises participated under the theme of Enterprise India mooted by the Confederation of Indian Industry (CII) & Indian Trade Promotion Organization (ITPO). Besides this clusters of companies were participated through the Export Promotion Council of India and Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council (CHEMEXCIL). India Day was celebrated on February 22, 2008 during the fair. 

(8) A 3-member delegation from Tata International led by the company President R. Balasubramaniam visited Ethiopia in July 2008 and held talks with Prime Minister Meles Zenawi to discuss future investment possibilities in the country.  The delegation met officials from the Textile and Leather Department, including State Minister of Trade and Industry to discuss leather sector development. Tata International Limited has opened an office in Addis Ababa on June 16, 2008.

(9) A 17-member delegation from the CII, All India Skin & Hide Tanners and Merchants Association and Finished Leather Manufacturers and Exporters Association also visited Ethiopia from 18-20 August, 2008, in connection with exploring the possibility of sourcing semi-processed leather and joint ventures in Ethiopia.

(b) Visits from Ethiopia:

  1) A four-member delegation from Ethiopia participated in the INDIASOFT 2007, which was held in at Hitex International Exhibition Centre, Hyderabad on 9^th and 10^th January, 2007.

 (2) Mr. Eyussus Work Zafu, President of Addis Ababa Chamber and Mr. Frehun, Head of Construction Sectorial Association visited the International Engineering Trade Fair (IETF) held in New Delhi from 13-16 February 2007. They were invited by the CII.

(3) Mr. Kebede Shiferaw, Director for the Federal Micro and Small Scale Enterprises Development Agency and Mr. Gebregzi Tsehaye, President of the Ethiopian Chamber of Sectorial Associations visied India from 10-14 September, 2007 to participate in the first Sanjaya Lall Memorial Conference on India-Africa Cooperation in Industry, Trade and Investment.

(4) A two-member delegation from Ethiopia participated in the CAPEXIL Reverse Buyer-Seller Meet in New Delhi in January, 2008.

(5)M/S. Health care Food manufacturing Co. from Ethiopia Participated in the Africa-CIS-India Agri & Sea Food Meet which took place in Mumbai and New Delhi from 19-22 February, 2008.

      (6) A two-member delegation from Ethiopia participated in the CHEMICAL MEET 2008 in Mumbai in March 2008

      (7) M/S. Corporate Computer Center (3C) PLC from Ethiopia participated in INDIASOFT 2008 in Hyderabad in March 2008.

 ANNEXURE IV

Analysis of Indian Investment flow in Ethiopia 

In the last few years the economic and commercial relationship has attained wider dimensions in which Government of India’s soft loans, private Indian investments, capacity building and human resource development have been at the core.  The economic relationship between the two countries is moving forward rapidly, India today is becoming the single largest foreign investor in Ethiopia with more than $4.1 billion in private sector investment.  This is mainly in the area of floriculture and agriculture, mining, manufacturing and services.Similarly, the Government of India has strongly supported Ethiopia’s development goals by providing more than US$700 million concessional lines of credit for rural electrification and the expansion of the sugar industry which is expected to generate nearly 100,000 new jobs, create infrastructure and provide greater momentum to Ethiopian exports of sugar and power thus strengthening Ethiopia’s foreign exchange earning capacity.    The commercial spin off announcement of the Line of Credit was very significant, various Indian companies were introduced to Ethiopian market and out of goodwill generated other Indian companies are given preference in implementing the project financed by Ethiopia.   

It is significant to also note that while Sugar project and its finance was being negotiated the Indian private sector picked up the signals of positive signs for the development of the economy in Ethiopia and its welcome to foreign investors as well as the signs from the media that India was considering a large line of credit.  During the period 2006-07 FDI from India committed to Ethiopia almost quadrupled to nearly $153 million and by the time the loan agreement was signed and made public earlier this year we noticed that the largest surge in private sector Indian investment in Ethiopia took place with over $700 million coming in 2007-08.  Thus in the last 4 years the surge of India FDI has risen from $40 million in 2005-06 to $153 million in 2006-07 and a further $706 million in 2007-08 and 2008-09 (till December 2008) it was US$2.4 billion which has a total committed investment in Ethiopia of $4.15 billion with 414 projects.   

 Out of the $4.15 billion covering 414 projects most of which have come in the last two years, 84% are still in the pre-implementation stage.  Only 1% of the Indian investment with a capital of about $35.4 million is in the implementation stage whereas 15% which is 111 projects are under operation.  Sector-wise, the largest numbers of companies, 204, are in manufacturing correctly reflecting the direction in which the Ethiopian economy is moving.  Though the highest investment is in agriculture and floriculture where 96 companies with a capital of about $2.35 billion have registered.  40 companies are in real estate and related business activities while 27 are in the construction sector.  15 companies are engaged in the education sector.  The two significantly large investments which have been committed last year are for agriculture, mining and hotel projects which have considerably boosted the figures.          

  A study of the figures also shows that while initially the investment in Ethiopia has been from small and medium enterprises of India it is now that the larger enterprises and brands are looking at Ethiopia. However, there is a point of caution and this is to note that a very high proportion, 84% of Indian companies who have invested in Ethiopia are still in the pre-implementation stage.  These companies require a very high degree of nurturing, problem solving and on the ground satisfaction and support. 

Apart from soft loans from India a new trend is emerging from India for financing various projects in Ethiopia.  In the year 2008 various Indian companies received Suppliers Credit amounting to USD 100 million through Indian commercial banks supported by the Export Credit Guarantee Corporation of India (ECGC) to execute various electricity projects in Ethiopia. At the same time, the development of trade with India is nearly reaching its target of $500 million per annum but most of this serves the growing demand in Ethiopia for goods and services.  The biggest import from India is of iron and steel products which contribute to the building industry and there have been till recently large imports of cement. Concurrently, nearly $500 million worth of projects are being executed by Indian companies under internationally financed tenders mainly in the infrastructure sector.

I) Total FDI/Joint Ventures value by 8 top countries 

 II) Analysis of Indian Investment Projects in Ethiopia 

 III) Indian Investment projects in Ethiopia

 Source: Ethiopian Investment Agency
The above figures are updated 15^th of September, 2008.

 IV) Region-wise distribution of approved Indian Investment projects: 

            Addis Ababa                :           200 companies  
            Oromia                        :           138
            Multi-regional               :              60
            SNNPR                       :                6
            Tigray                          :                4
            Dire Dawa                   :                3
            Harari                          :                1
            Amhara                       :                1
            Benshangul Gumuz    :                1                                    (January 2009)

 II) India Line of Credit to Ethiopia