By Groum Abate
Addis Ababa, March 23 (IANS) Ethiopia is becoming a major centre for Indian investment in Africa as companies seek new ventures in mining, textiles, leather, education and the hospitality industry in one of the world's most ancient nations.
Indian Ambassador Bhagwant Bishnoi said the volume of Indian investments in Ethiopia was expected to grow by $1 billion every year. Indian investment in Ethiopia was about $400 million some five years ago. Now it has reached almost $5 billion.
"We have committed Indian investment of $4.4 billion and, yes, we will take it to $5 billion this year and try to take it to $6 billion in the next year," Bishnoi told IANS in an interview.
"Indian investors have always had confidence in this country, but the confidence has gone up even more recently," he remarked.
Bishnoi attributed the large flow of investment to political stability, sound macro-economic policies and good governance in the east African country that was once a metaphor for famines and natural devastation.
With increasing private sector investments, economic relations between the two countries have moved forward in recent years. About 500 Indian companies have secured licences to invest in different areas. These investments cover sectors such as agriculture and floriculture, engineering, plastics, consultancy and ICT, water management, cotton and textile, leather, education, hotel and restaurant services.
Around Kombolcha Amhara Regional State, Spentex is setting up a spinning factory to produce around $700 million worth of yarn every year.
But "the trade relationship between the two countries has shown a mixed picture", the envoy told IANS.
India is an important source of imports for the Ethiopian market, accounting for up to $250 million worth of goods and services each year. That figure is growing 10 percent every year.
Exports from India consist mainly of primary and semi-finished iron and steel products, drugs and pharmaceuticals, machinery and instruments, manufactured metal, food items, plastic and linoleum products, paper and paper products, rubber manufactured items, yarns and textiles, machine tools, glassware, cosmetics and electronic goods.
However, Indian imports from Ethiopia, though increasing, are below expectation. "Ethiopia's exports to India are extremely small," Bishnoi said, adding, "it is something like $20 million or so per year".
Major Indian imports are raw hides and skins, pulses, raw cotton, spices and leather. Bishnoi said Ethiopia should take processed leather seriously as it has a huge demand in India.
India is sending a team of 16 specialists from the Indian Central Leather Research Institute to help the sector grow.
The ambassador said Ethiopian exporters should take advantage of the duty-free tariff preferential scheme India announced for all least developed countries in 2008.