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According to RUNOKA (2016), “close relationships between Africa and early India have existed for more than two thousand years”. India has close relationships with African countries in terms of historical, cultural, geographical, political, economic and commercial aspects.

In this trade relation between the two countries, the chronic trade deficit has remained the dominant feature of Ethiopia’s external trade with India. Therefore, economic relations between Ethiopia and India are unequal and asymmetrical. The widening deficits in favor of India need the attention of both governments in order to sustain the trade relationships between the two countries. 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 investments 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. The trade imbalance remains a structural problem in the trade relations between the two countries. Indian agricultural investments in Ethiopia have positive impacts like providing job opportunities for many Ethiopians, technology transfer generate government revenue and bringing foreign currency.


Investment, Trade, laws, India, Ethiopia
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