India–Ethiopia Relations : Overview

Educational and Knowledge Cooperation

• Indian educators historically played a key role in shaping Ethiopia’s education system.
• Ethiopia served as a pilot country for the Pan-African e-Network Project.
• Continued collaboration with IIT Delhi for tele-education.
• Ethiopia sends a large number of students to India under government-funded scholarship programmes.

Investment and Economic Engagement

• Indian investments exceed USD 4 billion.
• Earlier focus on agriculture, now shifting toward:
  • Mining
  • Critical minerals
  • Rare earth elements
  • Gold
• Mining cooperation aligns with India’s clean energy and manufacturing needs.

Defence and Security Cooperation

• India established the Harar Military Academy in 1956.
• Ongoing military training support since 2009.
• Recent MoUs aim to expand:
  • Defence training
  • Capacity building
  • Defence exports

Why Ethiopia Matters

• Population: Around 109 million, making it one of Africa’s most populous countries.
• Economic Profile: Among Africa’s fastest-growing economies.
• Geostrategic Location: Situated in the Horn of Africa, critical for Red Sea security, regional stability, and Indian Ocean geopolitics.
• Institutional Importance: Hosts the headquarters of the African Union, enhancing its diplomatic weight.

Key Strategic and Economic Attractions

Manufacturing and Market Potential

• Possesses a growing manufacturing base and a large domestic consumer market.
• Acts as a potential manufacturing hub for Indian companies targeting African markets.

Energy and Infrastructure 

• Significant hydropower potential, positioning Ethiopia as a renewable energy leader in Africa.
• Ongoing efforts to diversify access to the Red Sea through Somaliland and Eritrea to reduce logistics dependence.

Political and Regional Context

• Emerging from civil conflict, with efforts underway to build national consensus.
• Balances internal reforms with regional ambitions, reflecting a push for strategic autonomy in trade and connectivity.

Challenges and Untapped Opportunities

Investment Barriers

• Concerns related to:
  • Foreign exchange availability
  • Taxation regime
  • Regulatory consistency
• Need to modernise agreements such as the Double Taxation Avoidance Agreement (DTAA).

Sectoral Opportunities for India

• Pharmaceuticals
• Agro-processing
• Light manufacturing
• Mining and mineral processing

Multilateral and Regional Cooperation

• Scope for deeper engagement through:
  • BRICS
  • G20
  • South–South Cooperation frameworks
• African Continental Free Trade Area (AfCFTA) offers:
  • Easier market access
  • Regional value chain integration for Indian firms based in Ethiopia

Conclusion

• India–Ethiopia relations are at a strategic inflection point.
• Strong political engagement, including the Modi–Abiy Ahmed meeting at the G20, has provided momentum.
• With targeted reforms, updated economic agreements, and strategic alignment, the partnership can evolve into a mutually beneficial, long-term collaboration supporting India’s Africa strategy and Ethiopia’s development ambitions.