Diplomatic Outreach: PM Modi's Ethiopia Visit Marks His Third Tour To Africa This Year

Just last month, Prime Minister Modi was in Johannesburg to attend the G20 summit. In July, he visited Ghana, followed by Namibia.

Africa is not only an abode to huge deposits of natural resources but also a pool of talent, offering a large, untapped market. For decades, the continent was treated as a colony. Now, it is seeking partnerships. This is where India stands out, as it is one of the few countries that has a reputation for providing tailor-made solutions that Africa desires, without being preachy or extractive.

The Prime Minister will soon be in Addis Ababa, the capital of Ethiopia, a country that is a civilisation in itself, providing connectivity to every possible African capital.

A few would recall that it was Modi who played a critical role in Ethiopia’s entry into the BRICS bloc in 2023 as a full member. The country’s location is critical for outreach to the Horn of Africa, which overlooks the Indian Ocean Region (IOR).

India-Africa Summit

Addis Ababa is the headquarters for the African Union (AU), which will play a significant role in the fourth edition of the India-Africa Summit. The summit will be held next year in India. The Prime Minister’s visit to Addis Ababa will, therefore, lay the foundation for the summit.

India’s relationship with Ethiopia is often overlooked. Only a few are aware that historical links between India and Ethiopia go back 2,000 years of recorded history. Trade between the two countries flourished during the Axumite Empire (first century AD). Later, in the sixth century AD, Indian traders traded silk and spices for gold and ivory through the ancient port of Adulis.

Today, India is Ethiopia’s second-largest trading partner, accounting for 23.7% of the African nation’s global trade. 

Unfortunately, this relationship between India and Ethiopia is neither spoken of nor written about enough.

In fact, Indian companies are among the top three foreign investors in Ethiopia. There are more than 675 Indian companies registered with the Ethiopian Investment Commission, with investments of over US$6.5 billion. Indian investors have created more than 17,000 jobs. About 48.3% of Indian investment is in the manufacturing sector.

Investments In Ethiopia

In 2024 alone, 11 Indian companies invested in Ethiopia, in sectors such as agriculture, automobile, and iron and steel, among others, giving way for opportunities to both big Indian players as well as small and medium enterprises (SMEs).

Besides, Indian investments in the textile sector have been at the forefront of foreign direct investments (FDI). India is also considered one of the top investors in the pharmaceutical sector. Ethiopia, in fact, can be an air transportation hub to reach out to almost every African capital.

India does not have deep pockets like China; and neither is it a one-party state. What India possesses is goodwill and a benign approach, which is non-exploitative in nature. Africa is a growing market that the Indian SME sector needs to tap into: what is needed is an aggressive strategy by the Indian private sector.

Modi’s Oman Visit

Following Ethiopia, the Prime Minister will also visit Oman, at a time when the ground looks set for the much-awaited bilateral trade deal. The India-Oman ties are critical, but have often been understated. Oman is a strategic partner of India. Besides, it is also a major interlocutor at the Gulf Cooperation Council (GCC), Arab League, and the Indian Ocean Rim Association (IORA).

The ties are rooted in geography, history, and culture, with people-to-people ties going back 5,000 years. Oman is crucial to India’s West Asia Policy and its oldest strategic partner in the region. Oman is India’s closest defence partner in the Gulf, and the only GCC country with which India conducts tri-service joint exercises.

Business, Investment Ties

It is not just history and strategic partnership that bind India and Oman. Business and investment ties are deep. There are over 6,000 India-Oman joint ventures present in the Gulf nation, adding US$7.5 billion to its economy in the form of the total capital investment over a long period, encompassing formal outward direct investment of US$675 million, the total value of all capital committed to joint ventures and third-country investments.

Oman is seeking additional investments from Indian investors for its special economic zones (SEZs). Oman-India Joint Investment Fund (OIJIF), a 50/50 joint venture between the State Bank of India and the Oman Investment Authority of Oman, was set up as a special purpose vehicle (SPV) to invest in India. It has made considerable investments. Oman is now looking for Indian investments in hospitality and startups, among other areas, to move forward with the vision of the Omani Sultan.

(The writer is a commentator on geopolitics and geoeconomics. Views are personal.)