New Delhi, Jan 6 (NationPress) The visit of Prime Minister Narendra Modi to Ethiopia in December 2025 marked a significant diplomatic milestone, culminating in the elevation of bilateral relations to a 'Strategic Partnership'. This visit has set a clear roadmap for prioritized engagement over the next decade.

India–Ethiopia trade relations have matured into a multifaceted partnership, characterized by robust merchandise trade, substantial Indian investments in Ethiopian infrastructure and industries, and a strong framework for development cooperation rooted in South–South solidarity, as highlighted in an article from the Times of Oman.

Both nations regard each other as gateways to larger regions: India connects to the African Continental Free Trade Area, while Ethiopia serves as a bridge to the Indian Ocean and Asian markets, lending a strategic dimension to their commercial relations.

For the fiscal year 2024–25, Indian official statistics estimate bilateral trade at approximately 550.19 million US dollars, with India exporting goods worth 476.81 million US dollars and importing 73.38 million US dollars from Ethiopia. These figures emphasize India's significant footprint in the Ethiopian market and highlight the potential for increased Ethiopian exports to India.

India stands as one of Ethiopia’s top trading partners, reflecting the resilience of their economic ties.

Key Indian exports comprise pharmaceuticals, medical devices, iron and steel, machinery, vehicles and components, electrical goods, chemicals, plastics, and various consumer items, including textiles and food products. This diverse export portfolio supports Ethiopia’s industrialization goals and infrastructure development, simultaneously reinforcing India's position as a dependable supplier of affordable medicines and technology.

Although imports from Ethiopia are lower in value, they hold strategic importance and focus on agricultural and natural resource-based products. India sources pulses, oilseeds, spices, leather goods, flax yarn, and select mineral consignments from Ethiopia, thereby integrating Ethiopian producers into both Indian and global value chains.

Beyond trade, India has emerged as one of the largest foreign investors in Ethiopia. Assessments indicate that Indian firms rank among the top three foreign investors, with approved investments nearing 5 billion US dollars and land lease agreements covering over 600,000 hectares nationwide, particularly in commercial agriculture and related sectors.

In 2024 alone, at least 11 Indian companies invested in diverse sectors such as agriculture, automobiles, iron and steel, information technology, and textiles, which demonstrates continued investor confidence in Ethiopia’s long-term growth potential, despite short-term economic fluctuations. These investments have significantly contributed to job creation, export revenues, and technology transfer in Ethiopia’s industrial parks and special economic zones, aligning with Ethiopia’s ambition to become a regional manufacturing hub.

India’s development cooperation framework is also pivotal in shaping the trade and investment landscape, particularly through concessional Lines of Credit provided by the Export-Import Bank of India.

The article notes that Ethiopia is one of the largest African recipients of Indian Lines of Credit, with sanctioned amounts exceeding 1 billion US dollars that have financed crucial projects in sugar production, power transmission, railways, and industrial infrastructure.

Examples include the Finchaa and Wonji Shoa sugar factories, along with Phase I of the Tendaho sugar project, which were financed under an EXIM Bank line of credit of approximately 640 million US dollars, marking one of the largest single lines of credit extended by India globally.