The Bengal Chamber of Commerce & Industry organised an interactive session with His Excellency Mr. Asfaw Dingamo, The Ethiopian Ambassador to India on Friday, 25th November at the Chamber premises.

His Excellency Mr. Dingamo was welcomed by The BCC&I President, Mr.Sutanu Ghosh, who delivered the welcome address. The Ambassador was accompanied by Mr.Kiros Hailemariam, Counsellor –I, who also delivered, a comprehensive presentation on Ethiopia and investment opportunities by Indian Industry in Ethiopia. From the Chamber, Mr. Ardhendu Mandal, Chairperson of the International Trade Cell was also present. Amongst the attendees, there were many delegates from the existing investors in Ethiopia.

His Excellency Mr. Dingamo spoke most eloquently about the history and culture of Ethiopia, from its proto-historic emergence in world history, to the reign of the Queen of the Kingdom S’aaba, known in literature as Sheba, to its present day emergence as a developing power in the African vis-a-vis international perspective. He stated that Ethiopia is Africa's oldest independent country and its second largest in terms of population. Apart from a five-year occupation by Mussolini's Italy, it has never been colonised. It has a unique cultural heritage, being the home of the Ethiopian Orthodox Church - one of the oldest Christian churches - and a monarchy that ended only in the coup of 1974. It served as a symbol of African independence throughout the colonial period, and was a founder member of the United Nations and the African base for many international organizations. Ethiopia, officially known as the Federal Democratic Republic of Ethiopia is a Sovereign State located in the Horn of Africa. It shares a border with Eritrea to the north and northeast, Djibouti and Somalia to the east, Sudan and South Sudan to the west, and Kenya to the south. With nearly 100 million inhabitants, Ethiopia is the most populous landlocked country in the world, as well as the second-most populous nation on the African continent after Nigeria.

Some of the oldest evidence for anatomically modern humans has been found in Ethiopia, which is widely considered the region from which modern humans first set out for the Middle East and places beyond. According to linguists, the first Afroasiatic- speaking populations settled in the Horn region. Tracing its roots to the 2nd millennium BC, Ethiopia was a monarchy for most of its history. During the first centuries AD, the Kingdom of Aksum maintained a unified civilization in the region, followed by the Ethiopian Empire circa 1137. Ethiopia derived prestige with its uniquely successful military resistance during the late 19th-century Scramble for Africa, becoming the only African country to defeat a European colonial power and retain its sovereignty.

It was in July 1948, India and Ethiopia first established diplomatic relations at the level of legations. The relationship was raised to ambassadorial level four years later in 1952. India maintains an embassy in Addis Ababa and Ethiopia in New Delhi. The two countries have enjoyed close and friendly relations with India supporting Ethiopian developmental efforts while Ethiopia has supported Indian interests such as its claim to a permanent seat on the United Nations Security Council. India and Ethiopia share a common understanding on such issues as cross-border international terrorism, the need and direction for reform of the United Nations, and the importance of action on Climate Change.

He stated that trade between the two countries is expected to surpass $1 billion by 2017. Indian exports to Ethiopia consists of drugs and pharmaceuticals, steel, machinery, food items, plastic and linoleum products, paper, textiles, chemicals, transport equipment and steel. India's imports from Ethiopia include raw hides and skins, pulses, oil seeds, spices, leather and scrap metal. India is Ethiopia's second largest source of Foreign Direct Investments with investments amounting to $5 billion. Indian investments in Ethiopia are expected to be worth $10 billion by 2015 with India approving investments worth $4.78 billion in 2011.

He further stated that India and Ethiopia signed a Bilateral Investment Promotion and Protection Agreement in 2007 and a Double Taxation Avoidance Agreement in 2011 to promote mutual trade and investments. At the Second India Africa Forum Summit, the then Indian Prime Minister Manmohan Singh announced a $300 million line of credit to help revive the Ethiopia-Djibouti rail route. The Duty Free Tariff Preference scheme that was announced at the summit allowing for imports from Least Developed Countries into India has however had a positive impact on bilateral trade with the value of Ethiopian exports to India now reaching $120 million. The balance of trade however continues to remain in India's favour. India has also extended $710 million in lines of credit to help in rural electrification and the revival of the sugar industry in Ethiopia.

Mr. Kiros Hailemariam, Counsellor - I, the diplomatic team member accompanying H.E. the Ambassador explained that labour costs in Ethiopia are 50% cheaper compared to India and power tariffs one-third, and it was a favoured destination because of its favourable political and economic climate. The Ethiopian government is offering attractive incentives to draw foreign investors, such as land on decades-long lease, cheap power and duty-free exports to key markets like the US and Europe. Ethiopia is emerging as a favoured low-cost destination for apparel makers on the lines of Vietnam, Bangladesh and India. It is not only Indian textile companies that are making a beeline for Ethiopia - companies from China, Korea and Turkey too are investing in this African nation.

Indian enterprises, both large and mid-sized, have taken note of the benefits and are setting up manufacturing facilities in Africa's oldest independent country. Fabric-to-apparel maker Raymond has invested $100 million over the next two-three years for a garmenting unit in Awasa, a lake-side city, which will be one of its largest facilities. Arvind, another Indian textile major, has set up a six-million-piece garment plant in Ethiopia. Mr. Hailemariam further pointed out that, among various factors, the long-term lease for factories that the Ethiopian government offers is one of the main attractive propositions for the company's decision to invest in this east African nation. There is also single-window clearance for industrial projects. Kanoria Textiles, too, is setting up a project there. With its value proposition similar to that of Bangladesh which includes large population, cheap and young labour, Ethiopia also offers cheap power and a highly committed government. Ethiopia, without doubt, is set to be the epicentre of textiles across Africa. Mr.Hailemariam said that roads, railways, consultancy, telecommunication, power, mango plantation and water resource management are the areas where the Indian companies are jointly working with Ethiopian companies. He further stated, "We offer incentives such as tax holidays of one to five years depending on the project location, tax holidays of up to two years on income from expanded projects and unrestricted repatriation of profits, dividends, interest payments from approved projects." Investment activities eligible for income tax exemption are manufacturing or agro-industrial activities or agricultural products, and there are no stipulations on foreign investors on re-investing profits or dividend, as long as at least 60 per cent of the output is exported, he added.

For exporters looking at longer term and a bigger picture, investing in Ethiopia is definitely an option. For Ethiopia to be able to integrate and assimilate foreign investment into its economy, the levels of technology and capital intensiveness should be appropriate for a developing economy. India’s long experience in developing appropriate technology and in the promotion of small industries could be used by Ethiopia, keeping the above objective in mind. Opportunities for foreign investment in Ethiopia abound in the areas of mineral extraction, agro based industries and light manufacturing. Indian businesses can invest either individually or as a consortium in areas like infrastructure development and mineral extraction. Smaller units can be set up to tap opportunities in areas like leather & leather manufactures and food processing.

This was followed by a very proactive Q/A session, where several attendees from the industries, all of them prospective investors or existing business owners in Ethiopia, asked several questions with focus on Power, Trades, Infrastructures and similar industrial verticals forming a major percentage of the representation. The questions were noted down by HE Ambassador Dingamo, and he addressed all the issues mentioned. A gist of these solutions offered are as follows:

1. In response to the JIS Group, HE Dingamo stated The Ethiopian educational system is a good potential area for Indians. Of course the process of partnering was open to all, but he felt that it would be easy for any educational investor to expand in the country.

2. As regards transmission technology providers, in response to a query raised by the representative from Skipper, the Ambassador spoke of the UAP (Universal Electrical Access Programme) aimed at electrifying Ethiopia to 100% by 2025, and assured that there was good opportunity for investors. However, this would be a totally government owned project, he stated, as there was no private player in the Power or Transmission Sector as yet in Ethiopia.

3. Professor B.K.Chowdhury, HOD, Public Systems - IISWBM spoke of Energy systems prevalent in Ethiopia, as well as existing frameworks guiding the same. The Ambassador replied with the kinds of green initiatives that Ethiopia was taking, inclusive of its general climate conditions, which were extremely affable.

4. DCPL, a major Indian consulting firm operating in Ethiopia for more than two decades raised the issue of nonexistence of foreign banks in Ethiopia, to which both Mr. Dingamo and Mr.Hailemariam commented that all the Ethiopian nationalised banks corresponded with all international banks.

5. RTS Power inquired as to whether the tax exemptions extended to existing operators in Ethiopia, to which he received a positive affirmation.

6. Mr. Indrajit Sen, Sr.VP, BCC&I inquired regarding which entity was the equivalent body to be approached to facilitate Ease of Doing Business in Ethiopia. This very relevant query was replied, and the Ethiopian Chamber of Commerce’s coordinates were shared.

7. Dakshata Technical Academy and Mr.Zariwala also received affirmative responses to their queries regarding expansion opportunities in Skills domain and export of medium voltage switchgears to Ethiopia.

The programme was a great success. The high tea organised by BCC&I at the end of the programme provided excellent opportunities in the way of a networking platform for further exchanges between the overseas dignitaries and the delegates attending the programme.