The historic relationship between Ethiopia and India, which stretches back two millennia, is currently evolving into a robust modern partnership driven by significant trade and investment. While the two countries share a cultural history dating back to the Aksumite Kingdom—when Indian merchants traded goods like textiles and spices through the Port of Adulis—their formal diplomatic relationship was established 70 years ago in 1950.
Historically, India demonstrated its commitment to Ethiopia by standing as a just ally during the struggles to repel European colonial ambitions. Today, the partnership is focused on mutual national interest and economic growth.
Investment and Economic Impact
India is a key trade and investment partner for Ethiopia:
- Investment Volume: Over 650 Indian companies operate in Ethiopia, having injected more than $4 billion USD in capital.
- Key Sectors: These investments span crucial areas, including manufacturing, agriculture, pharmaceuticals, ICT, mining, and energy, making a substantial contribution to the Ethiopian economy.
- Trade: Current data indicates that the two-way trade exchange is significant, exceeding $571 million USD in 2025.
Strategic Cooperation
Beyond commerce, India is actively supporting Ethiopia in building modern institutional frameworks in education, health, water management, and finance.
Furthermore, Ethiopia's recent economic reforms have attracted heightened interest, with Indian firms reportedly keen to enter previously closed sectors, such as banking.
High-Level Dialogue
The relationship has been consistently elevated through high-level meetings. Prime Minister Abiy Ahmed and Indian Prime Minister Narendra Modi held a bilateral discussion during the 2023 BRICS Summit in South Africa, covering cooperation on defense, trade, capacity building, and strengthening people-to-people ties. These discussions have since matured into concrete, implementable agreements.
Looking ahead, Prime Minister Modi is expected to visit Addis Ababa for a working visit. This visit is aimed at expanding the current scope of collaboration, boosting major investment, and further elevating the strategic trade partnership to maximize mutual benefit.
