India- Ethiopia Relations | 23 Dec 2025

Source: PIB 

Why in News?

Prime Minister Narendra Modi’s three-nation visit to Jordan, Ethiopia and Oman underscored India’s bid to consolidate its strategic footprint in the Middle East and Horn of Africa. During the Ethiopia leg of the tour, India–Ethiopia relations were elevated to a Strategic Partnership, representing a major upgrade in bilateral ties. 

• Prime Minister Narendra Modi was conferred Ethiopia’s highest civilian honour - The Great Honor Nishan of Ethiopia.

What are the Key Outcomes of the Prime Minister’s visit to Ethiopia? 

• Agreements and Institutional Mechanisms: The two sides signed eight MoUs and agreements, including for establishing a Data Centre at Ethiopia’s Ministry of Foreign Affairs and for debt restructuring in respect of Ethiopia under the G20 Common Framework.   
  • Existing mechanisms such as Foreign Office Consultations and the Joint Trade Committee were reinforced. 
• Economic and Investment Outcomes: India highlighted that Indian companies have invested over USD 5 billion in Ethiopia, particularly in manufacturing and pharmaceuticals, creating more than 75,000 local jobs. 
• Global Issues: India noted Ethiopia’s solidarity following the Pahalgam terror attack and its support for the global fight against terrorism. 
• Parliamentary and People-to-People Engagement: Prime Minister of India addressed a Joint Session of the Ethiopian Parliament, underscoring democratic engagement and people-to-people ties.  
  • Both sides emphasised education, capacity building, and cooperation through platforms such as the International Big Cat Alliance (IBCA), Coalition for Disaster Resilient Infrastructure (CDRI), Global Biofuel Alliance (GBA) and International Solar Alliance (ISA). 

How are India- Ethiopia Relations? 

• Historical Foundation: India–Ethiopia relations trace back to the Axumite Empire (1st century AD), when Indian traders exchanged silk and spices for gold and ivory through the ancient port of Adulis.  
  • In the 16th century, Indians from Goa supported the Ethiopian king alongside the Portuguese, and Indian soldiers later formed a key part of British forces that ended Italy’s occupation of Ethiopia (1936–41). 
  • India and Ethiopia established diplomatic ties in 1950, which have since grown into a broad partnership. 
• Economic and Trade Relations: India is the 2nd largest trading partner for Ethiopia. 
  • In FY 2024–25, India–Ethiopia bilateral trade stood at USD 550.19 million, with Indian exports at USD 476.81 million and imports at USD 73.38 million, making the relationship strongly export-driven in India’s favour.  
  • Ethiopia also benefits from India’s Duty-Free Tariff Preference (DFTP) scheme for least developed countries. 
• Education and Human Capital Linkages: India has historically shaped Ethiopia’s education system, now reinforced through Indian Council for Cultural Relations scholarships, Indian Technical and Economic Cooperation Programme and India’s role as a major destination for African students.  
  • Ethiopia served as a pilot country for India’s Pan-African e-Network, enabling tele-education and tele-medicine with institutions like IIT Delhi, and marking an early example of India’s digital public diplomacy in Africa. 
• Indian Community:The Indian community in Ethiopia dates back to the late 19th century, with early settlers from Gujarat, and today numbers about 2,500 people contributing to education and industry.

Significance of Ethiopia for India 

• Strategic Partner in Africa: Ethiopia is a key political and development partner for India and a gateway to Africa due to its central location in the Horn of Africa . 
• Global South & Multilateral Influence: As a BRICS member and host of the African Union and United Nations Economic Commission for Africa (UNECA), Ethiopia amplifies India’s engagement on Global South issues at the UN, G20, and BRICS. 
• Economic Opportunities: Ethiopia’s large market, growing manufacturing base, and strong demand for Indian exports make it an important trade and investment destination. 
• Energy & Sustainability: Ethiopia’s hydropower and renewable energy potential aligns with India’s clean energy and climate goals.

What are the Challenges and Opportunities in India–Ethiopia Relations? 

Challenges in India–Ethiopia Relations 

• Logistics Constraints: Ethiopia’s landlocked geography increases transport costs and dependence on neighbouring transit routes. 
• Political and Security Instability: Periodic internal conflicts and Horn of Africa geopolitical tensions (including the Sudan crisis and Red Sea insecurity) elevate country risk perceptions, posing challenges to long-term political stability and Indian investments and engagement in Ethiopia. 
• Regulatory Gaps: Ethiopia’s transition to a market-oriented economy faces procedural delays, unclear privatisation rules, restricted private sector access, and regulatory instability, leading to a weaker ease of doing business. 

Opportunities in India–Ethiopia Relations 

• Deepening the Strategic Partnership: The upgraded partnership provides a framework to expand cooperation beyond trade into defence, digital governance, and development financing. 
• Manufacturing and industrial cooperation: Ethiopia’s large domestic market, young workforce, and industrial parks align well with Indian strengths in manufacturing, textiles, pharmaceuticals, and MSMEs, enabling value-chain integration. 
• Renewable energy collaboration: Ethiopia’s strong hydropower base and renewable potential offer scope for joint projects in clean energy, grid development, and climate-resilient infrastructure. 
• Multilateral coordination: Joint engagement at the African Union, UN, G20, and BRICS can amplify Global South priorities and strengthen collective influence in global governance reforms.

Conclusion 

India–Ethiopia ties have entered a new strategic phase, built on historical links and growing economic cooperation. The Strategic Partnership strengthens collaboration across trade, energy, and multilateral forums.