Assesing The Post-1991 Ethio-india Economic Relations A Study On Trade And Agricultural Investments

Ethiopia has had long-standing bilateral relations with India. Trade and commercial contactsrnbetween the two countries flourished during and since the ancient Axumite Empire. Indiarnachieved its independence from British colonial rule in August 1947. After one year of itsrnindependence, India has established official diplomatic relations with Ethiopia. However, thernyear 1991 was the turning point in the relations between the two countries. After 1991, thernbilateral relations manifest in terms of economics and trade. The main objective of this study isrnto critically examine the Post-1991 Ethio-India economic relations. It aims to assess the bilateralrntrade relations between the two countries and Indian agricultural investments in Ethiopia. Tornstudy these issues, the study has used qualitative research methodology. Data have beenrncollected both from primary and secondary sources. Available literatures were reviewed torndiscuss about historical relations and bilateral economic relations between the two countries.rnAdditionally, in-depth interviews were conducted with officials from Ethiopian InvestmentrnCommission, Ministry of Foreign Affairs, Ministry of Trade, and Agricultural Investment LandrnAdministration Agency for the collection of primary data. The findings from data analysis showrnthat the economic relationships between the two countries are in favor of India in trade andrnagricultural investments. After critical analysis of trade data between Ethiopia and India, thisrnpaper has found that Ethiopia has chronically run a negative balance in its trade with India.rnEthiopia’s trade deficit can largely be explained by the unequal terms of trade betweenrnagricultural commodities (the country’s major exports) and capital goods (the country’s majorrnimports). With regard to agricultural investment, Indian agricultural investments have bothrnpositive and negative impacts on local peoples where they are operating. Indian Agriculturerninvestments in Ethiopia created permanent and temporary job opportunities for Ethiopians; itrnhas also increased government revenues, and has brought foreign currency and technologyrntransfer. On the other hand, Indian investments in agriculture do not alleviate food insecurity inrnEthiopia and it has also caused the displacement of smallholder farmers and the degradation ofrnnatural resources. In response to trade imbalance, Ethiopia needs to focus on diversifying therncomposition of its exports and improving the business climate through infrastructuralrndevelopment, building strong institutions and reducing bureaucratic problems. Indianrnagricultural investments in Ethiopia also need encouragement, support and critical follow up inrnorder to provide the expected benefits for Ethiopians.rnKey Concepts: Globalization, Economic Cooperation, South-South Cooperation, FDI and Trade

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