India urges Ethiopia to explore local currency trade settlement

New Delhi: India has urged Ethiopia to explore the possibility of settling bilateral trade transactions in local currency, a move that would boost bilateral trade and conserve foreign exchange, according to an official statement released on Wednesday. The country has also invited the African nation to collaborate on the Unified Payment Interface (UPI) with Ethswitch of Ethiopia.

Discussions during the India-Ethiopia Joint Trade Committee

These issues were discussed during the sixth session of the India-Ethiopia Joint Trade Committee held in Addis Ababa from November 6-7. Both sides agreed to swiftly address all issues hindering bilateral trade and facilitate trade promotion between the two countries.

Exploring local currency trade settlement

The Indian side urged Ethiopia to explore the possibility of settling trade transactions in local currency, which would help boost bilateral trade and conserve foreign exchange, the commerce ministry said. The Indian side also requested the Ethiopian side to expedite the early finalization of the Bilateral Investment Treaty.

Ethiopia's economic growth and bilateral trade

Ethiopia is one of the fastest growing economies in the African region, with an estimated growth of 6.4 percent in 2021-22. Bilateral trade between India and Ethiopia stood at USD 642.59 million in 2022-23, making India the second largest exporter to Ethiopia.

Indian investment in Ethiopia

Indian companies are among the top three foreign investors in Ethiopia, with existing Indian investment of USD 5 billion. The companies have invested in various sectors such as agriculture and floriculture, engineering, plastics, manufacturing, cotton and textiles, water management, pharmaceuticals, and healthcare.

India's push for local currency trade settlement with Ethiopia and the invitation to collaborate on UPI with Ethswitch reflect the country's commitment to boosting bilateral trade and economic cooperation with African nations. As Ethiopia continues to experience rapid economic growth, India sees immense potential for expanding trade and investment ties with the African nation.