India pledges financial support to Ethiopia through BRICS Bank and Asian Development Bank

By our staff reporter

India has reaffirmed its strong commitment to supporting Ethiopia’s economic development by leveraging its influence within the New Development Bank (NDB), also known as the BRICS Bank, and the Asian Infrastructure Investment Bank (AIIB). This pledge was made by Anil Kumar, India’s Ambassador to Ethiopia, during the recent “3rd Invest Ethiopia 2025” Global Investment Forum Panel Dialogue, which highlighted Ethiopia’s rising global profile, especially following its recent inclusion in the BRICS economic group.

Ambassador Kumar emphasized India’s pivotal role in Ethiopia’s accession to BRICS, noting, “Ethiopia became a significant country as a member of BRICS last year, and it was India that proudly presented this proposal at the Johannesburg conference.” This milestone marks a new chapter in Ethiopia’s international economic engagement, opening avenues for enhanced cooperation between the two nations within the BRICS framework.

Highlighting key sectors for collaboration, Ambassador Kumar pointed to Ethiopia’s abundant natural resources and India’s industrial strengths. He identified mining, metals, and chemicals as particularly promising areas, noting India’s strong demand for rare earth elements and potash-resources in which Ethiopia is rich. He also underscored opportunities in the iron and steel sector, where Ethiopia’s supply of affordable electricity could be a crucial advantage for industrial growth.

In the healthcare sector, Ambassador Kumar proposed that Ethiopia’s adoption of India’s pharmacopoeia standards could reduce pharmaceutical costs by at least 50 percent. He cited successful examples where Indian state-owned institutions and industrial parks achieved similar price reductions in short timeframes, suggesting that such strategies could greatly enhance access to affordable medicines in Ethiopia.

India’s commitment to providing affordable financial assistance to Ethiopia is supported by its significant voting shares in key multilateral development banks. India holds the second-largest voting share in the AIIB at 7.6% after China and commands the highest 19% share in the New Development Bank among ownership members. Beyond these, India also wields considerable influence in other international financial institutions, including the International Monetary Fund and the African Development Bank, positioning it as a strong partner for Ethiopia’s development financing needs.

Ambassador Kumar also elaborated on India’s industrial policy, explaining that while much of Indian industry is privately run, the government plays a major facilitating role, especially in sectors like defense where government institutions hold key licenses for manufacturing and distribution. He stressed that inter-governmental cooperation could be vital in areas where strategic collaboration is needed.

Reflecting on India’s own development journey, Ambassador Kumar noted that India’s pharmaceutical industry did not achieve success by controlling the entire global supply chain from the outset. Instead, it started with the final dosage of drugs and gradually moved backward to formulations and active pharmaceutical ingredients (APIs). He suggested Ethiopia could adopt a similar strategic approach, leveraging contract manufacturing and specialization to build a competitive pharmaceutical sector.

India’s economic footprint in Ethiopia is already substantial, with over 650 Indian investments across various sectors. The two countries share a historical relationship spanning more than 2,000 years, with India currently serving as Ethiopia’s second-largest trading partner and a major source of foreign direct investment.

According to data from India’s Ministry of Commerce, the total trade turnover between India and Ethiopia in 2023-2024 reached approximately US$571.52 million. During this period, India exported goods worth US$489.59 million to Ethiopia, while imports from Ethiopia amounted to US$81.93 million. India’s exports to Ethiopia primarily include primary and semi-finished iron and steel products, medicines and pharmaceuticals, machinery and equipment, and metal products. Conversely, Ethiopia’s main exports to India consist of pulses, precious and semi-precious stones, vegetables and seeds, leather, and spices.

Ethiopia’s recent accession to BRICS and its anticipated membership in the New Development Bank are expected to further diversify its sources of development finance beyond traditional Western institutions. The NDB, established by BRICS countries to fund infrastructure and sustainable development projects, will provide Ethiopia with access to new funding sources and a platform to influence development priorities relevant to Africa.

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