I N recent years, the relationship between India and Tanzania has flourished, evolving from shared histories to a dynamic and growing economic partnership. What was once a bond founded on anti-colonial solidarity has now matured into a robust alliance driven by shared economic goals, mutual trust, and strategic cooperation. The recent surge in trade and investment between the two nations is testament to this evolving partnership, one that promises to shape the future of both countries.
Trade between India and Tanzania has never been more promising. In the fiscal year 2023-24, bilateral trade soared to $7.9 billion, reflecting a 22 per cent increase from the previous year. Tanzania now stands as India’s second-largest trading partner in Africa, surpassing Nigeria and trailing only South Africa.
Tanzania’s exports to India have surged by 29.5 pc, reaching $3.29 billion in 2023. Tanzanian agricultural products such as legumes, avocados, and cashew nuts, alongside minerals like gold and coal, are now in high demand in India. For Tanzania, India has become its largest export destination, a significant achievement that bolsters the livelihoods of Tanzanian farmers and miners.
India’s exports to Tanzania have equally contributed to Tanzania’s growth. The supply of petroleum products, industrial machinery, and pharmaceuticals from India has played a vital role in Tanzania’s industrialisation and healthcare improvement. For Tanzanian businesses, access to Indian machinery means faster production, lower costs, and the ability to compete on the global stage.
At the heart of this partnership lies a shared commitment to the sectors that hold the most promise for economic growth. The energy sector is a key focus, with Indian companies actively investing in Tanzania’s energy infrastructure. In rural villages that were once shrouded in darkness, new solar energy projects funded by Indian investments are now bringing light and opportunity. Renewable energy projects, particularly in solar and wind power, are part of a broader effort to ensure Tanzania’s energy future is secure and sustainable.
The manufacturing sector, too, has benefited from this growing partnership. The planned Indian Industrial Park near Dar es Salaam is set to become a hub for pharmaceuticals, agro-processing, and automobile manufacturing. For local workers, this means more jobs, more skills, and the chance to participate in industries that were once beyond their reach.
Services, particularly in healthcare and education, form another crucial aspect of this cooperation. Indian hospitals and pharmaceutical companies are expanding their presence in Tanzania, bringing much-needed healthcare services to communities that have long struggled with inadequate medical care.
India Exim Bank role
Behind many of these success stories is the quiet but powerful work of the Export-Import Bank of India (India Exim Bank). For years, India Exim Bank has been a cornerstone of the India-Tanzania relationship, providing financial support that has enabled numerous projects to come to life. Whether it’s building rural electrification systems or funding water supply projects, the bank’s financial assistance has had a transformative impact on Tanzania’s infrastructure.
One particularly striking example of this is the Lines of Credit (LoCs) extended by India Exim Bank. These LoCs have financed the import of agricultural equipment, which has revolutionized farming in Tanzania.
International organisations like the World Bank and the International Monetary Fund (IMF) have recognised the importance of the India-Tanzania partnership. In its Tanzania Economic Update, the World Bank has praised the role that foreign investment, particularly from India, has played in Tanzania’s economic development.
Similarly, the IMF’s 2023 Country Report on Tanzania underscores the importance of foreign direct investment (FDI) from India in driving Tanzania’s industrial and manufacturing growth.
Bright future for both
As India and Tanzania look to the future, the path ahead is filled with promise. The goal of reaching $10 billion in bilateral trade by 2027 is ambitious, but with the right policies and continued investment, it is within reach. With trade and investment flowing more freely, and new agreements on the horizon, the partnership between these two nations is set to become a cornerstone of economic progress in Africa.
India’s commitment to supporting Tanzania’s development through institutions like India Exim Bank further cements the foundation of this relationship. By working together to tackle challenges like poverty, industrialisation and sustainability, India and Tanzania are not only building stronger economies but also creating a more equitable future for their citizens.
