Why Should Indian Businesses Explore Ethiopia?
Following our successful business mission in March 2025, the Asian African Chamber of Commerce & Industry (AACCI) – Tamil Nadu Chapter undertook a second delegation to Ethiopia at the end of the year. This white paper captures firsthand insights, ground-level observations, and strategic opportunities identified during our visit. This document is based on direct interactions, official meetings, and sector evaluations conducted by the AACCI delegation comprising:
- Ms. Jani Jermans, President, AACCI Tamil Nadu Chapter
- Mr. Asokan Sellakkumar, AACCI Member, specializing in automotive spare parts manufacturing and sourcing
- Mr. Ottakoothan Ramasamy, AACCI Support Manager
While our earlier delegation assessed multiple sectors, this mission focused exclusively on the automobile industry—including manufacturing, spare parts, distribution networks, and government initiatives supporting industrial growth.
This white paper serves as a practical guide for Indian businesses seeking to understand the opportunities, challenges, and strategic advantages of exploring Ethiopia as a high-potential business destination.
1. Power Sector Insights
Our discussion with Mr. Firaol Girma, Project Manager, provided valuable insights into Ethiopia’s evolving automobile landscape and the country’s broader energy ecosystem.
Although Ethiopia currently has a ban on petrol and diesel vehicles, the market has not yet fully transitioned to electric mobility. As a result, demand for conventional fuel-based vehicles and spare parts remains high, presenting a temporary yet significant opportunity for Indian companies.
Key insights:
- The company we met operates in Ethiopia, Rwanda, and Tanzania, giving them strong regional reach.
- Ethiopia is emerging as a power exporter to Djibouti.
- It is the second-cheapest country in the world for Bitcoin mining, with electricity costing approximately ₹1.25 per unit.
- Despite abundant power, only 55% of the population has electricity access, creating strong potential for solar and renewable energy solutions.
- Due to Ethiopia’s developing banking system, many companies route international transactions through Rwanda, which offers more efficient banking services.
Their core business supports critical infrastructure sectors such as hospitals and airports, where uninterrupted power is essential.
2. Trading Sector Insights
We met the team at Time Electromechanical, a promising startup still shaping its long-term business roadmap. Despite being new, they have built an impressive consultancy and training arm—the Institute of Training for Industrial Automation & Training—which plays a critical role in upskilling young graduates for technical industries.
The company is exploring opportunities in:
- Import of industrial machinery
- Distribution of spare parts and electromechanical components
- Building partnerships for local representation
This opens avenues for Indian manufacturers seeking local distributors and technical training collaborations in Ethiopia.
3. Trade Up: Import–Export Insights
Our session with Mr. Akulu Yohannes (Trade Up) felt like a compact yet powerful crash course on Ethiopia’s trade ecosystem. He highlighted multiple export products that offer strong potential for India–Ethiopia business collaboration.
Key export products include:
- Turmeric (India imports Ethiopian turmeric)
- Lentils
- Sesame
- Soap noodles
- Essential oils for soap production
- Industrial chemicals
- BP polymer
- Chlorine
- Caustic soda
- RBD oil (Refined, Bleached & Deodorized)
- Coffee and various beans
Mr. Akulu also emphasized the importance of using HSN codes via the Ethiopian customs portal to accurately identify and evaluate import–export opportunities—an invaluable resource for Indian businesses.
4. General Importer: Jayeshkumar Gulabchand Sheth
Meeting Mr. Jayeshkumar (“Jayesh”) was one of the most pleasant interactions of our delegation. A third-generation Gujarati with deep cultural ties to India, he welcomed us with warmth and enthusiasm.
- Represents several Indian companies locally
- Is well-versed in navigating Ethiopian market dynamics
- Currently looking at importing Basmati rice and jute bags (team is already working on his product requirements)
- Expressed strong interest in future collaborations
His Indian roots, local expertise, and credible market presence make him an excellent partner for Indian companies seeking representation in Ethiopia.
5. Automobiles Sector Insights
5.1 AGTA PLC
Our meeting with Mr. Teka Gebreyesus (Former Ministry of Trade) and Mr. Engr. Hadgu Tsehaye, CEO of AGTA PLC, focused on opportunities in buses and motorcycles.
Key highlights:
- 97% of motorcycles in Ethiopia are imported from India.
- Bajaj was the first major brand—so influential that all motorcycles are colloquially called “Bajaj.”
- India has a major logistics advantage:
- Shipments from Gujarat → Djibouti take only 2 weeks
- Chinese shipments take 45 days
- India has alternate vessels every other day
- This makes Indian automobile exports faster, cheaper, and more competitive.
5.2 General Importers
Our interaction with Mr. Abdellah Essaih—with 20–30 years of automotive import experience—was warm and insightful. His comfort with Indian businesses is rooted in long-standing partnerships. He introduced us to Mr. Abraham Girmai, a former government official who has transitioned into business. Both expressed strong interest in collaborating with us.
Mr. Asokan carried sample parts to explore potential automotive trade opportunities.
5.3 Kaki Motors
Our meeting with Mr. Muez Yihdego, Deputy General Manager – Commercial, shed light on the depth of Ethiopia’s automotive ecosystem.
Kaki Motors is:
- The sole authorized distributor for ISUZU in Ethiopia
- Focused primarily on commercial vehicles
- Actively involved in exports of coffee and sesame
- Operating an SKD (Semi Knocked Down) assembly line
- Importing most OEM parts from Japan due to its ISUZU partnership
They see strong opportunities for Indian companies in:
- OEM products
- Aftermarket spare parts
- SKD components for local assembly
Their strong market presence makes them a strategic partner for Indian automobile companies.
5.4 KLUCH Trading Plc
Our meeting with Mr. Adikab Addis, a second-generation entrepreneur with 30+ years in business, highlighted the company’s diverse portfolio:
- Import of aftermarket automotive components
- Supply of construction-related chemicals
- Distribution of industrial chemicals
Their presence across multiple sectors makes them an excellent contact for Indian suppliers in both automotive and construction industries.
6. Logistics
Our interaction with Mr. Ian Harris, a British national with extensive Oil & Gas experience and now settled in Ethiopia, offered a deep geopolitical perspective.
He clarified misunderstandings about Somaliland, emphasizing:
- It is far more stable than Somalia
- It has attracted interest due to gold discoveries
- GCC nations and the US are exploring strategic bases there
He also highlighted high-potential markets for Indian businesses:
- Rwanda
- Kenya
- UAE Free Zones
Mr. Harris is well-connected with British companies and the British Consulate, offering strong Indo–UK–Africa collaboration potential.
7. Ethiopia Business Advisor: Interaction with Mr. Dagin
Our meeting with Mr. Dagin, a senior advisor to AACCI Ethiopia Chapter President Ms. Selam, provided sector-wise clarity:
I. Textiles
- Slow-moving sector
- Dominated 95% by Chinese products
- Opportunity exists in yarn and raw materials supply
II. Oil & Gas
Not advisable—high government control and regulatory hurdles
III. Construction
Major projects dominated by Chinese companies
Viable opportunity: supplying materials via Ethiopian distributors
IV. Banking Instruments
Letter of Credit (LC) should be mandatory for all transactions
V. Pharmaceuticals
A high-potential sector for India, especially:
- OTC medicines
- Cancer drugs
- Fertility treatment products
- Hospital furniture & equipment
VI. Medical Tourism
- Ethiopians prefer Thailand due to customer care
Indian hospitals can capture this market by improving service experience
VII. Electric Vehicles (EV)
- Government push is strong
- High opportunity for EVs, batteries, components, and technology
VIII. Automobiles
Despite the fuel-vehicle ban, demand remains high. Indian brands still enjoy strong goodwill
Expo – 11th Africa Sourcing & Fashion Week (ASFW), AICC (Addis International Convention Centre)
We attended this textiles-and-leather-focused expo where:
- Only one exhibitor was from India
- Majority were from China, and a few from Turkey
The expo was modest in size but useful for:
- Understanding local textile demand
- Studying machinery trends (mostly Chinese equipment)
- Gaining market insights for textile investors
National Bank of Ethiopia
We met a representative from the National Bank of Ethiopia to gain clarity on the country’s banking framework and regulatory environment. One of the key points she highlighted was the regulation around gold trade. Ethiopia currently permits the export of only raw gold, as the country does not yet have a domestic gold refinery. At present, refining is done primarily in South Africa, although Ethiopia is in the process of establishing its own refinery. Once operational, this is expected to significantly streamline gold export processes and enhance value addition within the country.
Freelance Consultant – Mr. Binyan
During our visits across various industries, we had the opportunity to meet Mr. Binyan, who currently works as a Business Development Manager for an EV company on a freelance basis. He expressed strong interest in supporting us with local transactional assistance should we require on-ground representation in Ethiopia.
Mr. Binyan also shared several valuable leads and facilitated meetings with potential local partners, proving to be a helpful and resourceful contact throughout our delegation.
Conclusion
Ethiopia presents immense opportunities for business leaders worldwide, especially for Indian entrepreneurs aiming to enter emerging high-growth markets. With the country poised for economic expansion, those who understand local realities, navigate challenges wisely, and leverage government support can establish strong and sustainable businesses.
For further information, to schedule delegation visits and investment inquiries, please contact:
Name: Jani Jermans,
Position: President – AACCI, Tamil Nadu Chapter, India
E-Mail Id: president.tamilnadu@asianafrican.org
Contact No: +91 9591988455