India: On trade with Tanzania and global economic power play

Are there any specific areas in terms of business and investment policies that you would like the Tanzanian government to review in order to attract more foreign investors?

The business environment has improved in the last one and a half years. The current government is more open to discussions with people from the private sector. As a result, they feel welcome. Also, the waning of Covid-19 has been an additional advantage. So, if the government continues with this policy of private sector engagement, listening to their issues be it taxes or work permits, investments will improve even further.

You have been receiving a lot of commercial queries from Indian investors who want to invest in Tanzania since opening up of the business space. How many companies have pledged investment?

According to Tanzania Investment Centre (TIC), about 630 Indian companies are registered – companies that have invested and are working here on different projects. The investment shown is roughly worth $3.68 billion giving employment to about 60,000 people.

In the last one year, big and medium companies from India have shown interest in projects like bio science, with Hester Biosciences Ltd investing $20 million to set up an animal vaccine manufacturing unit in Tanzania to cater for the African market.

Similarly, India’s largest port company, Adani ports, wants to invest in the port sector and they’re currently holding talks with the Tanzania Ports Authority and other ministries. There’s also investment in machinery where we’ve managed to convince investors that rather than exporting machinery they should come and invest here since most Tanzanian companies use sugar processing machinery, cashew processing machinery and other processing machinery from India.

In the pharmaceutical sector, there’s a company investing in the iv fluid plant. There are many more investments in the pipeline that are being negotiated with various ministries and in the last year and a half there has been good progress.

During this same period we have seen a jump in Indian exports to Tanzania. But we have seen a disproportionately higher jump in Tanzanian exports to India. This has made India not only the biggest but the best trade partner to Tanzania.

The value of goods and services imported from India to Tanzania is over Sh3 trillion a year, equivalent to an annual increase of 11.2 percent. Tanzania’s exports, mostly unprocessed agricultural goods to India in 2021 were valued at over Sh2 trillion. How can Tanzania add value to its exports in order to benefit more?

About 98 percent of Tanzanian commodities have duty free access to India, whether it is primary or processed commodity, it does not get taxed. We introduced avocado importation in January 2022 and in a few months, we saw massive amounts of avocados being brought to the Indian market and this is because other competing countries that bring in their products pay 30 percent import duty and 5 percent GSD, making Tanzanian avocados have a 35 percent tax advantage.

In terms of value addition, we’re working government to government and also at the private sector level by encouraging Indians to come and invest here. We’re encouraging people to set up processing plants here and some have already invested in Mtwara, Shinyanga and other regions.

Tanzania has a lot more potential in the agricultural sector than what is being utilised now.

A number of MoUs have been signed between India and Tanzania targeting areas such as industrial development, diplomacy, and education. How have these agreements benefited Tanzania and India?

We have several MoUs in diverse sectors but the most important are our development projects and Tanzania is our biggest development partner. Even though recently we’ve become the 5th largest economy in the world, we’re still a poor country as 30 percent of our people still have difficulties meeting their needs. So, we’re not a rich country but we still have strong development partnership programmes and have a strong commitment to work with developing countries in Africa – Tanzania being number one.

We have water projects here and the development assistance is $1.1 billion. Furthermore, we have the biggest scholarship programmes in Africa and in Tanzania in particular which were badly affected during Covid, but luckily we have recovered from last year. Apart from those two programmes though, we still have other agreements and in a nutshell all the MoUs are doing fairly well.

The India–Africa Forum Summit has become instrumental in boosting India’s relations with Africa. Have the key regional challenges highlighted by the platform since its establishment in 2008 been addressed according to expectations?

We did four rounds of India-Africa Forum Summit, the last being held in 2015. In India, all the important ministries have a separate Africa focus desk because we need to engage more with each other and that’s why recently India opened 18 new embassies in Africa. What we’re doing is increasing our presence in smaller countries where we’re not present for different reasons. If you look at East Africa, the Indian Ocean side, we believe that is a zone of security because whatever happens here would affect India and vice versa. We believe it is an area where we need to work together for permanent stability since it’s a common security space and that’s why our security advisor recently visited Tanzania and Mozambique. Eastern Africa remains a zone of priority.

While the summit hasn’t taken place in seven years, the focus is still there. We engage all the important countries, so you find Prime Ministers and Foreign Ministers visiting regularly and meeting all leaders, we’re having regular trade missions. Five years down the line, the strong areas emerging the India-Africa linkage will be strongly based in two areas: People to people relations which will strongly involve education and health line.

India recently became the world’s 5th largest economy, overtaking the UK. How prepared is India at playing a bigger role in global economics as a superpower alongside China and the US?

Immediately after we got independence in 1947, we championed the cause for decolonisation at a global level along with few other leaders from this continent and Asia. This shows that we were not shy to play a global role even though we were just newly independent. The only difference is that at that time we were not taken seriously. But now, because we have a larger economic presence and have much stronger day-to-day cooperation with various countries we’re being heard more attentively. I believe that India should have its rightful place in global issues because despite having more economic muscle today, we understand that whatever happens globally will affect us if we do not voice our opinions.

Peace and Security is a priority for India as it is for Tanzania. How has India been able to assist Tanzania enhance its defence forces, especially considering the unrest in neighbouring countries such as Mozambique which threaten peace and security in south Tanzania?

To be candid, our cooperation on security is huge and has been there for the last several years but is not as strong as development partnership, economic and political engagement. Defence was basically lagging behind but the good thing is that we’re now working to improve that. We have agreed to set up a joint defence coordination committee which will be a permanent committee from both countries that will monitor the progress on what we’re discussing.

At the moment, our engagement with Tanzania was limited to capacity building and training but we want to move ahead of that to the equipment side. That is why in May this year we had 16 Indian public and private sector companies showcase their equipment here, offering a cost effective alternative for import of equipment.

In the coming months, you’ll see more engagement in our defence establishments. We are committed to increasing our defence cooperation.