India encourages trade in local currencies with Tanzania

Dar es Salaam. The Indian government has called on Indian and Tanzanian banks, as well as business leaders, to support and promote the innovative approach of trading using local currencies, as few transactions have taken place so far.

The call was made on November 21, during the Tanzania-India Business Forum by Indian Minister of State for External and Parliamentary Affairs Shri Muraleedharan, who is in the country for an official visit. Accompanied by 30 Indian businesspeople, the minister highlighted that this new trade mechanism will provide an alternative avenue for businesses on both sides.

"My visit to Tanzania follows President Samia Suluhu Hassan's successful state visit to India last month," he said. "This visit serves as a follow-up to ensure the realization of agreements and MoUs signed during her visit, aiming to enhance the business relationship between our two nations."

Mr. Muraleedharan emphasized that India actively promotes trade in local currencies and that Tanzania is among the earliest partners in this endeavor. However, he noted that only a few transactions have been conducted using the mechanism of payments in Indian Rupees and Tanzanian Shillings.

"This new trade mechanism will provide an alternative avenue for businesses on both sides," he reiterated.

"Therefore, I call upon Indian and Tanzanian banks and business leaders to support and promote this innovative approach."

The minister further commended Tanzania's position as a gateway to East Africa and a key transit trade point. He highlighted developments such as the African Continental Free Trade Agreement (ACfTA) and increasing trade liberalization within the East African Community (EAC) as factors that make Tanzania an attractive trade and investment destination for India.

In that regard, he urged the members of the India-Tanzania business community to play an active role in promoting bilateral trade, investing in joint ventures and business partnerships, and attracting entrepreneurs and startups from both sides to collaborate and network.

Speaking at the forum, Deputy Minister for Foreign Affairs and East Africa Cooperation, Mr. Mbarouk Nassor Mbarouk, welcomed the visit by his ministerial counterpart and the business delegation, recognizing India as among the top five investment sources in Tanzania.

"To see a business delegation from India accompanied by the minister of external affairs is a clear testimony that the state visit to India by President Samia was a very fruitful one," he stated. "Tanzania and India share a vibrant economic partnership in the areas of trade and investment, making India the fourth largest trading partner of Tanzania with a bilateral volume of $6.5 billion currently."

Minister Mbarouk assured the Indian business community that investment in Tanzania would be successful, emphasizing the country's membership in the EAC and the Southern African Development Community (SADC), two economic blocs that provide a market of over 417 million people.

Tanzania Private Sector Foundation (TPSF) acting chief executive officer Mr. Raphael Maganga echoed the sentiment of welcoming Indian businesses to invest in Tanzania.

"Our economy has continued to grow owing to a conducive business environment and policies that support the growth of the private sector," he said. "All these factors project Tanzania to be one of the fastest economies in Africa, and it is indeed an ideal time for Indian businesses to come and invest in Tanzania."

Mr. Maganga further noted that the roundtable discussion between the Confederation of India Industries (CII) delegation and the Tanzanian business community would serve as a platform to create instrumental partnerships that would benefit both parties. "We project to see more partnerships between our two countries in the next few years," he concluded.

The call for increased trade in local currencies between India and Tanzania underscores the growing economic partnership between the two countries. By embracing innovative approaches to trade, businesses on both sides can expand their reach, reduce costs, and foster greater economic cooperation.