Mozambique: Trade with India swells to €1.7bn; scope to grow further – diplomat

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Mozambique: Trade with India swells to €1.7bn; scope to grow further – diplomat

7:53 CAT | 05 Feb 2019

Photo: Lusa

The total value of trade between Mozambique and India last year increased to €1.7 billion, from €1.5 billion the previous year, and there is scope to grow further, India’s top diplomat to Mozambique has told Lusa.

“Mozambique remains one of the main destinations of Indian investment in Africa and our intention is to increase this partnership,” Rudra Gaurav Shresth, the outgoing high commissioner, told Lusa.

Coal, cashew nuts and beans are among the main products that India buys from Mozambique, but the two countries must seek to diversify their trade, he said. To help this happen, he added, India has eliminated tariffs for goods from Mozambique, except for alcoholic beverages and tobacco.

“This project helped Mozambique to increase the level of export of products to India,” Shresth said, adding that it had responded to the concerns of Mozambican producers.

In 2018, India recorded an overproduction of pigeon peas (known in Mozambique as ‘boer’ beans), one of the main products that Mozambique exports to India following an agreement signed during a 2016 visit to Maputo by India’s prime minister, Narendra Modi. The excess supply in India – the only foreign market for this Mozambican agricultural product – led to a drop in price of over 50%, in turn hitting the purchasing power of many farmers in Mozambique and triggering an economic crisis especially in the province of Nampula, in the north of the country, according to a report by a UK non-governmental organisation, International Growth Centre.

Shresth explained that the situation is now back to normal, and that last year Mozambique exported almost 150 tons of pigeon peas to India, up from 125 tons in the previous year.

He also expressed optimism about ties between the two countries in general.

“Mozambique has made a lot of progress,” he said, adding that “there are many things that can be done in terms of cooperation.”

There is, he acknowledged, “much lack of knowledge about Mozambique in India at the level of business, but the intention is to improve this relationship more and more.”

According to Mozambique’s National Statistics Institute, India took 34.3% of the country’s exports last year, at $1.6 billion – almost twice the value of exports to South Africa, which was the top export market in 2016 but is now second.

As for imports by Mozambique from India, the latter is in fifth place, accounting for 7.8% of the African country’s purchases abroad, ahead of France (4.4%) and Portugal (4.2%).

Source: Lusa