Centre of trade routes

Mozambique enjoys a strategic location in Southern Africa, near major global routes for coal, oil, and other major minerals. It offers sea access to landlocked members of the Southern African Development Community (SADC) such as Botswana, Zambia and Zimbabwe.

The Port of Maputo is of huge economic importance to the country and receives rapidly growing volumes of trade from around the world, especially South Africa, Botswana, Swaziland and Zimbabwe. The port is expected to handle 40 million tonnes of goods annually by 2020. It is Southern Africa’s nearest port to the emerging markets of Asia and the closest deep water port to South Africa’s capital Johannesburg and its provinces Mpumalanga and Limpopo.

Improving economy

Mozambique’s economy has been one of the most dynamic on the continent. Despite encountering a debt crisis in 2016, the country is in process of recovery – achieving a real GDP growth of 2.28% in 2019.

Growth has been driven by increasing amounts of public expenditure and foreign direct investments that have been funding massive infrastructure projects.

The recent discovery of gas just off the country’s coast has the potential to further boost growth in the longer-term, with the government predicting multi-billion-dollar annual revenues after 2022.

Abundant natural resources

With Mozambique’s wealth of natural resources, foreign investors have expressed interest in exploring resource development projects. It has been proven that the country has natural gas reserves of 2.83 trillion cubic metres, located at Pande and Temane in Inhambane province.

Key metallic resources include iron ore, gold, bauxite, graphite coal as well as gemstones such as rubies. Mozambique also possesses the rare and important mineral tantalite – of which it might have one of the largest reserves in the world.

Despite abundant natural resources, Mozambique has not fully explored its potential – offering many opportunities for foreign investors to tap.

Profiled Industries

Agriculture

Agriculture is the backbone of the economy, providing employment for 80% of the workforce and contributing 24.04% of GDP in 2019. Mozambique’s produce includes beans, cashews, cassava, citrus, copra, cotton, groundnut, maize, rice, sugarcane, sweet potato, tea and tobacco.

Oil and Gas

Mozambique is rapidly becoming a key player in international oil and gas market especially in natural gas and coal. The country is expected to be among the world’s top 10 producers of natural gas and coal by 2030. In addition, the government’s approval of the $20 billion Natural-Gas Plan also presents opportunities for partnerships in the growing industry.

Tourism

Mozambique’s allure as a tourist destination is due to its long Indian Ocean coastline with sandy beaches and clear waters, as well as scenery and wildlife. Beach tourism has expanded along the southern coast, including the islands of the Bazaruto Archipelago in Inhambane province.

Annual tourist arrivals rose sharply in the 2000s to a peak of 2.1 million in 2012, though they have since declined to 1.6 million in 2016.

Education

Major investments in various sectors have created an increasing demand for a more qualified workforce, and thus a corresponding need to ensure that local graduates have the required skills. Mozambique has therefore been making efforts to improve the quality of education, such as opening more technical schools.

India enjoys warm and substantive ties with Mozambique. Trading links between Mozambique and the western states of India go back several Centuries, and pre-date the colonial era. These ancient people-to-people links have been built upon in modern times, to forge a strong bilateral relationship based on regular political contacts, ever-deepening economic engagement, and a well-integrated Indian community in Mozambique.

Political Relations
After 1947, independent India’s support for the Mozambican freedom struggle established the basis for warm political ties between the leaderships of both countries. Diplomatic relations between India and Mozambique were established as soon as Mozambique became independent in 1975, and India was among the first countries to set up a diplomatic mission in Mozambique. Mozambique opened its Mission in New Delhi in 2001.

Since the independence of Mozambique, there have been frequent contacts between the leaderships of both countries. All four Mozambican Presidents have visited India – President Samora Machel in April 1982, President Joaquim Chissano in May 1988 and again in May 2003, President Armando Guebuza September-October 2010, and President Filipe Nyusi in August 2015. From the Indian side, Prime Ministerial visits have taken place twice – Smt. Indira Gandhi in August 1982 and Shri Narendra Modi in July 2016.

Mozambique and India have signed a number of bilateral agreements and Memoranda of Cooperation for structuring collaboration in different areas. These agreements cover sectors like agriculture, rural development, scientific and technical research, protection of investments, avoidance of double taxation of each other’s nationals, small and medium enterprises, mineral resources, oil and natural gas, defence cooperation, etc.

India’s development partnership with Mozambique

In recent years, India’s support for Mozambique’s development agenda has become an important priority within the bilateral relationship. Most of this assistance has been provided through concessional lines of credit (LOC) implemented through EXIM Bank of India. Until 2010, India had carried out LOC-funded projects worth about USD 140 million in Mozambique. During President Guebuza’s visit to India in 2010, further LOC support of USD 500 million was announced. Through these projects, India has extended support to Mozambique in diverse areas – provision of drinking water, improving power generation and distribution, improving agricultural productivity, rehabilitation of irrigation infrastructure, creation of an Information Technology park, construction of an assembly plant for solar cells, rehabilitation of road networks, construction of housing units, etc.

The most visible and appreciated form of development support provided by India to Mozambique is in the form of scholarships and training opportunities in India. The number of Indian scholarships available for Mozambican students to pursue Undergraduate and Postgraduate studies in India has been increasing in recent years. In addition, Government of India sponsors a large number of short-term training courses for public functionaries working in the Mozambique Government. These educational and training scholarships have not only helped improve human resources within Mozambique, but have also helped to strengthen people-to-people links between both countries.

Some recent examples of Indian development and humanitarian assistance to Mozambique include the donation of USD 10 million to Ministry of Trade & Industry in 2016 for purchase of wheat for the drought-affected population, a donation of 100 tons of essential medicines for the Ministry of Health, and donation of transport vehicles for the Ministry of Interior.

Economic Relations
In recent years, deepening economic interests have become the most important vector of India-Mozambique relations. Indian companies have invested heavily in the energy resources of Mozambique and by some estimates these investments amount to almost a quarter of India’s total FDI in Africa. The most important investments have been in the natural gas and coal industries. In 2014, two Indian Public Sector Companies, ONGC Videsh Ltd. and Oil India Ltd. completed the acquisition of 20% stake in Area 1 of the huge Rovuma gas block of Mozambique, at a cost of over USD 5 billion. This was in addition to the 10% stake already held in the same block by another Indian PSU, Bharat Petro Resources Ltd. In the coal mining sector, in July 2014, International Coal Ventures Private Ltd, a consortium of five Indian PSUs (SAIL, NMDC, RISL, CIL and NTPC) purchased a 65% stake in the coal assets sold by Rio Tinto. Other Indian companies with a presence in the coal mining sector include JSPL, JSW, Coal India Ltd, Tata Steel, Essar, Midwest Africa, Sunflag group, etc.

Indian investments in sectors other than mining include the Essar group’s interest in developing a coal terminal at Beira port, and investments in commercial agriculture by companies like Pure Diets, Rajarambapu Group, HK Jalan group and Asian Tea Company. There is increasing interest by Indian companies in investing in newer sectors in Mozambique, including healthcare, education, information technology, pharmaceuticals, etc.

Apart from investment, bilateral trade has also been growing fast in recent years. The value of trade between the two countries stood at 3 billion in 2019-20. This was an improvement of 38.63% compared to 2018-19 level of US$ 2.17 billion. The most important export commodities from the Indian side are refined petroleum products and pharmaceuticals, whereas coal and cashew have been the leading items among Mozambican exports to India. There are regular exchanges between the Mozambican and Indian Chambers of Industry, which take part in trade fairs and commercial events organised in the other country.

Mineral  fuels, pharmaceuticals, vehicles, plastics, machinery, cotton, fertilizers.

The products with greatest export potential from India to Mozambique are Semi-milled or wholly milled rice, Medicaments consisting of mixed or unmixed products, for retail sale, and Aluminium oxide, n.e.s. Semi-milled or wholly milled rice shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional exports worth $174.1 mn.

High Commission of India

Av. Kenneth Kaunda No. 167
Post Box No. 4751
Maputo (Mozambique)
Telephone: +258-21492437 / 21490717
Fax: + 258-21492364
E-Mail: hoc[dot]maputo[at]mea[dot]gov[dot]in