By Faridah N Kulumba
Africa-Press – Uganda. The government of India revealed in June this year that they are eager and ready for more partnerships with Uganda in sectors of trade and investment.
This was revealed during an interview between Mayank Singh India’s Joint Secretary (E&SA) Ministry of External Affairs and our reporter Faridah N Kulumba who was invited to India with other media professionals and Editors from Africa on a familiarization that was organized by India’s Ministry of External Affairs.
For centuries European countries had dominated trade and investment in Uganda. Surprisingly in the twenty-first century, the boundary of the trade geography dramatically changed, with Uganda cooperating more with the Gulf region, India, and China.
Bilateral ties
Mr Singh in an interview with Africa-Press said India is searching for ways of enhancing cooperation between the two nations in different domains. He added that India is willing to work with Uganda on several projects but this can be achieved if they are approached. In recent years India seeks to strengthen bilateral ties with Uganda through signing several trade and investment cooperation.
The two nations share a strong and multifaceted relationship, based on the historical Memorandum of Understandings (MoUs) that were signed to enhance their relations into various sectors like political, economic, cultural, capacity building trade pharmacy and defence cooperation.
In September 2023 Uganda Airlines started a direct flight to Mumbai-India to the Indian to ease transport and trade between the two countries. India and Uganda have a growing trade relationship, with annual bilateral trade statistics reflecting their economic cooperation.
In 2018, India exported goods worth USD 561.82 million to Uganda, while importing goods worth USD 748.47 million from Uganda. In 2019, India’s exports to Uganda amounted to USD 576.62 million, while imports from Uganda totalled USD 868.37 million. In 2020, Exports from India to Uganda increased to USD 655.73 million, with imports from Uganda valued at USD 745.22 million.
And in 2021, India’s exports to Uganda reached USD 694.56 million, while imports from Uganda amounted to USD 839.11 million. The two nations bilateral trade has been increasing, with India being a major trading partner and investor in Uganda.
India’s strategic plan
By boosting trade and investment partnership with Uganda, India is aiming to foster stronger economic ties and leverage Uganda’s potential as a gateway to the African market. This is attributed to a combination of historical ties, a large Indian diaspora in Uganda, and mutual benefits from increased trade and investment. Strategy-India seeks to cultivate strong diplomatic and economic relationships with African nations, and Uganda, as a key East African country, is a crucial part of this strategy. Trade-India views Uganda as a key partner in its broader strategy to increase trade with Africa. Uganda’s participation in the Duty-Free Tariff Preference (DFTP) scheme for Least Developed Countries (LDCs) makes it an attractive destination for Indian exports like pharmaceuticals, vehicles, and plastic products.
However, Authorities in the Pharmaceuticals Export Promotion Council of India’s shared a current report with Africa Africa-Press that showed that India’s pharmaceutical exports to Uganda in FY 2024-25, declined slightly by USD 21.18 million. And this might be one of the reasons India is pushing for more partnership with Uganda in this sector.
Uganda is one of the countries attracting the most Foreign direct investment (FDI) in East Africa. According to the United Nations Conference on Trade and Development’s (UNCTAD’S) 2022 World Investment Report, FDI in Uganda increased by 30 percent from USD 874 million in 2020 to USD 1.1 billion in 2021.
Investment- India is interested in investing in Uganda’s key sectors like agriculture, mining, digital infrastructure, and manufacturing. The establishment of the India-Africa Institute of Foreign Trade (IAIFT) in Uganda, along with a Food-Processing Business Incubation Centre, demonstrates India’s commitment to building local capacity and promoting entrepreneurship. Technology-Uganda can learn from India’s development experience, particularly in areas like technology and entrepreneurship. Indian companies are involved in developing Uganda’s digital payment infrastructure and other digital solutions. One of the consultancy firms that India wishes for partnership with Uganda in this era of migrating from analogue to digital is the National Payments Corporation of India (NPCI) a company that operates digital transactions and settlement systems in India,
Natural resources – Uganda’s mineral wealth, particularly iron ore and gold, is attracting Indian investment in the mining and manufacturing sectors. The discovery of huge gold deposits, oil, and gas reserves plus the hydroelectric potential has also seen many foreign investors cherishing the country
Other factors attract India to Uganda
FTA- the President of Uganda Yoweri Kaguta Museveni in 2024, acknowledged that initiatives like the East African Community and the African Continental Free Trade Area are expanding Uganda’s market access, making it easier for investment.
Motivation: in recent years the government of Uganda decided to give incentives to foreign investors such as tax holidays and quota-free which have attracted more foreign investors to do business in Uganda.
Uganda’s wise economic policies had a great impact in making Uganda an economic destination for foreign investors, as he worked to grant facilities and opportunities for investment, which promoted the growth of the economy, and the entry of many foreign and Arab capitals. There is no doubt that the current Ugandan economy is considered one of the fast-developing economies in East Africa.
Growing population: in 2023, while President Museveni was addressing the United Arab Emirates business investors, he said that it was wise for any business-minded person to invest in Uganda because of its large market of 43 million people, the East African market of 300 million people that is tax-free and quota-free and also take advantage of the African market that has been united through the signing of the continental free trade area agreement. Stability: under the current regime Uganda has experienced relative political stability and economic growth.
The two countries share strong trade ties, with India being a significant trading partner and investor in Uganda. Uganda benefits from India’s Duty-Free Tariff Preference (DFTP) Scheme for Least Developed Countries.
For More News And Analysis About Uganda Follow Africa-Press
