Indian Business Targets Tanzania's Middle Class (

INDIAN businesses are targeting to exploit Tanzania’s growing middle class which demands more energy, automobiles, food and electronic products.
Indian Institute of Foreign Trade (IIFT) Director, Dr Surajit Mitra said in Dar es Salaam last week that Tanzania is rapidly becoming a major trading partner of the Asian nation in terms of exports and foreign direct investment (FDI).
“In 2013, exports from Tanzania to India grew by 18 per cent while imports were 17 per cent which represents one of the best results for your country,” Dr Mitra told local business people, government officials and private sector leaders.
He said the country which is home to an estimated 40,000 Indian immigrants and another 8,000 expatriates, is growing rapidly which has led to the bulging of middle class families demand more roads, schools and other social services.
“But the nature of products being imported are also changing, your country is importing more tractors, trucks, machinery other than consumables,” he pointed out.
Tanzania National Business Council (TNBC) Executive Secretary, Mr Raymond Mbilinyi, said the government has taken a number of initiatives to improve the investment climate locally following demands from the private sector.
“Because of such good investment conditions, we have also seen bilateral trade between our two countries grow, Indian foreign direct investment also increase,” Mr Mbilinyi noted.
He pointed out that reduction of red tape in business deals, improved infrastructure and good diplomatic relations between Dar es Salaam and New Delhi trade and investment will continue to improve.
“The two countries have already come closer through reduction of trade barriers, signing of memorandum of understanding between Indian and Tanzanian entities in business and services sector,” the TNBC Executive Director noted.
Mr Mbilinyi however noted that there are many other barriers which need to be address such as dovetailing regulatory bodies, nuisance taxes and poor infrastructure. Director of Trade and Marketing from Ministry of Trade, Industry and Marketing, Mr Odilo Majengo said growing bilateral trade has made India as a leading trade partner for Tanzania.
Mr Majengo said while cashew nut, minerals and spices remain major exports to the Asian nation, imports include agricultural machinery, automobile, garments, pharmaceuticals and natural gas for energy.
He noted that Special Economic Zones and Export Processing Zones have made the country’s investment climate better hence making it a major investment destination for Indian players.
Indian High Commissioner, Sri Debnath Shaw said the two countries are also sharing knowledge and technology through bilateral trade.
Mr Shaw pointed out that bilateral relations between the two countries which have lasted several decades and the more recent trade and industrial collaborations are important to tame poverty through equitable growth.
He noted that because of such good relations, Indian investors are increasing their presence in the country naming major Indian brands like Bajaj, TVS, Mahindra, Tata, Reliance, Bank of Baroda and Bank of India as some of them.
“Among other Indian initiatives and emerging trends including credit in farm machinery, trucks for defence, water supply, Indian partnership with Tanzanian government in the field of information communication technology, scholarships for local students for education in India, medical tourism etc,” he pointed out.
Mr Shaw noted that Indian companies now want to venture into oil and gas sector where the Asian nation has played a major role before.
Last year, Indian energy firm, Oil and Natural Gas Corporation Limited promised to bid for an oil and gas exploration block. The company’s Executive Director responsible for Exploration, Dr Anil Bhandari said in Dar es Salaam during a visit that ONGC Videsh will likely start exploration this year.
“We hope to have an oil rig working by next year,” said Dr Bhandari who was among 100 business senior executives who were in the country for a two-week visit.
ONGC has already invested some five billion US dollars in neighbouring Mozambique and has also presence in Sudan, Nigeria and Libya. “We hope to meet the Deputy Minister for Energy before leaving to discuss more on this subject,” he said.
ONGC Videsh Ltd which is Indian state owned Oil and Natural Gas Corp, is an international arm of ONGC. Established as Hydrocarbons India Private Limited on March 5, 1965, the company changed its name to ONGC Videsh Limited in 1989.
The primary business of the company is to prospect for oil and gas acreages abroad. These include acquisition of oil and gas fields in foreign countries as well as exploration, production, transportation and sale of oil and gas.
Source: Business