From an underdeveloped African nation, Zambia over time has metamorphosed into an open economy characterised by macroeconomic stability. The Zambian economy has recorded a modest growth with the country’s real Gross Domestic Product (GDP) rate touching 5.8% in 2008.Retail, construction, mining, manufacturing and tourism are some of the key drivers of the Zambian economy. These drivers have served to maintain a sustained growth over the past few years.
Encouraged by the investment-friendly conditions prevailing in Zambia, a large number of Indian SMEs are turning towards this African country to capitalise on its largely untapped market potential.
Trends in bilateral trade
Although bilateral trade between India and Zambia has progressed at a rather slow pace, in recent times both countries have aggressively pursued measures to facilitate increased trade and investment.
As a result, today India is considered as one of the major exporting destinations for non-traditional Zambian products. Significantly, total trade volume between India and Zambia stood at around $207 million in 2007-08 .
Zambia imports fabrics, semi-furnished iron and steel, leather goods, electronics, organic and inorganic chemicals, metals, cotton yarn, tea and coffee from India. Alternatively, Zambia exports commodities like wood and wood products, crude minerals, gold and silver, precious and semi precious stones and scraps to India.
Untapped market
In the past few years, the Zambian government has taken a number of significant measures to privatise the major sectors in the country. Several export processing zones have been set up and non-regulatory programmes have been initiated to promote foreign direct investment (FDI) in the country.
This has created abundant opportunities of trade and investment for Indian SMEs engaged in various sectors. Agricultural equipment, tourism, manufacturing, mining, telecommunications and transport are some of the major industries that are drawing investors from different parts of the world.
Indian SMEs can look at tapping in to Zambia’s rich mineral resource base for undertaking small projects that are mutually beneficial. Likewise, Zambia’s tourism industry offers long-term growth opportunities for small and mid-sized Indian players, especially in the field of outdoor sports amenities, holiday resorts, and game ranches.
Other areas that can be explored by Indian SMEs for trade and investment include education, transport, banking, construction and healthcare.
Efforts undertaken
To attract Indian SMEs in the country, the Zambian government has implemented various regulations that would prove highly beneficial to the small and mid-sized players in the long run. The Zambia Development Agency (ZDA) has established a multi-facility economic zone targeted mainly at the Indian SMEs. This economic zone was set up to enable Indian SMEs establish their manufacturing units in Zambia.
Furthermore, in an attempt to encourage increased Indian SME participation in the Zambian economy, the Small and Medium Enterprises Development Chamber, India and the government of Zambia have recently signed a Memorandum of Understanding (MoU). Through this MoU, the Zambian government is looking at facilitating technical cooperation and future collaborations between Indian and Zambian SMEs.
The Zambian government anticipating investment worth $100 million from the Indian SMEs has assured full support to this segment. This is expected to provide major impetus to the Indian SMEs looking at venturing into the Zambian market.
Encouraged by the investment-friendly conditions prevailing in Zambia, a large number of Indian SMEs are turning towards this African country to capitalise on its largely untapped market potential.
Trends in bilateral trade
Although bilateral trade between India and Zambia has progressed at a rather slow pace, in recent times both countries have aggressively pursued measures to facilitate increased trade and investment.
As a result, today India is considered as one of the major exporting destinations for non-traditional Zambian products. Significantly, total trade volume between India and Zambia stood at around $207 million in 2007-08 .
Zambia imports fabrics, semi-furnished iron and steel, leather goods, electronics, organic and inorganic chemicals, metals, cotton yarn, tea and coffee from India. Alternatively, Zambia exports commodities like wood and wood products, crude minerals, gold and silver, precious and semi precious stones and scraps to India.
Untapped market
In the past few years, the Zambian government has taken a number of significant measures to privatise the major sectors in the country. Several export processing zones have been set up and non-regulatory programmes have been initiated to promote foreign direct investment (FDI) in the country.
This has created abundant opportunities of trade and investment for Indian SMEs engaged in various sectors. Agricultural equipment, tourism, manufacturing, mining, telecommunications and transport are some of the major industries that are drawing investors from different parts of the world.
Indian SMEs can look at tapping in to Zambia’s rich mineral resource base for undertaking small projects that are mutually beneficial. Likewise, Zambia’s tourism industry offers long-term growth opportunities for small and mid-sized Indian players, especially in the field of outdoor sports amenities, holiday resorts, and game ranches.
Other areas that can be explored by Indian SMEs for trade and investment include education, transport, banking, construction and healthcare.
Efforts undertaken
To attract Indian SMEs in the country, the Zambian government has implemented various regulations that would prove highly beneficial to the small and mid-sized players in the long run. The Zambia Development Agency (ZDA) has established a multi-facility economic zone targeted mainly at the Indian SMEs. This economic zone was set up to enable Indian SMEs establish their manufacturing units in Zambia.
Furthermore, in an attempt to encourage increased Indian SME participation in the Zambian economy, the Small and Medium Enterprises Development Chamber, India and the government of Zambia have recently signed a Memorandum of Understanding (MoU). Through this MoU, the Zambian government is looking at facilitating technical cooperation and future collaborations between Indian and Zambian SMEs.
The Zambian government anticipating investment worth $100 million from the Indian SMEs has assured full support to this segment. This is expected to provide major impetus to the Indian SMEs looking at venturing into the Zambian market.
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