High Commission of India

Lilongwe, Malawi

Lilongwe
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Brief on India- Malawi Commercial Relations

India-Malawi trade relations are historic and date back to 18th century, coinciding with the arrival of Indian tradesmen, predominantly from the Indian State of Gujarat to Eastern Africa.

India had established diplomatic relations with Malawi since it gained independence in 1964.  However, the High Commission’s resident mission, wound up in 1993 and re-opened in March 2012 after a gap of 19 years. Hence trade and business relations have not taken off in the manner, it has in the neighbouring countries to Malawi like Zambia, Tanzania and Mozambique, with whom Malawi shares its land borders.

The then Vice President of India H.E. Mr. Hamid Ansari, visited Malawi in January 2010 and the late President of Malawi H.E. Mr. Bingu wa Mutharika visited India in November 2010, which then led to the re-opening of the Indian Mission in 2012. The Malawian High Commission in Delhi was set up in 2007. They have also set up a Business office in the Surat Chamber of Commerce.

The high-level visit was that of the Hon’ble President Smt. Droupadi Murmu from 17 to 19 October, 2024. While in Malawi Hon’ble President Murmu addressed businessmen from Malawi and India during India-Malawi Business Roundtable Meet in Lilongwe. High Commission coordinated with Chamber of Indian Industry (CII), Malawi Confederation Chamber of Commerce and Industry (MCCCI) in organising the Business Meet.

Vice President of India, Hon. Venkaiah Naidu also visited Malawi during the period 4th- 5th November 2018. 

Shri V. Muraleedharan, Minister of State for External Affairs visited Malawi from 08-10 June 2022.

Malawi Government officials at CII-Exim Bank conclaves

Prior to the VVIP visit to Malawi, former State Vice President of the Republic of Malawi Dr. Saulos Klaus Chilima visited India as the Guest of Honour at the 13th CII-Exim Bank conclave in New Delhi India. He was accompanied by two cabinet Ministers, the Minister of Trade, Industry and Tourism Hon. Henry Mussa M.P and Hon. Dr Emmanuel Fabiano M.P. Minister of Foreign Affairs and International Cooperation. The Vice President delegation included a 60-member delegation of senior officials from both the private and public sector.

Since then, Cabinet Ministers from Malawi have been attending the CII-Exim Bank conclaves. In the year 2019 Hon. Francis Kasaila (MP) in his capacity as Minister of Industry, Trade and Tourism visited India at the 14th CII-Exim Bank Conclave in New Delhi, India.  

In 2022, Malawi delegation led by the then Minister of Trade Mark Katsonga Phiri attended the 17th CII-Exim Bank Conclave on India-Africa growth partnership held in India. Chief Executive Officer for MITC, Paul Kwengwere  was among the delegates. During that conclave some of the investors were interested in manufacturing, education, health as well as mining sectors. In 2023, Minister of Trade and Industry, Mr. Simplex Chithyola Banda led the delegation which included Minister of Energy, Ibrahim Matola at the 18th CII -Exim Bank Conclave on India -Africa Growth Partnership. 

In 2024, Minister of Trade and Industry, Mr. Sosten Gwengwe led Malawian delegation which included Minister of Agriculture, Minister of Finance and Economic Affair, and Deputy Minister of Health at the  19th CII India Africa Business Conclave, held from August 20th to 22nd, 2024, in New Delhi.

Malawi as an LDC, is also a beneficiary under GoIs Duty-Free Tariff Preference Scheme (DFTPS) introduced in April 2008. 

 Trends in India-Malawi Bilateral Trade (Trade Statistics India-Malawi, In US Million Dollars)

Source: Ministry of Commerce and Industry, Department of Commerce, GOI (www.commerce-app.gov.in)

Major Exports from Malawi To India

Malawi’s exports to India are very limited and are primarily agricultural products -mainly Dried leguminous vegetables (Including Pigeon Peas (unprocessed Tur dal), Chickpeas and other related pulses). Dried leguminous vegetables, which used to be the major item of export from Malawi to India have been however affected, due to the change in the Trade Policy on import of Tur Dal since August 2017. The export of dried leguminous vegetables (including pigeon peas) by Malawi to India had initially seen a drastic fall from US$39.32 million p.a. in 2016-17 to US$9.05 million in 2017-18, a drop of approximately 76.9%. This was followed up by a resurgence in the imports of pigeon peas to US$14.32 million in the 2018-19 financial year.  In the period April to December  2019, India imported pigeon peas worth  US$28.82 million from Malawi.

In comparison to the higher imports of pigeon peas previously, the trade policy on importation of pigeon peas in India adversely affected Malawi, both in foreign exchange earnings and a greater impact on the farmers, who traditionally have been growing Pigeon Peas for the Indian market. 

However, On June 16, 2021, Malawi and India signed a MoU on cooperation in the field of trade of 50,000 metric tonnes of pigeon peas’ export from Malawi to India every year in the next five years which will improve Malawi export basket to India. India removed the waiver of a 50 000 metric tonnes (MT) export quota imposed on Malawi in 2022. Malawi exported 52,000 mt of pigeon peas to India in 2022 valued at US$13.65 million. In 2023 Malawi exported Pigeon Peas amounting to US$49.29 million to India while US$9.62 has been exported in the first quarter of 2024. 

Top Ten Exports from Malawi to India (2023-24)

Major Imports from India by Malawi

Major Malawi imports from India are: pharmaceutical products, industrial machinery commercial vehicles, Iron and steel pipes and sheets. 

Indian pharmaceuticals account for close to 53.14% percent of Malawi’s total import of pharmaceuticals and amounted to US$80.22million in 2020-21. The scope to increase the market share for Indian pharmaceuticals is still high as health remains a priority sector for the government of Malawi. In FY 2023-24, Malawi imported Pharmaceuticals amounting to US$24.66 million

Other items with export potential to Malawi, based on import demand include electronic machinery and equipment, mechanical machinery, printed books, fertilizers, iron and steel, chemical products etc.

The current challenge of international trade in Malawi is the shortage of forex. 

Top Ten Imports from India to Malawi (2023-24)

Source: Ministry of Commerce and Industry, GOI (www.commerce-app.gov.in)

Balance of Trade

In the period FY 2023-24, the India exports to Malawi stood at  US$ 87.18 million and imports from Malawi at US$58.49 million the balance of trade was in favour of India with US$28.69 million while the total trade was US$145.67 million.

In FY2022-2023, exports from India to Malawi was at US$114.63 while exports from Malawi to India was at US$42.76. The total trade during the period was US$157.39 million and the balance of trade was US$71.87 million in favour of India. The primary reason for the decrease in import of goods and commodities from India was due to severe forex shortage induced by Covid -19 related slowdown. 

Indian Investments

While official figures of Indian Investments are not available, it is estimated that over US$500 million has been invested in Malawi. As per an official document of Ministry of Finance released in April 2018, Indian Private Capital has a share of 19% and is the largest single contributor in the Malawi economy, with China being 12%, Africa as a whole’s contribution being 21% and the rest of the world being 48%.  Indian investment is also the largest contributor to the creation of private sector jobs in Malawi.

There are about 8500 persons of Indian origin and 8500 Indian nationals currently residing in Malawi. The Indian community is primarily engaged in trade. There are about 100 Malawian Indian origin owned companies are registered in Malawi since its inception in 1993 with the Malawi Investment & Trade Centre (MITC).

Most Indian businesses are engaged in Agro processing, Alcoholic beverages, Construction, Energy sector, Financial service & Insurance, Food processing, Health Sector in Diagnostic services, Information Technology & Software development, Logistics, Mining, Transport, Textile, Cosmetics & Pharmaceuticals, Fertilizers, manufacturing like Cement, Packaging, Plastics, Hotel & hospitality etc. The commercial and manufacturing activity is mainly concentrated in Blantyre in the southern region of Malawi.

Indian Companies Tata, Ashok Leyland, Bharti Airtel, Bajaj Auto, TVS, Atul Auto, Eicher, Mahindra are prominent through their authorised dealers. Kirloskar generators, Escorts, Godrej and SuKam are other Indian company products with a presence in Malawi.

India owned construction company Plem Construction, is actively contributing to the construction sector. Two Indian companies Larsen and Toubro and Kalpatatru Power Transmission Ltd presence in Malawi are noticeable. Both have carried out projects under the Millennium Challenge Fund with Larsen and Toubro constructing a 400 KV substations in Malawi for US$34.2 million. Kalpataru Power Transmission Ltd constructed the 132 Transmission Line, a 6KV transmission line  1.5KM single circuit self-supporting steel tower, the construction of the 66KV Lilongwe Ring – 32KM as well as the 132KV OHL transmission line, 30 Km single circuit self-supporting steel power at US$23 million. These projects were completed in the year 2017. L&T, India is involved in Malawi-Mozambique Power Interconnection Project and the Indian company will do the construction works of transmission lines and the extension of a substation.

Brief Statistics on  the Macro-Economy

The bank rate as of February 28, 2024 stood at 26.00% however, high domestic borrowing by the government continues to produce a crowding out effect and resulting in low private sector borrowing. The Malawi Kwacha is currently trading at  US$1=MK 1,751

Chamber of Commerce in Malawi

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) is a partnership of enterprises and associations representing all sectors of the economy of Malawi. The Chamber of Commerce has been in the forefront of Malawi’s private sector development efforts for over 100 years. Established in 1892, the first Chamber organization operated as a Chamber of Agriculture and Commerce to reflect the predominant focus of the economy on agriculture production and trade.

December 2024