High Commission of India

Maputo, Mozambique

India-Mozambique Commercial Relations

Overview: 

Bilateral commercial relations between India and Mozambique have steadily enhanced in recent years. The presence of Indian companies in Mozambique has increased to now number over 50. Indian investments in Mozambique are valued approximately at USD 10 billion. There has been perceptible increase in interest among Indian companies about Mozambique and consequently, the numbers of business visits from India to Mozambique have grown.

Economic Relations

In recent years, India-Mozambique economic relations have steadily deepened and expanded mainly through greater involvement of Indian companies that have invested heavily in the energy resources of Mozambique. 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 Rovuma gas block of Mozambique, at a cost of over USD 5 billion. This was in addition to 10% already held by another Indian PSU, BPRL since 2008, thus making India, the biggest investor in the Rovuma Area-1 gas project that is being operated by the French petroleum giant, TOTAL Energies that has 26% stakes in the project. The other foreign investors are Mitsui (20%), Thai company PTTEP (8.5%) and Mozambican company (ENH) (15%).

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. Vulcan, a fully owned subsidiary of the Jindal Group, acquired the Moatize coal mining asset and the 920-km Nacala Logistical Corridor from the Brazilian mining giant, Vale, in December 2021 for a cumulative investment of US $ 270 million. The acquired coal mine has an annual coal production capacity of 22 million tonnes, although Vale was producing 18 million tonnes of coal per year.  There are also a few Indian companies involved in mining of rubies and gemstones.  

Indian investments in sectors other than mining include Godrej group’s interest in hair & beauty products in Matola, and investments in commercial agriculture by companies like Pure Diets, Rajarambapu Group, and Asian Tea Company. Indian companies are present in automobile sector like Tata and Mahindra. There is increasing interest by Indian companies to invest in newer sectors of Mozambique, including healthcare, education, electricity, information technology, pharmaceuticals, etc.

Apart from investment, bilateral trade between India and Mozambique has also been rapidly growing in recent years. The most important exports from India to Mozambique are refined petroleum products, pharmaceuticals, machinery etc., whereas coking coal, cashew and raw agri products are the leading Mozambican exports to India. There is active and regular exchange between Mozambican and Indian Chambers of Industry. Businessmen of both countries participate in trade fairs and commercial events organized in each other’s countries.

Value: Million US$, DGCIS 

Source: DGCIS

India’s exports to Mozambique comprises mainly of Petroleum products, Engineering goods, Pharmaceuticals, Rice, Fabrics, Bicycles, Machinery, Ceramic products and Glassware, Plastic and Linoleum.  Major item-wise imports from India over the last few years and their associated changes in percentage terms are as follows:                                                                                                                        

Value: Million US$, DGCIS 

Source: DGCIS

Business delegations/representatives from several Indian companies regularly visited Mozambique and the number and frequency of such visits has increased considerably in recent times. Mozambique was the Partner Country in the CII Exim Bank Conclave on India Africa Partnership in 2011. Many Mozambican companies participate in CII EXIM banks conclaves in India every year. Following Indian business houses and companies have dominant presence in Mozambique: ICVL, RITES/IRCON, WAPCOS, Essar group, Pure Diet India Ltd, Raja Ram Bapu group, MozIndia, Bharat Petro Resources Ltd (BPRL) - a 100% subsidiary of Bharat Petroleum Corporation Ltd, Ultra Tech Cements Ltd (Aditya Birla Group), Jindal Steel & Power Ltd (JSPL), Tata Mozambique, Mozambique Holdings, AFCONS Infrastructure Ltd (A Shapoorji Pallonji Group Company), Jaguar Overseas Ltd, GAIL, Escorts Ltd, Vulcan, etc.

Government of India’s Concessional Lines of Credit: India’s developmental assistance to Mozambique has mostly been extended through concessional lines of credit for financing social and physical infrastructure. At present, GOI has a standing commitment of USD 772 million under LOCs for 14 different projects in Mozambique. Until 2010, India had offered Lines of Credit worth about USD 140 million to Mozambique.  These were used for financing projects of rural electrification, drinking water supply and a Technology Development and Innovation Center (TDIC) at an S&T Park. During the State visit of the Mozambican President to India in 2010, an additional LOC envelope of USD 500 million was announced. Some of the smaller projects among these have since made good progress – a food security project worth USD 20 million; a project worth USD 13 million for setting up a solar photovoltaic module plant; and a USD 20 million project for expanding rural drinking water availability have been completed.  However, the larger projects approved under the USD 500 million envelope have seen implementation problems. These larger projects include a US$250 million project for improving the quality of power supply in Maputo and surrounding areas and a US$47 million project for construction of 1200 houses in three Mozambican provinces. USD 250 million LOC was re-offered to Mozambique in 2019 for improving electricity supply in Maputo and adjoining areas and the LOC agreement was signed in August 2020. Similarly, the revised DPR for the housing project under US $ 47 million LoC extended by Government of India is being prepared by the Government of Mozambique. As regards LOC of USD 150 million for rehabilitation of the Tica-Buzi-Nova Sofala road project, President Nyusi had laid the foundation stone for the project on 7 September 2018. In 2018, following IMF’s relaxation of sanctions imposed on Mozambique in 2016 following revelation of the hidden debt scandal, GoI sanctioned LoC of USD 38 million for rural drinking water project in Nampula, Zambezia, Sofala and Manica provinces. The LoC agreement for USD 38 million was signed on 20th March 2019 and is being implemented. GoI also approved LoC of USD 95 million for purchase of Railway rolling stock including locomotives, wagons and coaches and the LoC agreement was signed on 31st December 2018.

Grants/Assistance: Besides LOC support, India has also extended limited grant assistance to Mozambique. During the Mozambican President's visit to India in 2010, a grant of US$ 4.5 million was announced for assisting the Mozambican police forces. Through this modality, three anti-riot vehicles, 100 anti-riot guns and ammunition and some protective gear, as well as 5000 solar lanterns at a total cost of approximately US$773,000 were provided to the Mozambican Government. Subsequently, a part of the grant was used for training 6 Mozambican police officers at the Gujarat Forensic Sciences University (GFSU) in Ahmedabad for Master’s Programme. Substantial part of the money was used for purchasing 40 Mahindra SUVs and 6 Tata Armoured Personnel Carriers for the Mozambican Government from the local subsidiaries of these Indian companies. RM gifted 44 SUVs amounting to USD 621500/-, as part of the USD 4.5 million grant, to Mozambican Interior Minister in July 2019. During the visit of Prime Minister in July 2016, India announced an in-kind donation of 100 tons of essential medicines to Mozambique out of which two lots of medicines have already been handed over to Mozambique while the third lot is being processed by us. In early 2017, Ministry gave a separate cash-grant of USD 1 million to the Mozambican Health Ministry, for purchase of Indian-manufactured health equipment. Some medical equipment was also gifted to Mozambique in July 2018. A major grant assistance to Mozambique was the cash-grant of USD 10 million given in December 2016, for purchase of wheat from the world market, due to shortage of food caused by two successive years of drought in certain parts. Following Mozambique’s request, India donated 100,000 doses of Covishield vaccines to Mozambique in March 2021 and another 720,000 doses of the same vaccine in December 2021 under the Covax initiative.

On February 14, 2022, India and Mozambique signed a MoU for implementation of a Drinking Water Project at the Mueda District, which is the home district of President Nyusi, in the Cabo Delgado province under Government of India’s grant assistance of US $ 10 million. The project would be implemented shortly. 

India also donated Covid-19 related assistance package comprising of PPE kits, hand sanitizers and face masks to Mozambique besides 2 Mahindra SUVs to Mozambique in early 2022.

Trade Agreements

• A Trade Agreement was signed between India and Mozambique in 1982. During the second Joint Commission meeting held in New Delhi in February 2009, the Indian side handed over a draft of a new trade agreement. The Mozambican side had conveyed in August 2013 that they were ready to sign the agreement, which is presently under consideration on our side.

• Agreement on Bilateral Promotion and Reciprocal Protection of Investment (BIPA) was signed in February 2009. The agreement has been ratified by both the governments.

• Double Tax Avoidance Agreement (DTAA), MOU on cooperation on promotion of Micro, Small and Medium Enterprises, and MOU on cooperation in the field of Mineral Resources were signed in September 2010.

• Memorandum of Understanding on cooperation in the field of Oil and Gas was signed in November 2014.   
• Memorandum of Understanding on Cooperation in the field of New and Renewable Energy was signed during State Visit of President Nyusi in August 2015.

January 2024