By Naome Namusoke/ KMA updates
Kampala – Calls for reforms to strengthen trade and investment between Uganda and India have taken a centre stage today at the India–Uganda Bilateral Relations Forum held in Kampala under the theme “Opportunities for Trade, Investment and Collaboration.”
Research findings presented by the Economic Policy Research Centre (EPRC) reveal that while India is a vital partner for Uganda, several barriers still hinder business growth. These include restricted market access, complex visa processes, a high cost of doing business, and weak inter-agency coordination.
According to EPRC Executive Director Dr. Sarah Ssewanyana, India remains a top source of investment and imports for Uganda. In 2024, Uganda imported goods worth over USD 1.3 billion from India, ranging from pharmaceuticals to industrial machinery.
India’s foreign direct investment (FDI) in Uganda has also surged, rising from USD 128 million in 2016 to USD 353 million in 2023, generating jobs and contributing significantly to Uganda’s National Development Plan.
However, Uganda continues to grapple with a widening trade imbalance. In 2024, Uganda’s trade deficit with India stood at USD 208 million, underscoring the need to diversify exports and tap into value addition.
“Opportunities exist in agro-processing, services, and manufacturing that can help bridge this deficit, but for this to happen, barriers on both sides must be addressed,” Dr. Ssewanyana emphasized.
The EPRC research presented at the forum highlighted four urgent reforms, including the need for India to relax market access requirements for Ugandan goods, Uganda to streamline visa processes to attract more Indian investors and professionals, finding solutions to lower the cost of capital and ease access to work permits, and improving inter-agency coordination to cut bureaucratic hurdles.
India’s High Commissioner to Uganda, Upender Singh Rawat, stressed that Uganda and India must identify new areas for growth such as e-commerce and pharmaceuticals. He reiterated that India offers a duty-free system for Ugandan exports, a window the country should exploit to increase its exports.
The private sector continues to drive bilateral relations. Rajesh Kumar, Chairman of the Indian Business Forum, has highlighted that Indian businesses contribute over 65% of Uganda’s tax revenue. He recalled that during the Afro-India Summit of 2022, Uganda and Indian investors signed deals worth USD 470 million, underlining India’s strong role in Uganda’s economic base.
Representing the Permanent Secretary and Secretary to the Treasury, Moses Kaggwa, the Acting Director of Policy and Economic Affairs at the Ministry of Finance, reaffirmed government’s focus on the 10-Fold Strategy, a blueprint for economic growth.
He noted that the plan emphasizes four priority sectors: agro-industrialisation, tourism development, mineral development including oil and gas, and science, technology, innovation, and the creative sector.
He further pointed to major investments in infrastructure, including the EUR 2.7 billion rehabilitation of the meter gauge railway to ease trade flows and complement the Standard Gauge Railway project. Uganda’s electricity production has also expanded to exceed current demand, boosting industrialization prospects.
Economic Outlook
Uganda’s economy grew by 6.3% in 2024, outperforming the Sub-Saharan African average. The Ugandan shilling has also appreciated by 4.4% against the US dollar, making it one of Africa’s most stable currencies.
Experts at the India-Uganda bilateral relations forum have agreed that while the relations are strong, addressing structural barriers is critical to deepening trade and investment ties. If implemented, reforms in visa processing, business facilitation, and trade access could help Uganda reduce its trade deficit and strengthen its role in regional and global value chains.