Somalia-India Economic and Trade Relations (1989-2023)

Abstract

Background: This article investigates the economic and trade relationship between India and Somalia from 1989 to 2023, focusing on primary economic indicators, bilateral trade flows, and the underlying dynamics. The study aims to uncover key trends, identify challenges, and highlight the potential of this partnership, especially given India’s growing influence as a strategic trade partner. Methodology: A descriptive and analytical research approach was adopted, relying on secondary data obtained from credible international databases, including the World Bank’s World Development Indicators (WDI), World Integrated Trade Solution (WITS), and the International Trade Centre (Trade Map). Key indicators analyzed include GDP, trade volume, import-export statistics, and product classifications, covering the period from 1989 to 2023. Objective: The research aims to explore Somalia's GDP growth, trade volume, and bilateral trade with India, emphasizing the country's reliance on basic commodities for imports and India's growing demand for raw materials. Special attention is given to Somalia’s limited export portfolio and the implications of a persistent trade imbalance. Findings: The study finds that bilateral trade between Somalia and India has increased substantially, reaching a total of $808.54 million in 2023. India emerged as Somalia’s third-largest import partner, accounting for $779.47 million in imports. In contrast, Somalia’s exports to India remain modest at $29.07 million, consisting largely of raw materials such as scrap copper, iron, aluminium, insect resins, oil seeds, and agricultural products. This imbalance reflects Somalia's dependency on imports and its underdeveloped export sector. Recommendations: To improve trade relations and reduce the deficit, Somalia should prioritize diversifying its export base by investing in manufacturing, agriculture, and fisheries. Enhancing domestic value addition, upgrading trade infrastructure, and establishing export promotion agencies would strengthen trade competitiveness and lead to long-term economic benefits.