Trade, investment, and strategic cooperation in one of India’s fastest-growing African partnerships.
Tanzania, a prominent East African nation known for its diverse landscape and strategic maritime position, is India’s second largest trading partner in the continent of Africa. The plains of Tanzania spread out over East Africa and are populated by a diverse range of wildlife, including elephants, lions, leopards, buffaloes and rhinos. The nation is home to the dormant volcano of Mount Kilimanjaro, the highest peak in Africa, and the archipelago of Zanzibar, decorated with sparkling coasts and vibrant coral reefs. Named after the union of Tanganyika and Zanzibar, the country serves as a vital gateway for Indian goods into the East African Community (EAC). As India’s total trade with Africa reaches new heights, the partnership with Tanzania has witnessed unprecedented growth, driven by energy demands, pharmaceutical cooperation, and critical raw materials.
Fig 1: India’s Bilateral Trade with Tanzania during 2015/16 – 2025/26 (USD Million)
Table 1: India’s Bilateral Trade with Tanzania during 2015/16 – 2025/26 (USD Million)
Exponential Growth in Bilateral Trade
The economic relationship between India and Tanzania has transitioned into a new era of high-volume engagement, marked by an increase in bilateral trade flows. By the 2025-26 fiscal year, total bilateral trade reached USD 9,022.71 million, securing Tanzania’s position as one of India’s top trading partners on the continent. This represents a significant increase of 4.4% year-on-year and a 280% increase over the past five years. Indian exports alone rose from approximately USD 1.44 billion in 2020-21 to USD 5.42 billion by 2025-26.
Fig 2: India’s Exports to Tanzania in 2025-26
The primary catalyst for this export spike has been India’s supply of petroleum products, which accounted for roughly 55.8% of all Indian exports to Tanzania in 2025-26, as displayed in Fig.2. This surge is directly linked to Tanzania’s expanding economy, which has increased fuel requirements for construction, manufacturing, and transport, as well as post-COVID recovery since 2020-21. On the import side, India relies on Tanzania for industrial raw materials like copper and agricultural products such as pulses and cashews, ensuring a complementary trade structure that supports India’s food security and manufacturing supply chains.
Fig 3: India’s Imports from Tanzania in 2025-26
The economic partnership is further maturing as Indian exports diversify beyond petroleum products into higher value-added sectors. There is a notable uptick in the supply of industrial machinery and automotive parts, reflecting India’s role in supporting Tanzania’s internal industrialisation. This shift indicates a transition from a purely resource-driven trade relationship to one defined by technological exchange and manufacturing support.
Tanzania as a Pharmaceutical Hub and Logistics Gateway
A cornerstone of the strategic partnership is Tanzania’s designation as a potential regional pharmaceutical manufacturing hub for East, Central, and Southern Africa. This initiative, agreed upon during Tanzanian President Samia Suluhu Hassan’s visit to India in October 2023, leverages Indian pharmaceutical expertise to enhance local production and healthcare accessibility within the region. By establishing Tanzania as a production base, Indian firms can effectively serve a much larger integrated African market. Collaboration in pharmaceuticals and capacity building in areas of healthcare and AYUSH have been identified as focus areas for the partnership, going forward.
Parallel to healthcare, Tanzania’s geography as a maritime nation allows it to serve as a critical logistics gateway to landlocked neighbours in the EAC. For Indian firms, this means Tanzania is not merely a standalone market but a vital base for export-oriented production and distribution across the continent, utilising regional value chains enhanced by the African Continental Free Trade Area (AfCFTA).
Harnessing the Blue Economy
With over 1,424 kilometres of Indian Ocean coastline, Tanzania possesses immense untapped potential through the “Blue Economy.” In 2025, Tanzania’s blue economy contributed around USD 9.6-10.5 billion annually, which made up approximately 11–12% of the country’s GDP. It supports between 4.5 and 6 million jobs directly and indirectly. Indian firms can capitalise on this growth by building cold-chain infrastructure, value-added seaweed processing plants, and deep-sea fishing fleets. Furthermore, India’s maritime and technology sectors are perfectly positioned to participate in port modernisation and smart digital stacks, establish much-needed ship repair yards, fill critical data gaps by building regional vessel monitoring ecosystems, and pioneer early-stage project licensing in emerging fields like offshore wind clusters and blue carbon markets.
Renewable Energy Frontier
Tanzania’s energy mix relies primarily on natural gas and hydropower, but the country aims to reach a 50% renewable energy generation share by 2030. Solar, wind, and off-grid mini-grids are expanding to bring power to remote, rural areas. Tanzania’s geographical profile provides significant solar and wind energy potential, representing a new frontier for bilateral cooperation. Drawing on India’s expertise in achieving large-scale renewable targets, there is a viable pathway for technology transfer and investment in decentralised solar grids and wind farms. Tanzania’s energy transition offers lucrative opportunities for Indian firms specialising in clean-tech infrastructure.
Digital Infrastructure and Fintech
In October 2023, India and Tanzania signed an MoU in the field of Digital Solutions in order to foster deeper cooperation and exchange in technology-based solutions and the implementation of digital transformation initiatives. Tanzania’s commitment to nationwide digital development is demonstrated by the Tanzania Digital Economy Strategic Framework 2024–2034, which puts forth a comprehensive strategy to modernise and integrate digital technologies into different sectors in order to foster an inclusive, resilient, and sustainable digital economy. This offers important opportunities for collaboration to Indian firms specialising in digital infrastructure and information technology. IIT Madras Zanzibar, inaugurated in 2023, is positioned as a regional hub that can deepen collaborations in fintech for real-time payments and digital public infrastructure (DPI). This digital growth not only improves the ease of doing business but also fosters a startup ecosystem that can integrate with global value chains.
Investing in Tanzania: LoCs and Private Contributions
India’s commitment to Tanzania extends into long-term infrastructure and capacity building through development finance. Tanzania has received over USD 1.1 billion in LoC for various water projects, with other LoCs being extended to Tanzania to support the defence industry and the agriculture industry. Private sector contributions remain robust, with Indian companies including Mahindra & Mahindra, Kalpataru and Larsen & Toubro investing in sectors such as automotives, energy and infrastructure, further cementing India’s economic presence in the region.
As both countries seek to diversify supply chains and strengthen cooperation, several strategic priorities can further deepen bilateral engagement.
Looking Ahead
- Position Tanzania as India’s regional export and logistics hub. Indian companies should leverage Tanzania’s ports and transport corridors to develop integrated supply chains serving neighbouring landlocked markets such as Rwanda, Uganda, Burundi, Zambia, and the Democratic Republic of the Congo.
- Accelerate collaboration in renewable energy and critical infrastructure. India’s expertise in affordable solar power, rural electrification, and smart grid technologies can support Tanzania’s renewable energy ambitions while creating opportunities for Indian engineering and clean-tech firms.
- Deepen digital and fintech cooperation. Building on existing agreements on digital solutions, both countries can expand collaboration in Digital Public Infrastructure (DPI), digital payments, cybersecurity, e-governance, and startup incubation.
- Strengthen cooperation in the Blue Economy. Indian public and private sector enterprises should explore partnerships in sustainable fisheries, port modernisation, maritime logistics, ship repair, coastal tourism infrastructure, and marine biotechnology.