All Indian nationals who come to Malawi for employment purpose on Work Permit/TEP/Project visa are requested to kindly register their full details with the High Commission, initially through the website link: http://www.hcililongwe.in/register.php
Economical and Commercial
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High Commission of India

Lilongwe

*****

Commercial Brief

          India-Malawi trade relations are historic and dates back to 18th century coinciding the arrival of Indian tradesmen mainly from the Indian State of Gujarat to the African sub-continent.  It is estimated that there are roughly 8000 persons of Indian origin engaged in various businesses ranging from Agriculture & Agro business to Pharmaceutical business, making positive impact of Malawi’s economy.

          The 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. The two dignitaries were accompanied by leading Industrialists & business persons of their respective countries.

          Malawi is a beneficiary of Government of India’s Line of Credit (LOC) Scheme, and since 2008 a total of US$ 156.56 million has been provided to Malawi to cover areas such as irrigation, pigeon peas processing, cotton processing, fuel storage and sugar processing.  The agreement for utilization of the US$ 23.5 million  Line of Credit to Malawi Government for water supply project for city of Blantyre has been signed between EXIM Bank and GoM on 5 August 2016.

          Malawi is also a beneficiary under Government of India’s Duty Free Tariff Preference for Least Developed Countries (DFTPI – LDC) Scheme introduced in April 2008. Under this Scheme, Malawi is eligible to export to India 94 tariff lines duty free. It is for the Malawians to make use of the facility offered to them. If the Government of Malawi needs any further assistance to diversify its export base into other sectors, it must come up with a concrete proposal for GOI to consider it.

          India-Malawi bilateral trade since 2008-15 (Amount in Million US $)

Year

Indian exports to Malawi

% Change

Malawian

Export to India

% change

Total trade

2008-09

   89.38

38.92

     7.08

    -54.73

  96.46

2009-10

   81.36

-8.97

103.76

 1364.62

185.12

2010-11

   98.03

28.49

   19.89

    -80.83

117.92

2011-12

 148.26

46.51

  19.97

        0.41

168.23

2012-13

 153.30

   3.4

  43.11

   112.67

196.41

2013-14

 221.05

  44.17

  15.15

    -64.85

236.15

2014-15

 214.02

   -3.18

  36.78

   142.71

250.80

2015-16

 

176.13

  -17.70

  64.31

   74.84

240.44

(Source: www.commerce.nic.in)

          Major Exports  From Malawi To India

          The Malawi exports to India are very limited and primarily agricultural products. Major export commodities from Malawi to India are: Pulses, Chickpeas and other agricultural commodities. Among other items Malawi exports edible vegetables and certain roots and tubers, coffee, tea and spices, tobacco and manufactured tobacco substitutes. There is a significant contribution by Persons of Indian Origin, and Indian nationals who are engaged in tea, coffee, rubber and other agricultural plantations in Malawi.

          Major Imports  From India By Malawi

          The Malawi major import commodities from India are: Pharmaceutical products, machinery, boilers, vehicles other than railway, iron and steel, fertilizers with significant share in the country’s imports of these items. Other items with export potential to Malawi, based on import demand, would include electrical, electronic equipment, printed books, newspapers, pictures, plastics and articles thereof, other made textiles, sets,  optical apparatus, rubber, furniture, electronic lightings,  tanning, dyeing extracts, pigments, paper and paperboard, articles of pulp and board, toys, ceramic products, organic and miscellaneous chemical products, essential oils and cosmetics.

Top Ten Imports from India to  Malawi (2015-16)

Rank

HS Code

Description

Value in US$ Thousand

1

3004

Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses

64,216

2

7210

Flat-rolled products of iron or non-alloy steel, of a width >= 600 mm, hot-rolled or cold-rolled

11,846

3

3006

Pharmaceutical preparations and products of subheadings 3006.10.10 to 3006.60.90

9,303

4

8714

Parts and accessories for motorcycles and bicycles for carriages for disabled persons

7,361

5

3926

Articles of plastics and articles of other materials of heading 3901 to 3914, n.e.s

6,165

6

6309

Worn clothing and clothing accessories, blankets and travelling rugs, household linen

4,926

7

4901

Printed books, brochures and similar printed matter, whether or not in single sheet

4,433


8

3105

Mineral or chemical fertilizers containing two or three of the fertilising elements nitrogen phosphorous

4,337

9

8712

Bicycles and other cycles, incl. delivery tricycles, not motorised

3,520

10

8438

Machinery for industrial preparation

2,667

Source : International Trade Center (ITC)

          Following are the  high export potential commodities:

Pharmaceutical products: This is the largest category imported by Malawi from India, accounting for 43   percent of Malawi’s total import from India in 2015. These amounted to US$104.4 million in 2015. However, the trade figures of these items in 2015 are comparatively lower than 2014’s import figure of US$120.1 million. There is therefore scope to further enhance these exports to the country in the light of an increasing import trend in the years preceding 2015.

Machinery: Malawi’s imports of machinery amounted to US$30.18 million in 2015 from US$53.5 million, with a share of 13 percent of total imports in 2015. This category constitutes the second largest items imported from India in 2015.  Some of these import items included machinery for the industrial and manufacturing industry, agricultural and engineering machinery.   

Vehicles other than railway: These are one of the largest items in Malawi’s import basket. With Malawi’s imports of these items from India amounting to US$14.5 million in 2015. The scope for enhancing India’s exports can be gauged from the fact that imports from India accounts for a marginal share of 6 percent  of Malawi’s total imports from India. Notable products under this category of imports from India by Malawi are parts and accessories for motorcycles and bicycles and carriages for disabled persons, bicycles and other cycles including tricycles, motor vehicles and tractors and their parts and accessories i.e. Tata, Mahindra, Ashok Leyland and TVS.

Iron and steel:  With Malawi’s imports of these items from India amounting to US$13.88 million in 2015, although with a registered decline of about US$10 million. This category constitutes one of the fourth largest items imported from India in 2015. Flat rolled products of iron or non-alloy steel, of a width>=600mm, hot-rolled or cold rolled contributed a significant amount of US$13.2 million in 2015 representing 96% of the total import value in the Iron and Steel category.

Fertilizers:  Malawi’s total imports of these items from India amounted to   US$10.4   million in 2015, rising from US$7.2 million  in the previous year. While imports from India stood at US$10.4   million in 2015, with    a share of  4.3 percent from previous year’s 2   percent in Malawi’s total imports from India. The main import items were mineral or chemical fertilizers containing two or three of the fertilizing elements nitrogen, phosphorous and potassium. Scope exists to further enhance exports from India as Malawi economy is largely agro based.

Electrical and Electronic equipment:  Malawi’s imports of these items amounted to US$  8.08   million in 2015 which is a marginal share of Malawi’s total imports from India. Electrical transformers, static converters, e.g. rectifiers and inductors; parts thereof comprised a major proportion, accounting for about 46 percent of the total import value. Other electrical and electronic equipment imported by Malawi included insulated wire/cables, electric motors and generators, Electrical apparatus for switching or protecting electrical circuits, or for making connections and Telephone sets i.e. telephones for cellular networks or for other wireless networks. Scope for enhancing exports under this category can be assessed from the last three years trade figure between Malawi and India.

Printed books and newspaper:  Malawi’s imports of these items from India amounting to US $8 million in 2015 represent a decline by about US$9 million. This category of imports consisted of printed books, brochures, leaflets, printed pictures and photographs, calendars, children’s pictures, drawing or colouring books, maps and hydrographic charts, plans and drawings of architectural, engineering, industrial, commercial, topographical or similar purposes.

Plastics and articles: Malawi’s imports of these items from India amounted to US$5.45 million in 2015. Import of plastics and articles thereof has declined to 2 percent from around 3 percent of Malawi’s total imports from India in the previous year. Some of the plastic products imported by Malawi in 2015 were plates, film, foil and strip, polymers of ethylene in primary forms, articles for the conveyance or packaging of goods, tubes, pipes and hoses, and fittings, tableware, kitchenware, other household articles and toilet articles.

Other textile articles, worn cloth:  Under this category, Malawi’s total imports from India stood at US$4.6 million in 2015 which is a marginal increase compared to previous year’s imports value of US$4.3 million.  Worn clothing and clothing accessories, blankets and travelling rugs, household linen and articles made up 85 percent of the total import value under this category. Other items imported were sacks and bags for packaging of goods, bed linen, table linen, kitchen linen, curtains and interior blinds.

Optical, photo, medical etc. apparatus:  Malawi’s imports from India under this category amounted to US$4 million in 2015, with a share of  1.6  percent  of total imports from India.  India’s exports of these items to Malawi substantially increased between 2013 and 2014 from US$1.8 million to US$5.16 million. Malawi mostly imported apparatus used in medical, surgical, dental and veterinary sciences including needles, catheters, and ultrasonic scanning machines. Other items imported included optical microscopes, breathing appliances and gas masks.  Scope exists to further enhance such exports.

Balance of Trade

The balance of trade is in favour of India. Malawi’s total export to India as sourced from www.commerce.nic.in stood at US$64.31 million compared to India’s exports to Malawi at US$176.13 million in 2015. Malawi has seen a significant increase from previous year’s US$36.78 million, while Imports from India to Malawi slowed down from US$214.02 during the same period.

*All the trade figures on each indicated product are based on National Statistical Office(NSO) of Malawi.* 

      Indian Investments

          There are about 8000 persons of Indian origin and 2500 Indian nationals currently residing in Malawi. The Indian community is primarily engaged in trade. There are about 100 Malawian Indian companies registered in Malawi since its inception in 1993 with the Malawi Investment & Trade Centre.  As per MITC, out of 56 companies registered to invest in Malawi, 10 were of Indian origin representing a pledged total of US$ 73 million of total of US$ 932 million.  This represents about 10% of the total investment inflows in Malawi in 2017. However, these are all pledged and no actual investments have yet taken place.

            Most Indian businesses are engaged in Agro processing, Chemicals, Energy, Financial service & Insurance, Food processing, Information Technology & Software development, Logistics, Transport, Textile, Cosmetics & Pharmaceuticals, Fertilizers, Cement, Packaging, Plastics, Mining, Manufacturing, Hotel & hospitality etc. The commercial and manufacturing activity is mainly concentrated in Blantyre in the southern region. There is a significant number of Persons of Indian Origin, and Indian nationals who are engaged in tea, coffee, rubber, and other agro-based industries in Malawi.

            On the investment side, private investment of Indian origin is primarily concentrated in the community, social and personal services sector. Indian Companies Tata, TVS, Ashok Leyland, Bharti Airtel, Bajaj Auto, Mahindra, Mahindra Tech, Eicher are prominent. Kirloskar and Godrej products have also entered Malawi markets in April 2013. SAI Consulting Engineers Pvt Limited of India and Malawi Roads Authority signed a contract agreement on 16 February 2016 for Consultancy Services for Feasibility Study, Preparation of Detailed Design, Preparation of Tender Documents and Construction Supervision of One Stop Border Post Infrastructure (OSBP) at Dedza, Mwanza and Muloza.

During the Malawi Investment Forum held in October 2016, an Indian company from Surat Farm signed a US$ 1 million investment MoU with a Malawian company to set up an Organic Bio fertilizer plant in Lilongwe. Another Indian company M/s SATEC Envir Engineering Pvt Limited signed a MoU with Malawi Government to construct 4 Office Buildings at Capital Hill in Lilongwe. M/s Innosoft Solutions signed an MoU with Ministry of Information, Communications and Technology for provision of e-government solutions to the Government of Malawi.

          Minimum capital requirement for setting up business

According to the government of Malawi Business Licensing Act of 2012, foreigners are allowed to operate only in the main cities and have to apply for permits with a deposit of US$ 250,000 as initial capital.

          Interest rates

Central bank in Malawi, the Reserve Bank of Malawi (RBM) has changed its benchmark lending rate from 27 percent to 24 in November 2016, aiming to achieve price stability in the medium term. In commercial banks, lending rates are around 40 percent (Base rate of around 35 percent plus mark-up).  The commercial banks are also expected to follow suit and lower their lending rates likewise.

Inflation rate

Inflation rate in Malawi came down to 16.1 percent in February 2017, compared to 18.2 percent in January 2017, The annual average Inflation for Malawi in 2015 was 21.85 percent which came down to 19.78 in 2016. The inflation rate came down from 23.5 in July 2016 to 16.1 percent in February 2017. Inflation Rate in Malawi is reported by the National Statistical Office of Malawi.

Depreciation of the Local Currency against the US Dollar

The local currency, Malawi Kwacha (MK), in the year 2016 traded at an annual mid-rate average of MK713.8471 from the previous year’s rate of MK499.6067 to a US Dollar, representing a depreciation of about 42.88 percent. At the beginning of the year 2016, the Malawi Kwacha traded at a mid-rate of MK698.5375 and rose to at a monthly average rate of MK725.7111 to a US Dollar in March 2017. Malawi uses a flexible exchange rate regime that allows the Kwacha to automatically adjust to domestic and International currency developments.

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.

Major trading partners with Malawi

Top 10 list in 2015:

 

IMPORTS

 

EXPORTS

 

RANK

PARTNER

VALUE

PARTNER

VALUE IN US$

1

SOUTH AFRICA

        408,161,884

BELGIUM

     103,754,814

2

CHINA

        298,026,117

ZIMBABWE

       98,167,192

3

UNITED ARAB EMIRATES

        247,686,398

MOZAMBIQUE

       97,761,709

4

INDIA

        233,828,372

SOUTH AFRICA

       73,773,199

5

ZAMBIA

        112,227,321

UNITED KINGDOM

       61,411,832

6

UNITED KINGDOM

          76,795,821

EGYPT

       56,272,996

7

MOZAMBIQUE

          71,216,191

INDIA

       48,023,298

8

JAPAN

          69,963,746

GERMANY

       47,912,694

9

SWITZERLAND

          68,367,935

UNITED STATES OF AMERICA

       42,492,173

10

UNITED STATES OF AMERICA

          51,251,932

RUSSIAN FEDERATION

       37,382,333


Top 10 product import by Malawi in 2015

RANK

HS

DESCRIPTION

VALUE IN US$

1

2710

PETROLEUM OILS AND OILS OBTAINED FROM BITUMINOUS MINERALS OTHER THAN CRUDES PREP NES

   229,365,629.55

2

3102

MINERAL OR CHEMICAL FERTILISERS

   215,016,518.78

3

3004

MEDICAMENTS (EXCLUDING GOODS OF HEADING NO.30.02,30.05 OR 30.06)CONSISTING

   145,849,297.68

4

1001

WHEAT AND MESLINE

     93,103,619.16

5

8703

MOTOR CARS AND OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED FOR THE TRANSPORT OF PERSONS

     55,775,946.30

6

2401

UNMANUFACTURED TOBACCO; TOBACCO REFUSE .

     50,275,467.35

7

4907

UNUSED POSTAGE,REVENUE OR SIMILAR STAMPS OF CURRENT OR NEW ISSUE IN THE COUNTRY IN WHICH

     50,187,068.13

8

2523

PORTLAND CEMENT,ALUMINOUS CEMENT,SLAG CEMENT,SUPERSULPHATE CEMENT

     42,956,599.79

9

3401

SOAP; ORGANIC SURFACE-ACTIVE PRODUCTSS AND PREPARATIONS FOR USE AS SOAP

     41,591,756.40

10

6309

WORN CLOTHING AND OTHER WORN ARTICLES.

     41,230,391.47


Top 10 product export by Malawi in 2015

RANK

HS

DESCRIPTION

VALUE IN US$

1

2401

UNMANUFACTURED TOBACCO; TOBACCO REFUSE .

         439,043,359

2

1701

CANE OR BEET SUGAR AND CHEMICALLY PURE  SUCROSE, IN SOLID FORM.

           93,940,911

3

0902

TEA,WHETHER OR NOT FLAVOURED.

           65,197,107

4

0713

DRIED LEGUMINOUS VEGETABLES ,SHELLED,WHEHER OR NOT SKINNED OR SPLIT.

           53,953,948

5

0407

BIRDS' EGGS,IN SHELL,FRESH,PRESERVED OR  COOKED

           34,276,978

6

5201

COTTON,NOT CARDED OR COMBED.

           20,459,360

7

0802

NUTS, FRESH OR DRIED,WHETHER OR NOT SHELLED OR PEELED.

           19,789,753

8

2306

OIL-CAKE AND OTHER SOLID RESIDUES,WHETHER OR NOT GROUND OR IN THE FORM OF

           16,479,587

9

3924

TABLEWARE,KITCHENWARE,OTHER HOUSEHOLD ARTICLES AND TOILET ARTICLES,OF PL

           11,913,854

10

1202

GROUND-NUTS,NOT ROASTED OR OTHERWISE  COOKED,WHETHER OR NOT SHELLED OR BROKEN

           10,577,842

*****

30 March 2017




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