Ghana stands to benefit from a new wave of Indian investment as exporters in labour-intensive industries look to Africa to cushion the impact of steep US tariffs.
Indian businesses, including textile giant Gokaldas Exports Ltd. and garment maker Raymond Lifestyle Ltd., are expanding production in Africa to take advantage of lower tariffs. While exports from India to the US now face levies as high as 50%, goods shipped from African countries attract tariffs of just 10% under trade agreements.
With the US market accounting for over $20 billion of India’s textile, jewelry, and diamond exports in 2023, the new tariff regime threatens to halve the country’s shipments. To sustain access to American buyers, Indian firms are increasingly scouting Africa for manufacturing bases.
Gokaldas Exports already operates factories in Kenya and Ethiopia and is considering further expansion, while Raymond Lifestyle has begun shifting US-bound orders to its Ethiopian plant. Jewelry exporters are also exploring Botswana as a new production hub.
Analysts say Ghana, with its political stability, growing industrial base, and access to the US through the African Growth and Opportunity Act (AGOA), is well-positioned to attract some of these investments. They argue that Ghana offers a unique competitive edge with its trade incentives, improving infrastructure, and geographic access to both US and West African markets.
India’s Prime Minister Narendra Modi’s July visit bolstered Ghana’s prospects, as he and President John Mahama explored deeper cooperation in trade, investment, agriculture, technology, education, healthcare, and energy. However, the country needs to better position itself to compete favourable for these investments that other countries on the continent, would also seek to attract.
African countries are sweetening the deal by offering tax holidays, customs duty waivers, and special economic zones. For India’s exporters, these incentives, coupled with tariff advantages, present an attractive alternative to production at home.
Still, the shift will take time. Companies must renegotiate contracts with US buyers, while concerns about political risks in parts of Africa remain. But for Ghana, the emerging trend underscores an opportunity to position itself as a reliable gateway for Indian investment into Africa, and a launchpad to the US market.
