Despite the Narendra Modi-led NDA government asking Indian companies to focus on manufacturing within the country under the ‘Make in India’ program, many are investing in Ethiopia and Africa to set up units there. Reason: Ethiopian government is offering attractive incentives to woo foreign investors, such as land on decades-long lease, cheap power and duty-free exports to key markets like the US and Europe.

For example, leading fabric and clothing company Raymond has plans to pump in $100 million over the next two-three years for a garmenting unit in Awasa, a lake-side city, which will be one of its largest facilities. According to the company, labour costs in Ethiopia are 50 per cent less against India and power tariffs are almost one-third.

Textile and apparel conglomerate, Arvind, aims to build a six-million-pieces garment plant in Ethiopia because of the long-term lease for factories that the Ethiopian government offers and single-window clearance for industrial projects. Even Kanoria Textiles is setting up a project in the country, again because of the low-costs of labour and power.

With global brands shifting their attention to African countries for their sourcing requirements, and Africa being a major cotton producer is one of the few places in the world, garment makers can establish the entire supply chain from fiber to factory in one location.