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Kenya and India move to build stronger business partnership

Kenya wants India help to convert the Export Processing Zones (EPZs) into Special Economic Zones (SEZs). Photo/FILE
Workers at an Export Processing Zone. While under Export Processing Zones Act (EPZ Act) the activities of EPZ enterprises are limited to manufacturing, commercial and service activities, the SEZ Act provides a long non-exhaustive list of activities. Photo/FILE 

Kenya and India seek to double their trade in the next two years, with eyes on infrastructure projects as anchors of renewed exchanges.

“We have agreed to increase the value of our bilateral trade to Sh200 billion by the end of 2013,” says an agreement the two governments signed after two days of negotiations last week. 

Kenya wants India help to convert the Export Processing Zones (EPZs) into Special Economic Zones (SEZs).

Nairobi also wants support in developing the textile industry.

India has set its sights on power generation from renewable sources, transformer manufacturing, and building rapid rail systems in the major Kenyan towns.

India’s state-run power equipment maker Bharat Heavy Electricals Ltd (Bhel) proposed to partner with Kenyan government-owned Numerical Machining Complex Ltd to set up a transformer manufacturing plant to serve eastern and southern Africa regions.

Bilateral trade between the two sides has grown from Sh50 billion in the year 2005-06 to Sh120 billion in 2009-10, a growth of 145 per cent in the last four years, a statement released by Kenya’s Ministry for Trade said.

India’s exports to Kenya have increased from Sh46 billion in 2005-2006 to Sh112 billion in 2009-2010.

India’s imports from Kenya also rose from Sh3.8 billion in 2005-06 to Sh6.3 billion in 2009-2010.

“There is tremendous potential for further diversifying and expanding the bilateral trade between both countries,” said a joint communiqué released by the countries.  

During the negotiations that ended on Wednesday this week, Kenya requested India for a credit line of Sh2.4 billion for industrial development in various sectors. including manufacturing and textile.

The credit line is proposed to be operationalised through the Industrial Development Bank (IDB Capital Limited) of Kenya and Exim Bank of India.  

“The Indian side assured early consideration on the request once the formal proposal is received from the Government of Kenya. Currently, a credit line of Sh4.9 billion stands approved for the power sector. The Kenyan government has been requested to finalise the draft agreement,” said the communiqué.

The two countries were holding the sixth Session of the Kenya-India Joint Trade Committee (JTC) in accordance with the provisions of the Bilateral Trade Agreement signed on February 24, 1981 in New Delhi.

India’s Minister for Commerce and Industry, Mr Anand Sharma. led the country’s delegation while Kenya was led by Trade Minister Chirau Ali Mwakwere.

Other agreements were that Rail India Technical and Economic Service (RITES) provide its services in development of cruise ship facilities at the ports of Mombasa and Lamu through waterway development, river engineering and river terminals.

Consultancy services

RITES proposed to provide technical consultancy services for development of waterway by undertaking studies for river consultancy measures, design of river terminals for cargo loading and unloading, advice on vessels and over navigation facilities. 

It also proposed to conduct studies to establish waterway connectivity to ports of Mombasa and Lamu for development of cruise and cargo transport ship facilities.

The company also proposed to participate in the development of the Nairobi Metropolitan Mass Rapid Transit Programme and Rapid Light Rail.

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