BUSINESS

Kenya and India strengthen economic ties with focus on manufacturing and investment

The Government of India has reiterated its commitment to support Kenya’s manufacturing and investment sectors, signaling a promising future for bilateral cooperation. Salim Mvurya, Cabinet Secretary for Investment, Trade, and Industry, highlighted the potential of upcoming talks aimed at advancing the Kenya Kwanza agenda, which prioritizes industrialization and economic growth.

Kenya is currently in advanced negotiations to secure a 32.4 billion shillings loan from India. This funding is intended to enhance value addition initiatives at County Aggregation and Industrial Parks, a critical component for boosting the nation’s agricultural output. Of the total loan, 13 billion shillings will specifically target the strengthening of these parks, which play a vital role in transforming raw agricultural products into higher-value items.

In the past year, trade between the two nations has shown significant activity, with Kenya exporting goods worth 10.5 billion shillings to India while importing goods valued at 269 billion shillings. This substantial trade deficit in favor of India has prompted both countries to seek strategies to balance their trade relationships. The focus will be on increasing value addition in Kenya to promote local production for export.

As part of this initiative, India is also set to provide 2 billion shillings in grants to support Kenyan SMEs, aimed at scaling operations to enhance their export capacity to India. Additionally, Indian pharmaceutical companies have announced plans to establish subsidiaries in Kenya, viewing the nation as a strategic gateway into the broader African market.

High Commissioner of India to Kenya, Namgya Khampa, expressed optimism about the collaboration, stating, “We are looking at how we can step up our efforts through the joint trade committee, focusing on enhancing trade and investment, particularly in the agriculture and health sectors.”

In a bid to further facilitate trade, incentives will be offered to Kenyan importers of machinery from India, further encouraging economic ties between the two nations. The Kenya-India Joint Trade Committee is expected to finalize discussions on these initiatives within the next two months, marking a significant step forward in bilateral relations.

As both countries work toward a more balanced trade partnership, the prospects for increased investment and manufacturing capacity in Kenya appear promising, aligning with the nation’s broader economic objectives

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