Kenya is the regional trading and financial center of East Africa. The market economy is characterized by an open foreign trade system and a strong dependence on the agricultural sector.
Kenyan economy back on course for growth
In the 1990s, the Kenyan economy experienced a sharp decline in its growth rate to a meager 1.5%.* Rapid population growth and poor infrastructure were largely responsible for the collapse in the country’s GDP.
However, in recent years this African country has regained momentum thanks to the development programs implemented by the Kenyan government. The country has now become an attractive trade and investment destination for several Indian SMEs looking to expand their presence on the African continent.
Kenya is an ideal gateway to the undeveloped East African Community (EAC) countries which represent huge growth potential for the Indian SME sector. With intergovernmental tariffs set to drop to 0% in the EAC region in the near future, Indian SMEs are looking for new business opportunities in Kenya.
Trends in bilateral trade
India is the eighth largest export country after Kenya. Its export basket to Kenya consists of rice, metals, textiles, iron and steel, chemicals, technical goods and transport equipment. On the other hand, Kenya is a major exporter of leather, rawhide, inorganic chemicals and dyes to India.
Trade relations between India and Kenya have strengthened in the recent past thanks to increased economic exchanges between SMEs in the two countries. A growing number of Indian SMEs have entered the Kenyan market, while several Kenyan SMEs are also interested in establishing business relationships with their Indian counterparts. As a result, Indian SMEs from various industries are exploring trade and investment opportunities in Kenya.
For Indian SMEs looking to enter the Kenyan market, there are investment opportunities in sectors such as construction, tourism, chemical manufacturing, food processing and textiles. In the tourism sector, Indian SMEs can benefit from the increasing demand for cruise tourism and conference tourism in Kenya. Similarly, Indian IT companies can enter the Kenyan market by providing IT technical support and training to Kenyan SMEs.
Recently, National Small Industries Corp (NSIC) signed an agreement with Kenya Industrial Estates (KIE) to facilitate greater collaboration in the SME segment. Under the agreement, India will expand technical support to Kenyan SMEs while KIE will commercialize NSIC products in the country. The signing of this agreement is expected to give a big boost to SMEs in the two countries.
Thanks to David K Parks | #Indian #SMEs #explore #Kenya