Kenya pushing for PTA deal with India to boost exports

Kenya and India do not have a Preferential Trade Agreement (PTA). So, for Kenya to have duty access to India and vice versa, a Preferential Trade Agreement would be required. Such an agreement would lower or remove duties and enhance access of goods and services between the two countries or regions.

The Kenyan government and the private sector are pushing for a PTA with India, Kenya says will help bridge the huge trade imbalance that is in favour of India, her second-largest source of imports and it will also allow Kenya for the entry of locally made goods, and especially privileged ones, to the Indian market.

This is in the wake of renewed trade ties with the world’s seventh-largest economy following Prime Minister Narendra Modi’s three-day state visit to Kenya that started on July 10.

According to Economic Survey 2016 data , the value of imports from India stood at Sh252.5 billion last year, a slight 2.3 percent drop from Sh264.5 billion a year earlier, This was against Sh8.9 billion in exports, although this was a marginal rise from Sh8.7 billion in 2014.

KAM chief executive Phyllis Wakiaga said that such a deal will increase Kenyan exports to India.

The manufacturers aim to increase leather and textile exports to India if the proposed PTA is agreed on.

During Modi’s visit, the Kenya National Chamber of Commerce and Industry chairman Kiprono Kittony, who was re-elected for a second three-year term on Thursday, said that both countries stand to benefit from a preferential trade deal.

Kittony said that the business community is asking for a one-way market access to India. That will be the best way to level out the balance of trade that today is largely in favour of India.

Industry, Trade and Cooperatives Cabinet secretary Adan Mohamed said that their business community would like to explore a situation where they can get an African Growth and Opportunity Act type of preferential market access to Indian market given the size of their market here. Kenya can also import fabric from India to promote its textile industry which will be a win-win situation.