Press Information Bureau

Government of India

Ministry of Commerce & Industry

20-March-2012 19:27 IST

Anand Sharma Invites Kenya to Invest in Textiles Sector

Government Raises Issue of Higher Import Tariff on the Man- Made Fibre with Kenya

Shri Anand Sharma, Union Minister for Commerce, Industry & Textiles met with the Trade Minister of Kenya Mr. Chirauli Mwakwere, here today. Shri Sharma during the meeting asked Kenya side about the investment opportunities in India and that equity participation up to 100% through automatic route is permitted in the textile sector. Minister also raised issues of higher import tariff with Kenya’s dignitary. It is to be noted that, Kenya imposes high import tariffs (MFN Duty) on the imports of Man-made fibre textile items from India viz. Yarn and Fabrics up to 25%, and Made ups up to 50%. In addition to tariff, Kenya also imposes 16% Value Added Tax (VAT) on imports.

During the meeting Minister Sharma asked for the greater cooperation among the trade bodies and business chambers from both the countries will facilitate growth in textile trade. “Major departmental stores, an importer and retail chain based in Kenya is welcome to participate in the next edition of fairs / exhibitions to be organized in India,” Minister said.

On the backdrop of 6th India-Kenya Joint Trade Committee (JTC) meeting, Ministry of Textiles has forwarded the details of the Integrated Skill Development Scheme to Department of Commerce with request to share the same with Kenya. A copy of the same was handed over to the visiting dignitary.

Shri Sharma later informed that, in the calendar year 2010, Indian Textiles & Clothing (T&C) exports to Kenya were US$ 100 million against US$ 77 million during 2009. Manmade Staple Fibre (MMSF), Manmade Filaments (MMF), Apparel articles and textile article nesoi / clothing are the major textiles export items to Kenya. As per latest available statistics, during the first seven months of calendar year 2011, there has been a decline in the exports of T&C items to Kenya by 13.81% moving to USD 50 million as against USD 58 million in the corresponding period of 2010. Imports from Kenya during the calendar year 2010 were USD 3.4 million and the majority of it was on account of the Wool and Veg Text Fib nesoi / paper yarns.

Shri Sharma mention that, “ Kenya is an attractive gateway to the emerging markets of the East African Community as well as to some of your other neighbours and to parts of Central Africa. Indian businesses have been investing in Kenya, in several sectors such as telecommunications, petrochemicals and power.” As per Department of Economic Affairs, Indian companies have invested US$ 136.34 million in Kenya during April 2005 to Feb. 2011. Comparatively, FDI inflows from Kenya to India was US$ 18.8 million during April 2000 to December 2011 .

Minister expressed happiness over the fact that last November 2010, Exim Bank of India signed an agreement with the Government of Kenya for a $61.6 million concessional Line of Credit extended by Government of India for power transmission lines and substations.

India is presently implementing the Pan-African e-Network project in Kenya. This will link universities and Hospitals in Kenya and India through tele-education and tele-medicine services. VVIP connectivity is also envisaged. The project is running successfully in countries across Africa. An India-Kenya Double Taxation Avoidance Agreement (DTAA) was signed in 1989. Negotiations for concluding a Bilateral Investment Promotion Agreement (BIPA) and to review the DTAA have been under consideration of the two governments for some time.

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DS/gk

Investment liberalisation: India invites Kenyan textile investment while urging review of tariffs and VAT on man-made fibre imports. India invited Kenyan investment in textiles by noting equity participation up to 100% through automatic route and encouraged trade body cooperation and exhibitor participation, while formally raising concerns about Kenya's high import tariffs on man made fibre textile items and a 16% Value Added Tax on imports; bilateral frameworks such as an existing Double Taxation Avoidance Agreement and negotiations on a Bilateral Investment Promotion Agreement were also referenced.