Several African countries are interested in tapping the global market, and they are putting laws in place to help the garment and textile industrial services thrive. The African Growth and Opportunity Act (AGOA) also aids the business by allowing African countries to export garments to the United States duty-free.
India’s engagement with Africa dates back to the pre-independence era, when Mahatma Gandhi lived in South Africa for over two decades and played a significant role in the country’s struggle against apartheid. Since then, India has maintained strong diplomatic relations with African nations and has been providing development assistance to several countries on the continent.
One of the key drivers of Indian investment in Africa is the availability of natural resources. Africa is rich in minerals and other resources that are crucial for India’s growing economy. Indian companies have invested heavily in sectors such as mining and oil exploration to secure access to these resources. For example, Indian companies have invested in diamond mines in countries like Botswana and Namibia, as well as oil exploration projects in countries like Nigeria and Sudan.
Government Initiatives
One of the key initiatives through which India has invested in Africa is the India-Africa Forum Summit (IAFS). The IAFS is a platform for dialogue and cooperation between India and African countries, with a focus on enhancing economic engagement. The first summit was held in 2008 in New Delhi, followed by subsequent summits in Addis Ababa (2011) and New Delhi (2015). These summits have provided opportunities for Indian businesses to explore investment prospects in Africa.
India’s investment in Africa has also been facilitated through lines of credit extended by the Indian government. These lines of credit are aimed at supporting infrastructure projects, capacity building, and other developmental initiatives in African countries. The exact amount of investment through lines of credit can vary from year to year.
Indian Textile Focus on Ethiopia’s Garment Manufacturing Hub
Kenya and Ethiopia are emerging as major African textile manufacturing hubs, closely followed by Rwanda, Uganda, and Tanzania.Based in India Raymond is one of the firms that has signed a Memorandum of Understanding with the Ethiopian government to establish a garment factory. “Countries such as Ethiopia are wooing global and Indian textile players by offering perks and benefits in exchange for shifting or partially relocating textile manufacturing capacities.”
This has the potential to move value addition and job creation overseas, with ramifications for India’s manufacturing growth and Make-in-India program. Ethiopia gets duty-free access to the United States under AGOA for ten years, until 2025, as well as duty-free access to the European Union under GSP.
KPR Mill Ltd is another Indian firm that has developed a garment facility in Ethiopia, thanks to a collaborative cooperation with ITC’s Supporting Indian Trade and Investment for Africa (SITA) initiative.
Kenya Emerges as a Developing Textile Hub
In a recent showcase of technological prowess, Kenya showcased its potential as a burgeoning textile hub during the ITME Africa & ME 2023 technology & engineering show. The event served as a platform for key interactions between government officials, local bodies, and industry patrons, fostering a vision of strategic collaboration between Kenya and India.
Kenya’s textile landscape boasts rich potential, with abundant resources and a domestic market eager for import substitutes. With a proactive and trainable workforce, Kenya stands poised for growth, supported by favorable factors such as naturally fertile cotton soil and robust connectivity infrastructure.
The existing textile industry, comprising 65 manufacturers and operational units under Export Processing Zones (EPZ), signifies a solid foundation for expansion. However, there remains ample scope for modernization, particularly through advancements in textile machinery and accessories.
India emerges as a key partner in Kenya’s textile journey, offering expertise in machinery supply, financial assistance through entities like the Exim Bank of India, and support in cotton quality assurance and research. This collaboration opens doors to diversification into niche segments like woven technical textiles, agrotextiles, and nonwovens for healthcare.
As Kenya embarks on its journey to revitalize the textile industry, management consultancy firm Suvin offers tailored strategies to set clear goals and facilitate collaborations. With a strategic partnership between Kenya and India, the textile sector aims to drive sustainable growth and profitability, positioning Kenya as a formidable player in the global market.
Looking ahead, Kenya’s strategic collaboration with India holds immense promise for revitalizing its textile industry and realizing its vision of becoming a thriving textile manufacturing hub on the African continent.
Indian Strategic Interest in The Kenyan Textile Industry
The African textile and apparel industry has risen fast in recent years and is expected to increase at a CAGR of 5% over the next five years. The business may develop even quicker if governments focus on strengthening gray areas like infrastructure, strategic supply chain, and skill management.
If the Kenyan government decides to privatize the textile plant, Indian corporations are eager to buy Rivatex East Africa Ltd.According to a TV news program, the Indian Deputy High Commissioner in Kenya, Rohit Vadhwana, several Indian textile businesses have expressed interest in purchasing Rivatex.Rivatex East Africa Limited, founded in 2007, is a vertically integrated textile plant that produces cotton-based home textiles and clothing from spinning to fabric processing.
However, the firm has faced mechanical and antiquated technology issues, which have limited its ability to capitalize on prospective prospects in local and regional markets. Despite the numerous challenges that it has experienced on its path to sustainable development and profitability, the organization has taken several strides toward complete resurrection.
Kenya-India Textile Industry Collaboration
Business ties with Indian garment machinery and technical businesses have aided the government’s efforts to revitalize the textile industry. The show will be held in the Kenyatta International Convention Centre (KICC) from November 30 to December 2, 2023. Other than India, 23 countries will take part, including Austria, Benin, China, Egypt, Ethiopia, Germany, Ghana, Italy, Jordan, Kenya, Nigeria, Rwanda, South Africa, Spain, Sri Lanka, Taiwan, Togo, Turkey, Tunisia, Uganda, the United States of America, and Zambia.
State Department of Industry Principal Secretary (PS) Juma Mukhwana stated that the textile industry is on the mend and that the government has assisted farmers in growing 40,000 acres of cotton this year, with plans to extend the acreage to 100,000 the next season.
Kenya Invites Indian Investors For Textile Technology Growth
Mukhwana stated during the pre-exhibition news conference on Tuesday, “I don’t want you just exhibiting here.” I want you to build an Indian machinery warehouse in Kenya. We want to see Indian textile technology flourish here.”
The PS added that the machinery used in production is exempt from government taxes, and hence invited investors to locate their textile plants in Kenya. “The biggest manufacturers in Kenya are those of Indian origin, and our manufacturing story is not complete without the Indian dimension,” declared the Prime Minister of Kenya.
Africa is seeing the final wave of industrialization, and the region is primed for investment due to its youthful, talented employment and raw supplies. He said that transporting raw materials from Africa to India for production and then bringing them back as completed items would be prohibitively expensive.
“If you manufacture in Kenya, you will have access to a duty- and quota-free East African Community (EAC) market of over 400 million people, comprising Uganda, Tanzania, Rwanda, Burundi, the DRC, South Sudan, and Somalia, which is soon joining,” Mukhwana said in a statement.
According to the PS, Kenya has been granted duty-free and quota-free access to the US market through the African Growth and Opportunity Act (AGOA), but Kenya has yet to reach 1% of that market, and thus, if the manufacturers set up shop in Kenya, they will also have access to the US market.
Through AGOA, we have 31 textile companies in Kenya that manufacture top brands such as Gucci.” Despite our limited market, Kenya is the largest exporter of textiles to the United States,” stated the PS. “Last week, we advertised for a synthetic fiber factory because we recognized that not all of the clothes we manufacture will be made from cotton, as some will be made from polyester and others,” Mukhwana explained, noting that Kenya’s 31 textile firms import all of their synthetic fiber. Shri Rohit Vadhwana, India’s Deputy High Commissioner in Kenya, stated that an Indian textile company, Best Lifestyle, has just constructed an apparel unit at the EPZ, which would employ over 3,000 people.
The textile industry is likely the most essential for any country, and they have seen it produce a lot of employment possibilities in India, and it would bring the advantages of contemporary job intervention to Kenya as well.
Kenya Boosts Technological Capacity with Indian Textile Machinery
Bringing textile machinery to Kenya is a step towards enhancing the country’s technological capacity, stated Vadhwana. He commended the Kenyan government for its support of Indian businesses, fostering an environment that encourages more establishments in the nation. Vadhwana further highlighted the recent entry of Sasaran Technologies, an Indian tech firm, into Konza Technopolis. From this strategic location, the company aims to serve the entirety of East Africa, showcasing the growing collaboration between Indian businesses and the Kenyan market.
125+ Companies to Converge in Nairobi for Textile and Machine Expo
There will be over 125 exhibiting companies at the exhibitions. This once-every-four-years event in Nairobi, Kenya, aims to “promote joint ventures and business cooperation for textile and machine manufacturers, which can act as a catalyst towards the modernization of the African textile industry and explore the potential of Kenya as a new business destination. This Business and Technology Event would lay a solid basis for future possibilities by providing knowledge, skill development, training, trade, and investment in a comprehensive and formal growth way.
