Unlocking East African businesses access to Indian markets
East African businesses are set to trade more with India by learning to take advantage of the country’s duty-free market access scheme, facilitated by the Supporting India’s Trade Preferences for Africa (SITA) project of the International Trade Centre (ITC).
Following an amendment two years ago to India’s Duty-Free Trade Preference Scheme, least developed countries will receive preferential zero-duty access on 98% of Indian tariff lines. This means goods exported from least developed countries should have a competitive edge when entering the Indian market.
However, the five SITA countries – Ethiopia, Rwanda, Uganda, the United Republic of Tanzania, and Kenya, the only non-least developed country – have not seen trade with India increase to the expected levels since the scheme went into full effect in October 2012.
‘For beneficiary countries to reap the most benefits from the scheme, they just have to send letters of intent and meet the rules of origin requirement as specified in the scheme,’ said Pranav Kumar, Head of International Policy and Trade, Confederation of Indian Industry. ‘Much needs to be done to raise awareness of the scheme among members of the Indian private sector, as they have yet to fully understand how to source products from less familiar trading partners, and also invest in least developed countries to export products to India.’
To promote such awareness and understanding, African and Indian entrepreneurs, policymakers and members of international organizations will discuss ways to make better use of the scheme at SITA’s third Partnership Platform meeting in Addis Ababa, Ethiopia, on 4-5 December, following previous meetings in Nairobi, Kenya, and Kigali, Rwanda.
‘Further investments from India would certainly help Tanzania make better use of the scheme,’ said Adam Zuku, Director of Industry Development, Tanzanian Chamber of Commerce, Industry and Agriculture. ‘It would help address the country’s limited capacity to meet export demands, and Indian investors would be better placed to source the right products and access the right buyers.’
‘Building productive capacities, market linkages and enhancing investment attractiveness in the selected sectors will be a key way to ensure that SITA delivers impact and provides a sustainable template for similar South-South trade and investment projects,’ said Govind Venuprasad, SITA Coordinator. ‘It will also allow companies working in these sectors to become export ready to supply other markets.’
At the meeting, members of the East African public and private sectors will learn about the Duty-Free Trade Preference Scheme’s compliance and market requirements, particularly in sectors with high untapped export potential. Representatives of the Indian private sector will learn to make better use of the scheme to source products from Africa. The discussions will also focus on addressing procedural and regulatory obstacles to trade, in part through governments creating a more business-friendly environment through effective policies.
The stakeholders, representing business, government and civil society, will work together to finalize SITA’s intervention plan, focusing on specific activities in the selected sectors in each of the five East African countries. The sectors, selected through a series of consultative meetings, reflect demands in international markets as well as the capacity of African suppliers, and are selected in line with national and regional trade development goals.
The goal of SITA (2014-2020) is to enable East African enterprises to enhance their competitiveness to produce high-quality goods that match overseas market requirements. Indian businesses will partner by providing technology, skills know-how and investment to build capacities in SITA African countries for value-added production in sectors such as cotton, coffee, pulses and beans, oilseeds, and information and communications technology. SITA is funded by the United Kingdom of Great Britain and Northern Ireland’s Department for International Development.