Kenya and Tanzania present significant growth potential for Indian exporters. Both countries have growing middle classes, increasing urbanization, and improving infrastructure, creating favorable conditions for trade. Additionally, the African Continental Free Trade Area (AfCFTA) agreement aims to create a single market for goods and services across 54 countries, further enhancing trade opportunities.
When exporting to Africa from India, the main products typically shipped include petroleum products, pharmaceuticals, vehicles and components, engineering goods.
Key Benefits and Incentives for Exporters to Africa
Market Access Initiative (MAI): This scheme provides financial assistance to exporters for market promotion activities in Kenya and Tanzania. It covers expenses related to trade fairs, exhibitions, buyer-seller meets, and market studies.
Focus Market Product Scheme (FPS): Under this scheme, exporters targeting Kenya and Tanzania can receive incentives to enhance their competitiveness in these markets. The incentives range from 2-5% of the Free On Board (FOB) value of exports.
Export Promotion Capital Goods (EPCG) Scheme: This scheme allows duty-free imports of capital goods used for manufacturing export products. Exporters can invest in modern technology without heavy upfront costs, improving product quality and production efficiency.
Interest Equalisation Scheme: This scheme provides a reduced interest rate on pre-shipment and post-shipment export credit, making it easier for exporters to manage their finances.
Trade Infrastructure for Export Scheme (TIES): This scheme supports the development of trade infrastructure, such as export promotion centers and warehouses, to facilitate exports to Kenya and Tanzania.
Advance Authorisation Scheme: Exporters can import raw materials, components, and consumables without paying customs duties. This helps reduce upfront costs, ensuring better cash flow and competitive pricing.
The Indian government's incentives and benefits provide a strong foundation for exporters to tap into the Kenyan and Tanzanian markets. By leveraging these schemes, Indian exporters can enhance their competitiveness, reduce costs, and contribute to the economic growth of both India and these African nations.