PUBLISHED ON December 9th, 2014

East Africa looks to more trade with India

Addis Ababa, Dec 7 (IANS): East African businesses are set to trade more with India by learning how 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).

The ITC, a joint agency of the World Trade Organisation and the UN, aims for businesses in developing countries to become more competitive in global markets, speeding up economic development and contributing to the achievement of the UN’s Millennium Development Goals.

The participants of the third SITA held in Ethiopia’s capital city of Addis Ababa Dec 4-5 analysed trade trends under the scheme for each of the SITA partner-country beneficiaries.

It also analysed key issues surrounding complying with the scheme like rules of origin, export requirements in the Indian market, issues impacting on export from SITA partner-countries to India, and the value chain from factory gate to the destination market in India, among others.

“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,” SITA coordinator Govind Venuprasad told IANS.

“It will also allow companies working in these sectors to become export ready to supply other markets”.

Following an amendment made two years ago in India’s Duty-Free Trade Preference (DFTP) scheme, least developed countries (LDCs) will receive preferential zero-duty access on 98 percent of the Indian tariff lines. It means goods exported from LDCs should have a competitive edge when entering the Indian market.

The stakeholders, representing business, government and civil society, worked together to finalise 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.

“Further investments from India would certainly help Tanzania make better use of the scheme,” Adam Zuku, director of industry development in the Tanzanian Chamber of Commerce, Industry and Agriculture, said.

“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.”

The SITA project is a new opportunity through which the Ugandan National Chamber of Commerce and Industry (UNCCI) shall market it because this is an opportunity to actually export to India though DFTP, according to Martin Okumu, head of communication department at the UNCCI.

“We have been exporting to India although our export volume is small but we believe, under SITA, we shall create more awareness, partner, and network Ugandan business community with Indian businesses and in that way we will cultivate more relations and even may be decide to do joint ventures, investments and so on,” he said.

This project will also be a generator of other support systems such as South-South cooperation and it could be the gateway to other trading opportunities in the world through which India already have, he said.

SITA is a project by Britain and Northern Ireland’s Department for International Development (DFID) and mandated by the ITC to design and implement it. On March 9, 2014, a memorandum of understanding (MoU) was signed between DFID and ITC marking the start of the project.

This project responds to the challenges of the selected East African countries — Ethiopia, Kenya, Rwanda, Uganda and Tanzania — face in increasing and diversifying exports. It also addresses trade priorities of the beneficiary countries so they can achieve sustainable development.

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 knowhow 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.

Source: Daiji

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.