How Indian firms are tasting success in East Africa

A trade initiative is helping mid-size businesses tap opportunities there.

A Kerala-based spices company recently started growing chillies in Rwanda, which is estimated to have increased the income of farmers there six-fold. A leather company from Tamil Nadu has set up a plant in Uganda producing one million pairs of shoes annually and is generating new jobs in both countries. And, 300 Ethiopian artists are getting handloom and handicrafts training in Bengaluru.

These are just a few of the success stories that have been spun over the past two-three years by Geneva-based development agency International Trade Centre’s initiative — ‘Supporting Indian Trade and Investment for Africa’ (SITA).

“We are looking at mid-sized companies which have less of a natural inclination to look abroad. Through the SITA initiative we are building bridges between India and East Africa by taking Indian companies to these countries to see with their own eyes what the opportunities are,” said ITC Executive Director Arancha Gonzalez, in a telephonic interview with BusinessLine.

Investment flows worth $71 million and additional trade flows of $26.5 million have so far been generated between India and East Africa (with an additional $10 million in the pipeline) as part of the six-year project (2014-2020) funded by the UK’s Department of International Development.

Gonzalez will be in India later this week and visit Jaipur, Chennai and Bengaluru to take stock of the progress made so far and prepare the ground for more partnerships.

Multiple sectors

The sectors being promoted include leather, spices, pulses, textile and apparel, leather, sunflower oil and IT and BPO.

“A lot of business deals have happened in the identified areas over the last couple of years, but there are a few which could create headlines,” said Gonzalez.

For instance, Kerala-based Akay Flavours has already tested four varieties of chillies in Rwanda and has increased cultivation from four hectares to 200 hectares. “Farmer groups earlier earning $23,000 per year growing tomatoes are now earning $1,50,000 growing chillies. There are 23 farmer communities benefiting from it,” Gonzalez said.

Tamil Nadu-based Hurera Leather Company has invested in a plant in Kampala, Uganda, producing one million pairs of shoes every year. “It is a two-way street. The company is importing high-quality leather from Uganda to produce shoes in India and creating jobs at home. Additionally, it is also manufacturing in Uganda,” she added.

When the project ends three years from now, the associations that have been built will continue and business will keep growing, says Gonzalez. “There are bridges that we have built not only between individual companies but also between associations. This will keep business and investments flowing,” she said.

Source: Business Line