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A stitch in time to revive textile industry

By | November 9th 2010 at 00:00:00 GMT +0300

By Patrick Githinji

The Indian government has stepped in to revive the ailing textile sector, which employs nearly one-third of the industrial workforce.

In partnership with the Government, The Indian Textiles Research Association will facilitate transfer of technology in ginning and processing.

“India has offered to augment Kenya’s efforts to revive the sector by providing technical assistance in skills enhancement,” Indian Commerce and Industry minister Anard Sharma told Financial Journal

Textile exports to the US, under the Africa Growth and Opportunity Act (Agoa), have dropped from Sh21.7 billion in 2003 to Sh14 billion last year.

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He said, the agreement was reached after the Kenyan Government sought collaboration in value addition and technical assistance through a joint venture investment in textile sector.

Sharma said India will offer technical assistance through Textile Research Association, which includes South Indian Textiles Research Association (SITRA) and Central Institute for Research on Cotton.

“Both countries will facilitate formulation of a Memorandum of Understanding between the Kenya Industrial Research and Development Institute (KIRDI) and SITRA,” Sharma added.

A copy of minutes obtained by the Financial Journal say the Indian government will provide a list of manufacturers approved for supply of ginning and pressing machinery.

Preferential programme

The assistance comes at a time when Kenya’s textile exports to the US face stiff competition as the US government seeks to relax market access rules to low-cost manufacturers from outside Africa.

In one of the proposed reforms, the US Congress is working on a rule that proposes to reform the preferential trade programme and extend the duty-free-quota-free status to apparel products from non-African countries such as Cambodia and Bangladesh.

Textile exports to Kenya rose from $43.09 million in 2006 to $90 million last year.

Textile exports from Kenya to the US, under the Africa Growth and Opportunity Act (Agoa), have also dropped from Sh21.7 billion ($ 272 million) in 2003 to Sh14 billion last year.

“There is considerable increase in the volume of Indian apparel exports to Kenya for the past three years,” Sharma said.

Sharma said efforts to increase the volume of bilateral trade and diversify the composition of trade will include trade delegations, organisation of fairs, seminars and conferences.

In his presentation during the 2010 AGOA forum, Kenya Association of Manufacturers (KAM) Chairman Jas Bedi, said the US reforms follow years of sustained pressure from American businesses and non-profit groups to replace existing trade preference programmes with a comprehensive unified system.

“The combined effect of the preferential trade reform legislation and the TPP will destroy the African apparel industry that was created under Agoa,” he says.

Trade statistics indicate that by last year, African apparel exports to the US had fallen 48 per cent from the 2004 levels even as Asian exports grew tenfold over the same period with Bangladesh’s growing by 71 per cent,

Cambodia by 31 per cent, and Vietnam by 98 per cent.

“It makes no sense from a public policy perspective to extend a duty-free market access status to already competitive developing countries,” said Bedi, who is also the chairman of the African Cotton and Textile

Industries federation

Agoa allows sub-Saharan African countries to sell 6,400 products to the US quota and duty free.

Products are classified into sectors — agriculture, forestry, textiles and garments, chemicals, energy, footwear, minerals and metals, machinery, transportation equipment, electronics, miscellaneous manufactures, and special provisions.

Kenya is the second largest textile exporter to the US after Lesotho.

agoa textile african growth opportunity act
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