Indian low-cost carrier begins daily flights to Kenya

Photo credit: IndiGo

Indian low-cost airline IndiGo has begun daily direct flights from Mumbai to Nairobi, Kenya, marking its foray into the African market. The direct flight is expected to boost trade and business between the two countries. The entry of the low-cost carrier may also bring down airfares, as IndiGo competes with full service national flag carriers - Kenya Airways and Air India.

In 2022, India ranked as the fifth-largest source of tourists for Kenya, with 83,106 visitors. Of these, about 38% visited Kenya to see friends and family, and 36% travelled for leisure purposes. Recognising the significance of the Indian market, Kenya has implemented specific marketing campaigns focused on attracting Indian tourists.

India and Kenya share deep historical trade and cultural links pre-dating the colonial period. Those links strengthened between the nineteenth and the twentieth century when British colonial authorities brought in thousands of indentured labourers from India to construct the Uganda-Kenya Railway. The track, which connected the coastal city of Mombasa to the hinterland accelerated economic activity in East Africa and served as a vital infrastructure that solidified colonial rule. After its completion, many of these Indian labourers opted to settle, setting up businesses and farms and cementing their role in Kenya's economic and social fabric. In subsequent years, a sizable number of Indians – mostly Gujaratis and Punjabis - capitalised on economic opportunities in East Africa and are today naturalised citizens of the republic.

Many leading Kenyan companies trace their origins to entrepreneurs of Indian descent. One of the most prominent is Bidco Africa, which was founded in 1970 by Bhimji Depar Shah initially to manufacture garments. The company ventured into soap production by 1985 and then launched its edible oil manufacturing segment in 1991. In 2002, Bidco acquired Unilever's brands in the edible oil and soap sectors. Today, Bidco has a 49% share of the edible oils market in Kenya and manufactures a broad spectrum of products, including edible oils and fats, hygiene and personal care items, and a variety of food and beverage brands. It has also broadened its reach regionally with subsidiaries and distributorships across 17 African countries. Furthermore, Bidco has engaged in joint ventures with global companies such as Singapore’s Wilmar International for vegetable oil production in Uganda, and Co-Ro, a soft drinks manufacturer in Denmark.

Centre Director Amit Jain in Nairobi at the Bidco bottling plant in Kenya, earlier this year

Additionally, Indian-born industrialist Narendra Raval is behind the Devki Group of Companies, a major player in steel, aluminium, and cement manufacturing. On a similar note of entrepreneurial success, Abdul Karim Popat, who passed away in 2013, transformed a modest second-hand car dealership into the Simba Corporation, a Kenyan conglomerate with stakes in vehicle distribution, hospitality, real estate, and venture capital. Other standout firms with Indian lineage include Sameer Group, a conglomerate with interests from financial services to agriculture and information technology, and construction materials provider Ramco Group.

In 2021, India exported goods worth US$2.55bn to the East African nation. Key exports included refined petroleum (US$504m), packaged medicines (US$253m), and semi-finished iron (US$149m). On the other hand Kenya shipped US$107m worth of goods to India the same year, with dried beans and lentils (US$42.8m), carbonates (US$20.5m), and tea (US$11.7m) leading the list.

Several Indian companies hold significant investments in Kenya. Mobile telecommunications provider Airtel ranks as the second-largest in the market, trailing only the local firm, Safaricom. In the banking sphere, both Bank of Baroda and Bank of India maintain a footprint in Kenya. Within the automotive sector, Tata Motors and Ashok Leyland are among the Indian manufacturers with operations in the East African nation. Moreover, the Indian fast-moving consumer goods conglomerate, Godrej Consumer Products, has a presence in Kenya, with an array of home, hair, and personal care items. In the resources domain, Indian entities ONGC Videsh and Oil India have recently expressed interest in acquiring stakes in Kenya's Lokichar oil fields.

 

References

‘Simba Corp – from small car dealership to leading conglomerate’, How we made it in Africa, 20 August 2014

‘Uhuru ends India visit with call on its companies to invest in Kenya’, Business Daily, 12 January 2017

‘Annual Tourism Sector Performance Report 2022,’ Ministry of Tourism, Wildlife & Heritage, 23 February 2023

‘Now, 3 non-stop flights to operate from city to Kenya,’ The Times of India, 05 August 2023

‘Nairobi calling: IndiGo opens the door to Africa with direct flights to the Safari Capital,’ IndiGo, 05 August 2023

‘Airtel Kenya's network expansion receives significant investment,’ Telecom Review Africa, 14 August 2023

‘Indians in Kenya,’ Wikipedia, Accessed 18 August 2023

‘Naushad Merali,’ Wikipedia, Accessed 18 August 2023

‘Narendra Raval,’ Wikipedia, Accessed 18 August 2023

‘Company history,’ Ramco Group,  Accessed 18 August 2023

‘India - Kenya trade relations,’ High Commission of India, Nairobi, Accessed 20 August 2023

‘India/Kenya,’ OEC, Accessed 20 August 2023

‘Our joint ventures’, Bidco Africa, Accessed 28 August 2023

‘Bidco Africa’, Wikipedia, Accessed 28 August 2023