Indian manufacturers are increasingly considering African countries, including Kenya, as a production base, as prolonged trade negotiations between India and the United States over the steep tariffs imposed by President Donald Trump disrupt export flows and threaten access to the American market.
Exporters who spoke to Bloomberg have expressed concerns that they could miss the January window, which is critical for securing contracts for the summer of 2026. The uncertainty stems from the delay surrounding the U.S.-India trade agreement, which has made American buyers cautious.
The situation has been worsened by a 50 per cent U.S. tariff imposed on Indian exports in August, which significantly reduced order volumes during the traditionally busy winter and Christmas season of 2025.
The tariffs have affected India’s labour-intensive industries, including textiles, apparel, handicrafts, gems, and leather products.
In response, some manufacturers have begun shifting parts of their production to African countries, with Kenya emerging as a preferred destination due to lower tariff exposure when exporting to the United States.
Several Indian apparel and leather exporters have already established or expanded operations in Kenya. One Indian manufacturer already operates four factories in the country, while another Mumbai-based manufacturer has explored supplying U.S. buyers through its African facilities.
Exports from Kenya to the U.S. attract tariffs as low as 10 per cent, compared with the 50 per cent levy imposed on goods manufactured in India. Industry executives said relocation decisions are driven by strict timelines set by U.S. buyers.
Rafeeque Ahmed, chairman of one of India’s largest shoemakers, said January 15 is the effective date for securing bulk orders needed to sustain revenues for the summer and autumn seasons. His company derives about 60 per cent of its export revenue from the U.S. market.
Ahmed said his firm had reduced production and laid off workers in India as orders declined. Similar production cuts have been reported across the sector, prompting companies to seek alternative manufacturing hubs such as Kenya to maintain supply commitments to American clients.
U.S. trade data illustrate the impact of the tariffs. Apparel imports from India fell by about 12 per cent year-on-year to $376 million in September 2025, while imports of rugs declined by 10 per cent to $98.4 million over the same period.
Exporters said continued delays in finalising a trade deal could further disrupt shipments between April and August, as well as the year-end holiday season.
In Kenya, the shift aligns with President William Ruto’s job creation and industrialisation agenda, which prioritises manufacturing as a key driver of employment.
The government has identified the textile, apparel, and leather sectors as central to its Bottom-Up Economic Transformation Agenda, with a focus on attracting foreign direct investment, expanding export-oriented production, and increasing formal employment opportunities.
Kenya has promoted its Export Processing Zones and Special Economic Zones as part of this strategy, offering incentives aimed at drawing manufacturers serving international markets.
