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South Africa-India bilateral trade picks up well despite a
late start
Bilateral trade between India and South Africa
started in 1993 since earlier there were trade restrictions
on account of apartheid pursued by the then South African
regime.
| ‘We are looking
at long-term relations in all the key sectors’ |
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Sharing expertise in respective areas of strength
can take bilateral relations far ahead, the South African
High Commissioner, Maite Nkoana-Mashabane, tells
Huma Siddiqui in an interview. Excerpts:
Which are the areas where South Africa and India
can have joint ventures?
South Africa can be a thriving base for setting
up of export-oriented units. India is capable of providing
know-how and expertise whereas raw material and infrastructure
is in abundance in South Africa. Infrastructure is one
of our strongest areas. It’s time now for the six major
players in this to move out and share their expertise.
Our government is actively considering the first draft
of the India and South Africa Free Trade Agreement recently
given by the Government of India. Our economy had transformed
dramatically over the last decade, especially since
1994. There are a wide range of possibilities to further
enhance India and South Africa Trade and Investment
Promotion in several sectors including IT-enabled services
and training, health care, infrastructure, energy and
food processing.
The “Focus Africa” Plan launched by the Government of
India during the financial year 2000-01 will include
a set of focussed initiatives to boost Indo-African
co-operation.
Is there scope for Indian IT companies in South Africa?
We want to set up a working group between the two
countries. NIIT and Aptech are already there. We want
to encourage partnerships and joint ventures. Recently,
JNG, a South African company, tied up with the Tatas
for IT training. The idea is to go in for long-term
relationships in all the sectors.
Have you identified areas were Indian investment
would be welcome?
During apartheid, our small-scale industry suffered
a great deal. Efforts are on to take help from India
to revive the small sector. Small-scale farming is another
area where we have identified Punjab and are looking
for co-operation. Another area is agricultural institutes
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In addition, Indian companies could learn from us in
the fields of distribution, metering, transmission and
generation of power. In turn, we could look towards
India in the area of generation, operations and maintenance,
transmission, metering, and distribution and greenfield
projects.
How about defence-related investments?
We understand the challenges involved in clearance
of projects in a true democracy. After the Indian government
announced the opening up of the defence sector for private
participation, several South African companies have
shown interest in the areas of 155 mm guns, ammunition,
mine protection vehicles, aviation and night vision
devices. In fact, a recent delegation from CII to South
Africa was a major success in this regard.
What is the tourism scenario?
There has been a significant increase in tourist traffic
from India. We want to do much better. South Africa
will soon launch “Cycle of Sunshine”. We are trying
to talk to the aviation minister for getting landing
rights in Delhi. u
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Indian joint ventures in South Africa provide
scope for export of manufactured goods, since South Africa
acts as a gateway to the African Continent. South Africa is
a flourishing market for Indian textiles, fabrics and manufactured
garments. Furnishing fabrics and yarns have high marketing
potential, and Indian exporters have an added advantage in
exporting to South Africa in textiles and garment sector as
there are no quota restrictions.
Following textiles are items like pharmaceuticals, pharmaceutical
formulations, bulk drugs, dyestuffs and dye intermediates.
Indian pharmaceuticals and dyestuffs are doing well despite
keen competition from some East European countries.
As regards food products, rice, tea, spices, tobacco and processed
foods in the form of tinned and canned foods have a sizeable
market. In addition, animal feeds and various kinds of seeds,
leather goods, imitation and costume jewellry and Indian handicrafts
are also doing well.
In engineering, both light and heavy engineering goods have
bright prospects in the region.
But there still remain untapped opportunities. In the African
Continent, South Africa is regarded as technologically advanced,
and is in a comfortable position to set up joint ventures.
Coal mining technology, steel, construction, energy generation
and manufacturing of power equipment are some of the areas
in which Indian companies can take advantage of South African
know-how.
Indian participation in South Africa-based joint ventures
is primarily in textiles, agro processing and pharmaceuticals.
Possibilities of collaboration are also being explored in
electrical goods, automobile parts and machines tool manufacturing.
In 1998, trade volume crossed the figure of $700 million.
India’s exports to South Africa in 2000 were around $500 million.
According to industry experts, in 2001-02, it is expected
to touch the target of $800 million.
However, the average tariff levels for most products excluding
textiles and automobiles have consistently dropped over the
last five years and today they stand at 4 per cent. South
African exports of auto components and motor cars stood at
$3 billion and the auto industry there is keen to develop
strategic partnership with its Indian counterpart.
The Confederation of Indian Industry and Federation of Indian
Chambers of Commerce and Industry have been pursuing various
segments of bilateral trade. Besides, the India Trade Promotion
Organisation has also been organising exclusive trade exhibitions
in South Africa.
A recent “Made in India” show held in Johannesburg is said
to have attracted over over 1,500 trade and business visitors
from South Africa, Mozambique, Swaziland, Botswana, Namibia
and Mauritius. The four-day exposition, organised by CII in
collaboration with the Indian High Commission in South Africa,
showcased over 90 Indian companies representing sectors like
infotech, textiles, drugs and pharma, mining and ocean development,
food processing, auto components, machine tools, dairy and
construction equipment.
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