India- South Africa to enhance trade and military ties later this month

South African President Cyril Ramaphosa will be the chief guest at India’s 70th Republic Day celebrations on January 26.

India- South Africa to enhance trade and military ties later this month
South African President Cyril Ramaphosa will be the chief guest at India's 70th Republic Day celebrations on January 26. (File photo: PIB)

Enhanced engagement between India and South Africa and greater cooperation in areas including military to military, maritime security, skill development, and agriculture and information technology will be the focus of delegation level talks when leaders of the two countries meet later this month. The two countries have set a trade of $ 20 bn by 2021.

South African President Cyril Ramaphosa will be the chief guest at India’s 70th Republic Day celebrations on January 26.

In 2018, the two countries celebrated their 25th anniversary re-establishing their economic and diplomatic relations and to commemorate the occasion, the first India-South Africa Business Summit had taken place in Johannesburg in April, which was followed by the 10th BRICS (Brazil, Russia, India, China and South Africa) Summit in July. This was also followed by IBSA (India, Brazil, and South Africa) meet — the two major groupings where India has been playing a key role.

As has been reported earlier, at the India-South Africa Business Summit investors from both countries had discussed existing opportunities in various sectors including automobile, healthcare, pharmaceuticals, agro-processing, and start-ups. And for the investors from South Africa, an area of interest is biotechnology – a sector where the government of India allows 100 percent FDI through the automatic route. Travel and tourism, e-commerce, renewable energy, and agro-processing are some of the sectors where the South African countries can enter the Indian market.

According to sources, healthcare and pharmaceutical sector has been identified as a key area of cooperation not only in South Africa but other African countries.

“Africa is a continent which receives nearly 20% of Indian pharmaceuticals. India had hosted the first India-Africa Health Sciences Meet in 2015, followed by health cooperation with new initiatives, including public-private-partnership programmes, in the area of health. Top Indian Pharma companies have established units in various parts of Africa, including Ethiopia, Uganda, DRC, Zambia and Ghana”.

According to a short documentary screened by the Ministry of External Affairs (MEA) a few years ago, a leading pharma company Cipla, was the first company to offer anti-retroviral drugs (ARV) – drug therapy for HIV – at $1 (Rs 68) per day, in an effort to making this medication affordable for the millions affected in South Africa.

Recently, another major pharma company Ranbaxy, has established a second manufacturing facility, by investing $30 million in that country to make basic analgesics, anti-histamines, vitamins, and other over-the-counter medication.

India is South Africa’s sixth largest trading partner in Asia, growing steadily from S$4.7 billion in 2007 to close to $10 billion at present. The total trade reached a peak of $15 billion in 2012 – before the global economic slowdown and domestic political factors put a brake on the rapid expansion.

However, South Africa’s active involvement in multilateral organizations, such as the IBSA Forum (IBSA), the New Asia-Africa Strategic Partnership (NAASP), the Indian Ocean Rim Association for Regional Co-operation (IORARC), and the annual BRICS Summits has helped in the partial recovery in bilateral trade.

According to reports, in an effort to attract investment, the government of South Africa has designated Special Economic Zones where they offer special incentives.

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Indian high commissioner to South Africa Ruchira Kamboj in an interaction with Engineering News of South Africa recently said that the bilateral trade between India and South Africa currently stands at about $10-billion. “More than 150 Indian companies have invested in South Africa, employing more than 20 000 South Africans. These investors include some of India’s biggest and best known groups, such as Tata, Mahindra, Vedanta and Motherson Sumi.”

According to the Indian High Commissioner, in the defence sector, South African State-owned defence industrial group Denel is free to do business with the Indian government and Indian companies.

Both countries are looking for better connectivity as currently there are no direct flights and with direct flights both trade and tourism will improve between the two countries.

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First published on: 15-01-2019 at 22:58 IST