Bid to revive India-SA economic ties amid the Covid-19 new normal
IOL - BUSINESS REPORT - ECONOMY / 09 DECEMBR 2020 - 14.33 / JONISAYI MAROMO
PRETORIA – Despite the setback of bilateral trade between South Africa and India due to the outbreak of the Covid-19 pandemic, diplomats and business leaders from both countries have intensified efforts to revive the economic ties as the stringent lockdowns have been considerably eased.
High Commissioner of India in South Africa Jaideep Sarkar said among other avenues being explored to elevate economic ties between New Delhi and Pretoria, a virtual session exploring bilateral business opportunities between India and South Africa was held on Tuesday.
South Africa and India have intensified efforts to revive the economic ties as the stringent
lockdowns have been considerably eased. Photo: File
The virtual session incorporated experts and senior officials from the two countries, including Sakar; South Africa’s High Commissioner to India and former premier of KwaZulu-Natal (KZN) province Sibusiso Ndebele; Deepak Bagla, chief executive of Invest India; acting deputy director-general at South Africa’s Department of Trade, Industry and Competition Yunus Hoosen; Jitin Bhatia, president of the India Business Forum in South Africa; and several other panellists.
Sakar told African News Agency (ANA) that there were too few platforms for business leaders from both countries to interact and compare notes.
“One of the issues that hinder increased economic engagement between the two countries is the lack of information and contact between the respective industries. We need many more platforms for our businessmen to interact and to understand more specifically the investment climate and opportunities that exist in the other country,” said Sakar.
“It is hoped that the seminar today (Tuesday), which has a large number of business participants, will be a first step to further such interactions which can focus on specific sectors and geographies.”
He added that bilateral trade and investment relations between India and South Africa had been growing steadily but were “clearly below potential”.
“The leaders of the two countries, Prime Minister Narendra Modi and President Cyril Ramaphosa, have emphasised the importance of the economic partnership in the bilateral relationship and of widening and deepening mutually beneficial business activity that would contribute to growth and employment in both countries,” said Sakar.
“From India's perspective some of the priority sectors are information technology, which dovetails well with South Africa's emphasis on 4IR, pharmaceuticals, food processing and financial and insurance sectors, among others.”
There were around 150 Indian companies already invested in South Africa in a wide range of sectors.
“We look forward to increased South African investment in India to take advantage of the India growth story.”
Adding its voice, the India Business Forum in South Africa, led by Bhatia, said the salient hurdles bedevilling Indian firms seeking to invest included delays in visa processing, errant supply of electricity and broad-based black economic empowerment (B-BBEE) legislation.
“Some of the challenges faced by Indian companies wanting to do business in South Africa include significant delays in visa processing for white-collar skilled expats, a lack of direct air connectivity, the B-BBEE policy and continuous adaptation of this policy poses uncertainty for investors. Handing over a 25% stake in a multinational to a local partner as an effort to enhance inclusivity in society is not always understood,” said Bhatia.
“However, there are many Indian companies who have understood the system, adapted and as a result are thriving. Disruptions and uncertainty in labour, power, land and the economy all pose challenges to potential investors.”
He said, however, special units such as the Invest SA investor facilitation centres had played a significant role in easing the entry and process of Indian companies doing business in South Africa.
“With a continuous commitment to implementing and maintaining these types of structures, business can only get easier. The digitisation of many of the administratively cumbersome processes would be a positive step by the South African government towards easing the process of Indian investors into South Africa,” said Bhatia.
“It would cut down unnecessary time as well as close the loopholes for potentially undesirable activities.”
Bhatia highlighted that South Africa and India have “a deeply intertwined relationship that connects the countries historically, politically, culturally” and economically.
“Co-operation expands across defence, development, science and technology, culture and trade and investment. The large Indian diaspora and number of Indian companies in SA stand testimony to this. The total trade between India and South Africa stands at US$11.07 billion and has seen a steady growth over the years,” said Bhatia.
Some of the major exports from India to South Africa include vehicles, transport equipment, drugs and pharmaceutical supplies, engineering goods, dyes and chemicals, textiles, rice, gems and jewellery.
Imports from South Africa to India include gold, coal, copper ores, phosphoric acid, manganese ore, aluminium ingots and other minerals.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER