By Nicola Mawson
The High Commissioner Designate to India, Professor Anil Sooklal, said last night he believes two-way trade between India and South Africa has the potential to grow to $25 billion (R446.3bn) from the current $19bn in a short period.
India is South Africa’s fourth-largest trade partner as the sub-continent exports about $5.3bn in goods and services to South Africa annually, said Sooklal, speaking to Business Report ahead of the official launch of the India South Africa Chamber of Commerce (ISACC).
Sooklal said he believed that the new chamber could boost trade between the countries, especially when it came to creating awareness of the opportunities that partnerships with India afforded. India and South Africa have had diplomatic relationships for 30 years.
There are more than 130 Indian companies in South Africa that collectively employ more than 20 000 South Africans, he said.
“Yet South African businesses don’t know much about the Indian market,” said Sooklal.
Indian companies represented in South Africa include Tata, Mahindra, Mittal SA, and Vedanta, which recently made a R21bn investment in South Africa, said Sooklal. “You have all of these major multinationals,” he said.
India is rapidly becoming more important globally, he said. The country has the world’s fifth largest economy, which will become the third largest by 2027. It is home to the globe’s biggest population, and its GDP is valued at $1 trillion, which is anticipated by the International Monetary Fund to grow at 7.5% this year. “This is significant,” said Sooklal.
Some 1.4bn people live in India, of which 400 million are middle class, said Sooklal. “That gives you a massive, massive market…”
He said South Africa should be benefiting from India’s vast economy, which is why ISACC is so important. Sooklal said it would assist companies across both countries to network with each other, address barriers to trade, and educate each other on how best to facilitate trade. “It’s important under the Indian environment.”
A key area impediment to trade is the lack of direct flights, which is something that hinders both the tourism sector as well as trade between the two countries, said Sooklal. This was previously not the case, he said.
Currently, Tata’s Air India and Indigo are both looking at implementing direct flights. “A direct flight would also be a major boost to two-way trade,” he said.
Sooklal said India has one of the fastest-growing outbound tourism sectors, with 80 000 Indians travelling to South Africa each year. “We believe that number can be more than doubled.”
Moreover, said Sooklal, India can assist South Africa with developing its small-, micro, and medium-sized enterprises. He said this is a strength of the India sub-continent, with companies such as Tata having been started by families.
He also believed that India can help South Africa develop its ICT sector as it has many smart cities. “That’s where we can look at partnerships as well.”
It was also important to determine how South Africa can assist Indian companies to enter the market, which they see as a gateway to Africa, said Sooklal.
Lebogang Zulu, the chamber’s interim secretariat, told Business Report it was key for South Africa to increase its trade. “Our debt to GDP ratio in South Africa is just over 80%. We can no longer focus on only domestic spaces, we have to strengthen our spaces internationally as a business community,” she said.
“The more activity, the more we produce, the more the trade, the better we contribute to improving our debt to GDP ratio. It’s not a government problem. It’s a South African problem,” said Zulu.
BUSINESS REPORT