India-South Africa India-South Africa 2019

SPECIAL REPORT India is South Africa’s seventh largest trade partner. Imports from India account for four percent of the total while imports from China account for approximately twenty percent. This is a large gap when considering the strong cultural and political ties between the two nations. South Africa had the largest Indian diaspora in the world two decades ago. The bilateral commercial and political relationship between South Africa and India is special and based on common colonial past and shared histories. Many companies from India have become entrenched in South Africa, the ﬂ ow of Indian business into Africa has increased signiﬁ cantly since 2008. India is South Africa’s sixth largest trading partner in Asia, growing steadily from US$4.7 billion (Rs 318 billion) in 2007 to close to US$10 billion (Rs 605 billion) at present. Total trade reached a peak of US$15 billion (Rs 1 trillion) in 2012, before the global economic slowdown and domestic political factors put a brake on the rapid expansion. South Africa has been actively involved in multilateral organizations, such as the India- Brazil-South Africa Dialogue Forum (IBSA), the New Asia-Africa Strategic Partnership (NAASP), the Indian Ocean Rim Association for Regional Co-operation (IORARC), and the BRICS . 8 • India-South Africa • 2019 India-South Africa cooperation needs to be expanded beyond current levels. The bilateral dialogue should include a critical review of developments not only in Africa but also in Asia. Both India and South Africa are now working to boost trade volumes over the next ﬁ ve years to reach US$20 billion (Rs 1.3 trillion). A recent joint study by the Confederation of Indian Industries and Price Waterhouse Cooper confirms that Indian companies have cumulatively invested over US$4 billion (Rs 260 billion) and created more than 18,000 jobs in South Africa. The same report states that at present, there are over 130 Indian companies set up in South Africa. Several Indian companies also collaborate with Africa-based foundations such as the First Rand Foundation and sponsor India-Africa exchange programs for skill development. Mostly based on the Information Technology (IT) sector, the programmes aim to improve the employability of African graduates by providing international work experience and training. 9 South African companies have invested in India, accounting for US$790 million (Rs 53 billion), largely in the banking, ﬁ nancial services, and insurance (BFSI) sector. The two countries signed a Double Taxation Avoidance Agreement (DTAA) in 1998 with a view to encourage investments. Last year, South Africa’s Phelan Energy Group – chieﬂ y responsible for lowering Indian solar tariﬀ s with aggressive bids – won the contract to build a 50-megawatt solar project in the Indian state of Rajasthan. India-South Africa cooperation needs to be expanded beyond current levels. The bilateral dialogue should include a critical review of developments not only in Africa but also in Asia. In this context, South Africa should also continue to follow a balanced approach towards Asia, recognizing its growing economic strength, innate diversities and an essential need and inclination towards multi-polarity. India will beneﬁ t from South Africa’s evolving assessment of the political and security situation, reform of the African Union, progress towards Agenda 2063, food security and climate change challenges and other Pan-African developments. Both countries would need to engage on extensive

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