Parks Tau
Let me take this opportunity to congratulate India as it celebrated its 78th Independence Day on August 15, 2024. South Africa and India enjoy a strategic partnership, and bilateral relations are anchored in the shared history of friendship and solidarity. Close and friendly ties continue to be maintained bilaterally and through forums such as BRICS+, India Brazil South Africa Forum, Indian Ocean Rim, G20 and other forums.
South Africa and India have established a strong framework of co-operation with the conclusion of many agreements and of understanding since the establishment of diplomatic relations in 1993. We believe that the forum will continue to nurture and strengthen the bilateral commercial relations.
The South African government’s ambitions of generating growth, creating sustainable jobs and eradicating poverty through an inclusive economy can be achieved only through collaboration with the private sector. In this regard, we believe that the India-South Africa Chamber of Commerce will play a significant role in facilitating trade and investment between our two countries.
South Africa is committed to strengthen bilateral trade and investment with India. In 2023, India ranked number 8 as South Africa’s export destination and number 4 as source of imports. Over the past five years, our bilateral trade increased from $8 billion (R143 bn) to $13bn. Based on the data reported by South Africa Revenue Service, we are experiencing a trade deficit of $2.4 billion. The bulk of South African exports to India are primary commodities, with coal alone contributing 62% of our total exports to India.
Consequently, we have not reached the target of $15bn by 2015, set during the meeting between our heads of state in Delhi in 2010, nor the 2018 target of $18bn. We will need to intensify our efforts to facilitate trade and investment. This will require an increase in private sector engagement to devise ways of improving trade and government interaction to deliberate and resolve barriers impending the expansion of trade, among other issues.
As a result, the launch of the India-South Africa Chamber of Commerce is timely and can assist to strengthen our economic relations in mutually beneficial ways.
The Government of National Unity’s (GNU) key priorities are to drive inclusive growth and job creation; reduce poverty and tackle the high cost of living; and build a capable, ethical and developmental state. The seventh administration is, therefore, prioritising industrialisation as a key contributor to achieve growth.
The aim is to ensure that growth is inclusive and transformational and drives the redistribution of wealth and opportunity. The chamber must, therefore, explore how bilateral co-operation can contribute to the achievement of the objectives. The role of the private sector is key in promoting industrialisation, economic growth, development and job creation, especially given the high level of unemployment in our country.
The achievement of the objectives set by the GNU necessitate that we leverage the partnership with key trading partners, including to ensure that we change the structure of our trade to more value-added products and services. We have identified potential export opportunities in fresh fruits (apples, avocados, citrus and pears), agro-processed products; chemicals; beneficiated metal products; jewellery; mining capital equipment; arms and defence sectors.
We look forward to welcoming Indian companies that are planning to undertake more Procurement Missions to South Africa in 2024. Please reach out to the SA High Commission in India and the Department of Trade, Industry and Competition (dtic) to see how best we can support you on the missions. We anticipate that the India-South Africa Chamber will play a pivotal role in ensuring that South African exporters can engage Indian buyers when they undertake selling missions to India.
India has emerged as an essential source of foreign direct investment for South Africa and continues to actively contribute to our investment drive. We appreciate the presence of Indian companies in our country and encourage more Indian companies to further expand their manufacturing footprint in South Africa.
Investments in the health-care sector are a priority for us as we strive to improve our supply security, especially in the pharmaceutical and medical device sector. Other investment opportunities exist in the Global Business Services (GBS) Sector (there are a few companies in SA but we seek more); defence and aerospace is also another sector for potential collaboration and we see opportunities for leading companies in the defence sector to manufacture and be part of the value chain between the two countries; energy; automotive components and agro processing also offer potential areas for collaboration.
Let me take this opportunity to invite Indian companies to participate in the following upcoming events: Africa Health taking place in Cape Town (October), Automotive Week (October), GBS Conference (November), Mining Indaba (February 2025) and Energy Indaba (March 2025).
We acknowledge the critical role that the private sector plays in growing the economy and job creation. We believe both countries can draw from each other’s experiences and explore industrial co-operation in sectors with potential such as: renewable energy, automotive component manufacturing and health care (pharmaceutical and medical devices).
Over the next five years, we will seize the enormous opportunities in renewable energy for inclusive growth. South Africa has some of the best solar and wind resources in the world. As we undertake a just transition towards renewable energy, South Africa will be focusing on creating a green manufacturing sector centred on green hydrogen and associated products, electric vehicles and renewable energy components.
The dtic, for its part, is also strengthening collaboration with India on trade and investment through the South Africa-India Joint Working Group led at the deputy director-general level. The Joint Working Group provides an opportunity to address trade barriers that might be hampering our trade; explore ways to increase two-way investments and discuss areas of co-operation that could yield mutual benefits between our countries.
The last meeting took place 5 years ago in 2019, and the department is working on hosting the Indian side to a second South Africa-India Joint Working Group on Trade and Investment in October this year.
We will be relying on and expecting the private sector and the chamber to raise issues that hinder trade and identify opportunities that both governments can help unlock and facilitate trade.
India is the fifth largest economy of the world and expected to grow to become a $5 trillion economy in the next three years. India is one of the largest markets, with estimated population of 1.43 billion. Therefore, it is important that South Africa private sector explore and exploit opportunities in India, in particular export of value-added, manufactured exports.
Similarly, Africa is moving towards one African market. To date, 54 countries have signed the Africa Continental Free Trade Agreement (AfCFTA) and 47 signatories have deposited instruments of ratification. Africa is creating the largest single free trade area in the world, with 1.4 billion people and a gross domestic product of $3.4 trillion. Therefore, Africa is the place to invest for Indian companies to take advantage of opportunities offered by the AfCFTA, with South Africa serving as one of the gate-ways into the continent.
Finally, let me congratulate all the partners that collaborated to launch the India-South Africa Chamber of Commerce and to host this auspicious event. We value the establishment of this chamber and we view it is as an initiative that will promote trade and investment ties, assist to highlight challenges that we, as governments working with you, need to resolve to unlock trade and investment opportunities that can make a greater impact on our economic relations.
The dtic will work closely with the organisation as we strive to strengthen business relations between our two countries.
Together, we can increase and double trade and investment between South Africa and India and positively contribute to industrialisation and the creation of decent jobs.
This is an edited extract of a speech delivered by Minister of Trade, Industry and Competition Tau, at the launch of the India-South Africa Chamber of Commerce at the Emperors Palace, east of Johannesburg, on Sunday.