Pretoria - A South African delegation, led by President Jacob Zuma, on a state visit to India this week must look into the "vast untapped" potential for trade between the two countries, an economist advises.
Dawie Roodt, an economist with the Efficient Group, told BuaNews that India, which has a market of 1.1 billion people, had a "phenomenal growth story" which local business should take advantage of.
He referred to the announcement by the Indian government of an $800bn investment in infrastructure in the next five years, saying it was one of the openings for South African firms to partake in.
"South Africa is increasingly recognised as an attractive destination for trade and investment on the basis of our unique strengths and financial stability. This visit must confirm our position and also inform Indian audiences about opportunities for travel and tourism, among others, that are available" said Roodt.
India and South Africa are set to invigorate bilateral ties and discuss UN reforms during the tstate visit which starts on Wednesday. It is Zuma's first trip to India since taking office.
Zuma will meet his counterpart Manmohan Singh who he last met in Brasilia for the India-Brazil-South Africa (IBSA) summit in April. The two leaders will explore a raft of business opportunities and the strong business delegation that is accompanying Zuma is testimony to this.
According to Zuma's office, the visit will strengthen and broaden economic and commercial interaction between the two countries.
"It would also expand South-South interaction to strengthen the voice of the developing world and its capacity to address the needs of its people, and to demonstrate appreciation for the importance South Africa attached to its political, economic and cultural relationship with India," the Presidency said.
Leading South African companies such as SABMiller, FirstRand, Old Mutual, Sanlam and Hollard are already expanding their footprint in India, while Indian firms such as Tata, Reliance, Mahindra & Mahindra, Kirloskar, Ranbaxy Laboratories and Dr Reddy's Pharmaceuticals are also taking advantage of the huge domestic market to leverage for the global competitive advantage South Africa has.
Roodt explained that the visit would further cement IBSA which he referred to as "champion of South-South cooperation" where its members have developed fascinating programmes.
The most frequently cited programmes at the IBSA Summit and its forums were Brazil's programme of family subsidies (Bolsa Familia), assisting 11 million poor families, India's Rural Employment Guarantee scheme which benefited 34 million people in 2009, and South African programmes of employment in public works and social services.
Roodt believes if these three power economies can further solidify their relations - a lot more can be achieved.
Already bilateral trade between India and South Africa has multiplied manifold over the last decade, from $1.3 billion in 2000-01 to $6.27 billion in 2007-08, a growth of 382 percent.
In February 2006, Airports Company South Africa (Acsa) won the contract for upgrading the Mumbai airport, and Sasol has made significant progress in investing in a coal-to-fuel project in the state of Orissa.
Despite these sizeable investments, Roodt says corporate South Africa has not fully leveraged the strong cultural and political relationships to take advantage of the phenomenal growth story that is India.
"Bilateral trade between South Africa and India has continued to grow since the establishment of diplomatic relations ... but there is still vast untapped potential, and many opportunities exist for expanding this commercial relationship."
Besides focusing on expanding economic cooperation across different areas, Zuma and Singh will also discuss a range of issues like the United Nations reforms and World Trade Organisations trade negotiations - which they share common interests in.
Three agreements were expected to be signed - namely, a memorandum of understanding in agricultural co-operation, an amended bilateral air services agreement, and a memorandum on mutual co-operation between South Africa's diplomatic academy and the foreign service institute of the Indian external affairs ministry.
