SA and India to reach $10bn trade target early

| Tuesday August 31, 2010 00:00

He added that even though bilateral trade did take a dip in 2009, reaching around $7-billion, all indications were that if trade continued on its current trend for the next three quarters, the $10-billion target could be reached as soon as March 2011.

Speaking at the India Show in Johannesburg, South African President Jacob Zuma said that it was clear that South Africa's relationship with the world's largest democracy was starting to 'bear fruit', especially after his official State visit to India in June. During the visit, over 200 business delegates accompanied Zuma and three different memorandum of understanding towards the strengthening of trade ties were signed.

Also speaking at the event, the Confederation of Indian Industry president Hari Bhartia agreed, saying that India was one of South Africa's top ten investors, and that a further target of $25-billion had been set for bilateral trade by 2015.

'These targets are achievable by establishing coordination on the highest levels of government, but also through the private sector engaging in cross-boarder trading initiatives.' Sharma noted that great opportunity for investment existed in India, especially considering that the energy-hungry country were planning to build infrastructure of around $550-billion over the next five years, and $1,7-trillion over the longer-term.

Currently, trade between the two countries were still unbalanced in South Africa's favour, which could be attributed to the fact that South Africa entered into recession during the global financial crisis, while India continued to report gross domestic growth (GDP) of over 7 percent.

Recently, South Africa's Finance Minister Pravin Gordhan announced South Africa's ambitions of reaching sustainable growth of 7 percent for the next 20 to 30 years.

Trade and Industry Minister Dr Rob Davies told Engineering News Online at the India Show that South Africa might well take a leaf out of India's book in reaching such ambitious growth rates.

'India has shown sustainable growth of over 7 percent for the last couple of years, and it looks like its growth numbers could be tipped to over 9 percent for this financial year. There are definitely some lessons that could be gathered from this.'

He said that similar to India, South Africa's new growth strategy would include the diversification of its economy and investments, and added that several instruments, such as the new Industrial Policy Action Plan had already been put into place to this regard.

'The centre of gravity in the world's economy has shifted, and South Africa is positioning itself to take hold of these new opportunities, and to further south-south trading relations. Our two countries, together with Brazil, are also working on the IBSA agreement, and to establish preferential trading environments between these three countries.'

Further, Davies noted that India and South Africa's customs unions were currently negotiating favourable tariffs and working on other technical barriers and sensitivities to stimulate further trading growth. 'We will be meeting shortly with India to negotiate this further, and hope to conclude these issues as soon as possible.'

Sharma noted that India has identified South Africa as a strategic trading partner, based on the long histories that the two countries have shared and their shared principals as developing countries.

'This century will belong to the continents of Africa, Asia and South America,' he concluded. (Reuters)