Posted: February 23, 2015
The 6th Investment & Trade Initiative to Hyderabad, India
Acting Deputy Director General TISA,
Captains of Industry from India
Business delegation from SA
Business delegation from India
Ladies and Gentleman
I am very pleased to be here in India today a home away from home especially for many South Africans including myself. Thanks to our historical ties and the legacy left behind by Mandela and Gandhi. Since my arrival yesterday I have experienced the dynamism of India and its people and not forgetting the warm hospitality accorded to me.
Ladies and Gentleman
Today, marks the 6th Edition of Investment and Trade Initiative, India programme designed to assist South Africa’s small and medium companies to interact and do business with their Indian counterparts. We are holding seminar on trade and investment opportunities available in South Africa for Indian companies. This Seminar is convened to explore opportunities to increase trade and investment between South Africa and India.
Programme Director, allow me to take this opportunity to thank our partners the Federation of Andhra Pradesh Chamber of Commerce and Industry (FAPCCI) , the Federation of India Chamber of Commerce and Industry (FICCI) for their involvement in organising this event without them it would have not be possible. Your assistance is much appreciated. From here I will visit Kolkata on Wednesday afternoon for similar seminar.
I’m here with a delegation of businesses because we see many more opportunities for trade and cooperation in the city of Hyderabad and State of Telangana which is now under leadership of Sri K Chandrashekar Rao Hon’ble Chief Minister. The new state of Telangana is the hub for IT, Pharmaceutical, mining and renewable energy. South Africa is looking for investment in these sectors.
It is not by accident that we have chosen this city as venue for our ITI 2015. It is amazing city with great potential and vast opportunities it can offer to our companies. Been the capital of the southern Indian state of Telangana, Hyderabad is the largest contributor to the gross domestic product (GDP), tax and other revenues, of state. Amongst others, the City has become global centre of information technology. On my way here I passed the HITEC City a galaxy of IT giants and was very impressed.
Honourable guests, I am happy to see so many representatives of Indian companies here today with an interest in South Africa. This should not be a surprise because South Africa is indeed a better place to do business in the whole continent. Plenty of opportunities await Indian companies in all sectors of our economy. South Africa has distinct advantage and holds immense potential as the only emerging market in the continent and offers easy access to inter-continental trade. You will hear more details about what South Africa has to offer in presentation to be made later in the programme.
Ladies and Gentlemen
This seminar is taking place at time when the world economy is still facing tremendous challenges and is performing under capacity. In 2014 we saw a disappointing Global growth of 2.6%, however, on positive note World Bank has projected global growth of 3% in 2015 and 3.3% in 2016. Therefore, in light of global challenges more trade and investments should be at the top of our agendas because it would contribute to create more jobs and growth when we need it the most.
Recent reports indicates that we are in the era when there are tectonic shifts in the global economy. The emerging economies have become the new centres of economic growth. Our regions are destined to become global economic power centres. BRICS in particular is in forefront of the leading economies of the future. We should therefore take advantage of BRICS membership and do more business with each others
On bilateral front, while our total trade has been growing significantly for the past decade, we have seen India benefiting more than South Africa. I am saying this because South Africa’s export basket is dominated by commodities/raw materials whiles imports from India are dominated by value added products. This type of trading relationship cannot be sustainable in the long run.
According to our statistics total trade grew from R80.9 billion (USD $7.7billion) in 2013 to R90.3 billion at end of 2014. Out of this South Africa exported R40.9 billion (USD $3.9billion) and imported R49.4billion (USD $4.7billion) goods from India during 2014. Products mainly exported were coal, gold, iron and steel, inorganic chemicals and ores. Whiles imported products were mainly of petroleum products, motor vehicles and pharmaceutical products. We are concern about composition of our exports to India and need to address it soon.
On the investment side
I am pleased to see that investment between the two countries is growing though the level is still very low given the size of the Indian market. Between January 2003 and June 2014 a total of 70 FDI projects from India were recorded in South Africa. These projects represents a total capital investment of around R34.5 billion (USD $3.29billion) which is an average investment of R491.97million (USD $46.86) per project. Significance numbers of jobs around 9,184 jobs were created. We are looking to increase this number.
From South Africa’s side, between January 2003 and January 2014 a total of 18 FDI projects to India were recorded. These projects represent a total capital investment of R4 billion (USD380million) which is an average investment of R222.07 million (USD$21 million) per project. During the period, significant number of jobs was also created in India.
Clearly, the figures above indicate that investment is growing between the two countries but a very slow pace. However, there is scope to do more to increase the investments hence we are back again in India because we acknowledge the importance of this market for South Africa. India remains key trading partner for South Africa during this challenging time. Thanks to our excellent political relations.
Captains of industry,
As I indicated earlier, from our statistics, clearly trade between the South Africa and India is not mutually beneficial. In this regard, I am appealing to you to encourage your members to consider importing value added goods from South Africa.
It is for this reason that today I brought a delegation comprising of twenty nine (29) South African companies to India to show case their value added products. These companies are in the following sectors namely:
They are here to do business with Indian companies in various ways, be it selling their products, looking for partners or joint venture for their projects. I wish you all the best for your B2B meetings this afternoon.
The presentation on trade and investment opportunities in South Africa will be made after speeches and hope that Indian businesses can take advantage of.
In conclusion, Ladies and Gentlemen, I wish this Seminar a tremendous success and good luck on B2B meetings. Later tonight I will be hosting a gala dinner and will be looking forward to see you there and listen to feedback on your engagements.
I THANK YOU