South African Economy
South Africa is the 2 nd largest economy on the African continent with a GDP of USD 350 billion [Nigeria recently overtook SA after rebasing its economy]. It is a diversified economy but heavily dependent on services (63%) and commodities, with industrial activity comprising 29% of GDP. In last three years the growth rate is less than 2%. It grew by 1.5% in 2014 and less than 1% in 2015 and 2016. The slowdown in SA economy remains complicated by falling commodity prices, labour unrest, high unemployment, inequality, high budget deficit, spiralling public debt and contracting exports. Despite a brief recession and bleak predictions for 2017, the South African economy had posted a higher than expected GDP. The South African economy grew by 1.3% in 2017, exceeding National Treasury’s expectation of 1.0% growth.
India-South Africa Trade
India-SA trade in 2017-2018 (Apr’17-Feb’18) was at USD 9.380 billion with Indian Exports at USD 3.546 billion and Indian Imports at USD 5.834 billion. From a continental perspective, 44.7% of South Africa’s total imports, and 32% of South African exports by value in 2017 were from/to Asian countries. India was the 4 th largest importing partner and the 5 th largest export destination for South Africa in 2017-18.
|(Figures in Billion USD)||2013-14||2014-15||2015-16||2016-17||2017-18|
South Africa is still India’s largest trading partner in the Sub-Saharan Africa, after Nigeria. Like past years, the trade balance is still in favour of South Africa. The earlier bilateral trade target of USD 10 billion was revised to USD 15 billion to be reached by 2014. This target was achieved in 2011-12, ahead of schedule. The bilateral trade which dipped in 2013-14 had shown some recovery in 2014-15 up by 5.8%. However, in 2015-16 and 2016-17 the bilateral trade has declined to the lowest level in last 5 years. The Hon’ble Prime Minister during his visit to South Africa from 7-9 July, 2017 while addressing the India-South Africa CEOs’ forum and Business Meting has emphasized on doubling the bilateral trade between India and South Africa in the next five years.
India’s exports to South Africa have seen more than a three-fold increase in the last 10 years: it increased from USD 984 million in 2004-05 to USD 3.546 billion in 2017- 18. Currently India’s investment in South Africa is about USD 9.4 billion.
India’s imports from South Africa have increased dramatically from USD 292 million in 2004-05 to USD 5.834 billion in 2017-18.
There is substantial potential for trade growth between the two countries. As per information available with Department of Trade and Industry of South Africa, South Africa's exports to India amounted to USD 4.2 billion or 4.7% of its overall exports.
Indian Business in South Africa
Indian business has a large presence in South Africa with an investment of over USD 8-9 billion. The main areas of our engagement are pharmaceutical; IT,automobile, banking and mining, but there are still other sectors where our companies are doing brisk business. Indian businesses in South Africa have organised themselves into a platform called the India Business Forum. The Forum presently has 90 members. High Commissioner of India is the Chief Patron of this Forum. Leading Indian companies in South Africa are: TATAs, Sun Pharma, Dr.Reddys, Mahindra & Mahindra, L&T, Jindal, Vedanta, TCS, WIPRO, Infosys, Tech Mahindra, HCL, Zensar, Nihilent, State Bank of India, ICICI Bank, Bank of Baroda, EXIM Bank, Bank of India, Canara Bank among others.
South African business in India
Several South African companies have invested in India. Leading among them are SANLAM [insurance], Life Healthcare [healthcare], Momentum [insurance], Airport Company of South Africa [Mumbai airport], First Rand bank, Old Mutual, SAB Miller [ brewery], NASPERS [ e-commerce] , Smollan [retail ] among others.