Minister Dlamini Zuma to host Indian Foreign Minister for the SA – India Joint Ministerial Commission

Pretoria – South African Foreign Minister Dr Nkosazana Dlamini Zuma will, on Thursday-Friday 21-22 February host Indian Foreign Minister Pranab Mukherjee for the joint SA-India Joint Ministerial Commission meeting scheduled for the Presidential Guesthouse in Pretoria.

Minister Dlamini Zuma will co-chair the South Africa – India JMC within the context of South Africa’s priority to consolidate strategic bilateral political, economic and trade relations with India with a view to strengthening South-South co-operation.

In this regard, India and South Africa are together with Brazil members of the historic and strategic coalition of countries of the South known as the India-Brazil-South Africa (IBSA) Forum.  These countries represent the largest economies on their continents.

In addition, South Africa and India have strong and growing bilateral relations under the aegis of the Joint Ministerial Commission (JMC) in the political, communications, economic, education, defence, health, science and technology, housing, arts, culture, agricultural spheres.

The sheer size of the Indian economy (14th largest manufacturing economy in the world) gives it an influential position in the global market in which South Africa has a key interest. 

Since South Africa and India have similar developmental challenges, their collective capacity in bargaining and voicing concerns that affect their economies in international forums is made highly effective.  As a key emerging regional economy, India provides a platform for the re-integration of the South African economy with that of South Asia.

This session of the South Africa – India JMC will review the state of relations between India and South Africa covering a wide spectrum of interests ranging from political, economic and social issues to human resource development and skill development within the context of ASGISA and JIPSA programmes.

Minister Mukherjee will also, while in South Africa, pay courtesy calls on President Thabo Mbeki and Deputy President Phumzile Mlambo-Ngcuka in Cape Town on Thursday 21 February. The Joint Ministerial Committee will begin its deliberations on Thursday evening in Pretoria.

Minister Mukherjee will depart from South Africa on Friday 22 February 2008.

Bilateral Economic Relations

The main Indian products exported to South Africa are: motor-cars and vehicles for the transport of goods, rice, medicaments, cotton, yarn, finished leather goods, machinery and instruments, handmade yarn fabrics, spices, handicrafts and handmade carpets.

Main products imported from South Africa are chemicals, gold, silver, coal and briquettes, iron and steel, inorganic and organic fertiliser, pulp and waste paper, and precious and semi-precious stones.

Trade Figures (ZAR million)

Obtained from the website of the Department of Trade and Industry www.thedti.gov.za

Opportunities for closer co-operation in the following sectors have been identified and form part of South Africa’s trade development agenda in India:

Capital equipment (construction and related infrastructure): SA Airports companies made a successful bid for the upgrading of the Mumbai Airport.  During the President’s visit to India, former Minister of External Affairs, Mr. Yashwant Singh expressed India’s interest on receiving assistance in areas of electricity/power generation as well as mining technology.

Agro-processed products: SA firms wish to share expertise in food processing with India.

Autos and components: TATA Motors has established a presence in South Africa and Mahindra Motors has commenced exporting vehicles to South Africa.

Services: Engineering and financial services are increasingly attracting attention.

ICT: India’s information communication technology prowess (software development) has attracted attention and South Africa has begun to engage relevant firms. Tie-ups and memoranda of understanding have been signed between the two nations.  South Africa views India’s technical pool in ICT as holding promise for future co-operation between the two countries. Co-operation in space technology offers further opportunities.

Science and Technology: India’s technical manpower pool has been noted as providing impetus for closer co-operation with South Africa, especially in software development.  Other areas of assistance are Biopharma and Biotechnology as noted by the President during the visit to the Center for Cellular and Molecular Biology (CCMB) in Hyderabad in October 2003.

Health: South Africa would like to learn more about the traditional knowledge system development (institutionalising traditional knowledge in medicines)

SMME: Co-operation in SMME development, jewellery and between the two countries’ CSIRs is ongoing.

Investment:

Indian investments in South Africa have grown in quantity as well as diversity.  Investors include Tata (vehicles, IT, investment in ferro-chrome); Mahindras (utility vehicles); and a number of pharmaceutical companies, including Ranbaxy, CIPLA, etc.  In 2004, Coromandal of India acquired 2.5% stake in Poskor; the Tata Group has 26% participation in the Second National Operator in the telecom sector approved by government in 2005.  Their ferro-chrome plant in Richards Bay has received the go-ahead and they are also interested in moving into power generation and mining in due course.  A JV is reported to have been set up between Adlab Films, India and Pan African Strategic Investments to produce films, bringing an estimated R 50 million of investment to South Africa.  In January 2006, Apollo Tyres acquired Dunlop SA in a R500 million deal; and Indro Power Supply announced its plans to list on the JSE and to build a terminal to ship coal and iron-ore to India and China.  In July 2006, Godrej Consumer Products Ltd signed an agreement to acquire the Rapidol, which had turnover of R 52 million in 2005.  Ashok Leyland plans to invest R 50 million in a motor assembly plant in KwaZulu-Natal.  The UB Group of India also has a limited investment in the hotel business.

South African investments in India are growing.  SABreweries has acquired a majority interest in Mysore Breweries (US$ 17.5 million); Shoprite has established an outlet in Mumbai;

In February 2006, ACSA won the contract for upgrading the Mumbai Airport; SASOL is keen to invest in a coal-to-fuel project in India; and several South African pharmaceutical companies have signed JV and other agreements with Indian counterparts.

Co-operation under the umbrella of AsgiSA and JIPSA

Significant prominence needs to be given to human resources and skills development programmes within the broader objectives of AsgiSA and JIPSA that are becoming features of bilateral engagement and India has become one of the biggest contributors towards AsgiSA and JIPSA.  There are three distinct categories of AsgiSA/JIPSA-related programmes:

• Government-sponsored Programmes

This programme focuses mostly on the 100 ITEC (Indian Technical and Cooperation) slots that are made available to South African public servants through the Indian Ministry of External Affairs.

• Programmes driven by Institutions

These programmes have the potential of being the most significant contributions towards skills development in South Africa because of the size and extent of projects.  These projects are driven by the Confederation of Indian Industries (CII) in co-operation with BUSA.  The focus is on developing skills of artisans (electricians, plumbers, bricklayers, etc); and the objective is to provide training to large numbers of South African apprentices, in order to address the skills-deficit at the operational level in these trades.

• Private Sector Initiatives

Major Indian corporate companies (like TATA, Sahara, Satyam, etc) are training young, unemployed South African graduates in the fields of tourism and ICT.  These programmes last for an average of 3-4 months and involve “on-the-job training” at major centres in India.  These same companies’ forays into the SA economy, makes these opportunities they provide a case of enlightened self-interest on their part rather than pure altruism.

Media Programme for South Africa – India Joint Ministerial Commission (JMC), Thursday 21 – Friday 22 February 2008

Issued by Ronnie Mamoepa on 082 990 4853

Issued by Department of Foreign Affairs
Private Bag X152
Pretoria
0001

20 February 2008