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South Africa is targeting increased investments from India in the mining and pharmaceutical sectors with various incentives. This, it hopes, will lead to both job creation in Africa's biggest economy and build local technological capabilities.
With the Preferential Trade Agreement between India and the South Africa Customs Union on the negotiating table, such investments from Indian business houses will also be guarded by the Foreign Investment Promotion and Protection Agreement (FIPA).
This has been approved by the South African Cabinet and is now with the Indian Government for comments.
“There is a new incentive in the form of tax allowance for projects above 2-million rand. We want companies to not only come for mining, but also do value addition by setting up a processing centre.
Besides gold and coal, which make up 70 per cent of our exports to India, for other minerals we want to form partnerships so that the benefits can be equally shared,” said the South African Deputy Minister for Trade and Industry, Ms Elizabeth Thabethe.
Ms Thabethe, here in India with a 35-member industry delegation, aims to facilitate several trade and industry agreements that were mooted during the South African President, Mr Jacob Zuma's, visit to India last year.
She added that in the pharmaceutical sector, South Africa is a consumption centre which imports a majority of its medicines from India. However, the country is talking to Indian companies to set up manufacturing centres. Mr Pule I. Malefane, Consul-General, Republic of South Africa, said the two countries have not been able to yet fully exploit the benefits of mutual trade.
“We must seek to remove all barriers that frustrate new entrants. Many small businesses in agro-processing and other sectors are looking for Indian tie-ups. We want to learn from India, the leading country in supporting small enterprises,” he said.
Bilateral trade between the two countries is expected to touch the $15-billion mark in 2011-12, marking a 50 per cent growth over the $10-billion initial target announced during Mr Zuma's India visit.
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