Johannesburg, Feb 8 (PTI) South African investors should reconsider the need for Western countries to be the mediators for their businesses in India and invest directly in the country, Consul General Mahesh Kumar told local business leaders at a seminar here Wednesday.
The seminar, titled ‘Doing Business in India’, was jointly hosted by the Consulate and the Johannesburg Chamber of Commerce and Industry (JCCI).
Representatives from Invest SA and Invest India made presentations on the opportunities available in their respective countries.
Kumar said his office was in touch with the banking, equities and financial sectors in South Africa to consider investment in India directly despite their historical preference do so through the West.
“A lot of investment in these sectors (in India) is also coming from the West, so whatever investment is being made by South Africa into the West is also a round trip route to India, so why do you need the West to mediate this India-South Africa relationship?” Kumar told them.
“We can manage our own affairs. Your companies can directly deal with our people,” he said.
Kumar said there had been some success in this regard. “We have managed to convince a big bank which was planning to open an India Fund but that wanted to raise money from London for that fund. But now after talking to us and with the comfort that we have given to them, they are also going to raise the money locally, so they are not going anywhere else. That is a huge vote of confidence in the India-South Africa relationship,” the diplomat said.
Kumar said that as he addressed the business sector at meetings over the past year about India’s progress, they were “very excited” about it.
“The only complaint they would have is that there are not enough opportunities for South Africans to also benefit from those opportunities that are opening up in India. We would like that to change by doing that in partnership with you,” Kumar said as he recalled a newspaper report the same morning which said that there had been a net outflow of investment in South Africa of around $60 billion in the past decade.
“That is not the case with India. India has had a net investment in South Africa during this period. This month alone, I got to speak to four big Indian business houses who are listed, so I cannot reveal their names at this stage, but they are at very advances stages of investment proposals in South Africa.
“A fifth company (Pepsi India bottler Varun Beverages Ltd) has already announced that they are going to acquire for three billion rands a South African beverages company called Bevco,” the diplomat said, adding that South African investment has also gone to India.
“We would like to develop that investment corridor in other sectors, such as manufacturing. The government of India is very keen on developing India as a manufacturing hub, just as South Africa is working in this direction, so we would like South Africa to come and also manufacture in India,” he said.
Kumar said India has a very lucrative incentive structure for the manufacturing sector.
“We on our part have also noted South Africa’s desire to develop it as a manufacturing base. We have been encouraging our businesses to benefit from this opportunity, especially in the auto and auto ancillaries sectors. All our major auto companies are present here in South Africa. Some component-makers have also come here. This a sector which is getting the most attention from the South African government. We would like our auto companies to benefit from this,” he said.
Kumar said besides the government incentives, there are also other benefits that Indian companies could receive through South Africa being part of the American Growth and Opportunity Act (AGOA), the continent-wide Free Trade Agreement which is also becoming a reality.
“That is a very unique advantage because India does not have any such agreements,” he said.
Kumar said South African companies should also consider developing Overseas Development Centres (ODCs) in India.
“Big South African companies in mining, retails, insurance, banking etc. could benefit from opportunities in this regard. They could benefit from our skills, scale and cost to develop and test products in India before marketing them globally or probably even keeping Africa or India in mind,” Kumar suggested.
Bernadette Zeiler, CEO of JCCI, said the benefits that are available to South Africa and India, particularly through the BRICS agreement, were well known as she lauded India for advancing the cause of women.
“I recall travelling to India some time ago and being so impressed about how proactive India was in promoting women in different sectors and we look forward to doing that here,” she said. PTI TIR TIR
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