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India seeks to cement economic ties with SA through manufacturing and technology
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19th October 2007
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The manufacturing and technology industries in both South Africa and India have changed significantly during the past 20 years, spurred by political changes, improved technology, advanced manufacturing methods and trade with other merging markets, says India's Engineering Export Promotion Council (EEPC) executive director R Maitra.

He points out that India has, in recent years, earmarked Africa as a profitable trading partner.

Maitra says that products currently exported from India to South Africa and other African countries include machinery and transport equipment, petroleum products, paper and wood products, textiles, iron and steel products, plastic and linoleum products, rubber manufactured products, agro products, chemicals and pharmaceutical products.

Further, the Indian automotive giant Tata Motors and rival Mahindra & Mahindra have both entered the South African market.

Maitra tells Creamer Media that the EEPC has facilitated the participation of a large contigent of Indian firms at the Manufacturing Technology International exhibition.

“There will be 170 companies exhibiting at the MTI-INDEE exhibition,” confirma Maitra.

“This means that you can expect at least 350 trade facilitators from my country. These exhibitors include cutting tools, automobile parts, industrial machines and construction machinery, tractor parts, pumps and consultancy services.”

India’s focus to secure economic growth into Africa is by way of helping smaller countries to boost and sustain their profitability.

Assistance will come about by exporting skilled manpower and outsourcing graduates from Indian universities.

“We see this as an important investment opportunity, particularly in South Africa where projects like rural electrification and power generation has created an expanding market for experienced engineers,” said Maitra.

“India’s GDP has been hovering around 8% plus since 2003,” Maitra tells Creamer Media.

“It is estimated that it will touch the double digit figure in the next five years. But it’s not only the manufacturing giants from the busy cities of India who have contributed to this economic growth.

Much of this progress is thanks to small to medium businesses scattered throughout the country.

These smaller industries have made a valuable contribution to India’s progress, and African countries should take cognizance of how valuable these industries are in the bigger picture of progress.”

There are 2 672 188 small to medium-sized businesses throughout India, according to data from the Indian Ministry of Small Scale. These manufacture a wide range of products that are used locally and abroad.

Many of these enterprises are small family businesses passed from generation to generation.

Such initiatives guarantee an ongoing supply of engineers because sons are more likely follow the footsteps of their fathers and study engineering.

“India's education system promotes technical education and professionals like doctors and engineers are prized choices for young people in India,” added Maitra.

HISTORICAL TIES

The correlation between Indian and South African trade and industry has an interesting history.

The trade route to India was first prize for the sea-fairing gladiators of the 15th century and South Africa soon became a convenient one-stop-shop.

However, the country’s natural resources were soon shipped away to foreign lands, making them rich and leaving Africa poor. India gained independence in 1947 and South Africa followed suite in 1994 when it became a democratic State.

Today the two countries can identify their struggle for freedom and liberation from past colonial power.

Yet the struggle continues. Economically successful countries are not yet convinced that manufacturing and technology emerging from third world countries is equal in quality to that of first world counterparts.

“Products out of India are first-class quality,” said Maitra. “In fact, many imports to South Africa from Europe may well have come from India in the first place!”

The current fly in the ointment hampering trade between India and South Africa is the red tape.

“Uniform import tax and duties as well as equal opportunities for all foreign trading countries reurgent attention from Government departments,” says resident director for EEPC in South Africa, MK Sharma.

Sharma has been living in South Africa for the past 18 months, promoting opportunities for trade negotiations between India and South Africa.

The MTI-INDEE exhibition partnership with the EEPC is an opportunity for India and South Africa to curb these ‘irritants’, negotiate partnerships and establish forums with government and private enterprise to create trading partnerships between the two countries.

“We’re thinking ‘out-of-the-box’... beyond stereotypes, history, economics and mind-sets,” says Sharma.

Bilateral trade between India and South Africa is fast approaching R6,5-billion, with imports from India at R3,12-billion and exports to India at R3,35 billion. Indian investment in South Africa is estimated at $100-million, according to www.africa-business.com.

India and South Africa are well qualified to join ranks with developing countries to promote manufacturing and technology from third world countries and rally economic support from the rest of the world, Sharma comments.

The Mozambique corridor that runs between Johannesburg and Maputo is seen as the gateway for an Indian Ocean trading opportunity uniting Asia, Africa and other developing nations.

“It’s not in India’s interest to exploit lucrative African markets,” says Sharma.

“The Indo-South African relationship is seen as a trade and investment opportunity and a skills and manpower exchange that can be a win-win for both countries. In this way, we can look forward to economical growth and development on both sides of the Indian Ocean,” says Sharma.

Long-term benefits from this partnership will improve trading between Indian and African shores, Maitra says.

"Paving the way for future development is possible through continued research, resourcing and outsourcing, liaising with government and bringing private enterprise to the table through forums," he concluded.





Edited by: Laura Tyrer
 
 
 
 
 
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