South African government tries to woo Indian investors

Monday, 15 March 2004, 20:30 IST
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JOHANNESBURG: India is a "very important, strategic" region in terms of trade and South Africa is determined to provide all assistance to investors from the country, said a key trade official here. "India is a very important and strategic country in terms of South Africa's trade policy agenda," said Iqbal Meer, chief director of bilateral relations of the South African Department of Trade and Industries (DTI). Meer was speaking at a seminar here organised jointly by the ministry of trade and industries and the Indian consulate general. A number of representatives from both countries at the event outlined the support they could provide to investors, ranging from tax incentives to assistance in securing work permits for specialised staff. "India is one of the most important sources of global demand. We feel that the South African economy and economic activism in this economy are well-positioned to service this segment and meet a portion of that demand," Meer said. "The strategic relationship with India has been there for a long time in the political and cultural fields, but the economic component of the relationship still needs a lot of work. South African exporters traditionally have viewed Europe as a market. There has been significant integration more recently into the US and North American markets." Meer said there was not enough awareness of the huge potential that India held. "We believe industry (in South Africa) has a lack of awareness of the phenomenal opportunities that exist in India and needs to be made aware of that." Meer said the seminar was the first of a series of events and there would be more as the DTI moved towards informing colleagues in southern Africa of the opportunities that lie in India. "India has the world's largest middle class. It is a country characterised at the moment by high consumer spending and South Africa is well positioned to supply all those consumer goods." Another official said: "We are hoping this year to step up our preparations for launching negotiations with India and indeed I believe that in the second half of this year we will be launching free trade negotiations with India." Asked about the incentives, Meer said they were available to small enterprises and large corporations. "They are intended to level the playing fields and give entrepreneurs a jump start. This is for micro enterprises right up to multinationals. "The multinationals have taken advantage of the motor development industry, for example. It's been one of our most successful programmes. There are lots of policies in place - all it takes is for you to make the call to the DTI and you will be on a sound footing as you embark on international trade." Rajamani Krishnamurthi, the Confederation of Indian Industry (CII) head in South Africa, confirmed that South African firms could have 100 percent ownership in India, citing the example of Microsoft, which had made huge investments there. Krishnamurthi also allayed fears among South African businessmen that language could be a barrier, as had been experienced in some Eastern countries by them. "Yes, regional languages are found in all the states, but English is spoken in all of them and is taught in schools at all levels. A large pool of English speakers is available so it's no problem." Andre van Wyk, an importer of capital goods, mainly machinery, made a plea for the South African government to withhold value added tax of 14 percent on machinery items worth a million rands each imported from India until they had actually been sold to customers in South Africa, rather than taxing imports as soon as they landed. He said this made a huge impact on their cash flow. In response to a query whether Indian companies would get assistance from DTI to bring in staff, a representative said: "If you come through DTI that is one of the first things we counsel people on. We actually have inside the DTI personnel seconded from the Department of Home Affairs to counsel investors on the permitting process, whether it is key personnel or particular skilled personnel. "We would of course strongly encourage investors to also train local South Africans for those jobs as well." Meer added: "We need to facilitate people to come over, work here, and also impart some of their skills. So while some people talk about brain drain, here's an opportunity for brain gain. "Engineers from India and China even are being turned away because of the tighter immigration laws in markets like the US, so there's a pool of talent that companies in South Africa can tap into."
Source: IANS
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