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The official line - India

Business Day (Johannesburg) | 4 June 2007

The Official Line - India

By Marja Tuit

INDIA was the first country to sever trade relations with the apartheid government in 1946, imposing complete diplomatic, commercial, cultural and sports sanctions against SA. Marja Tuit spoke to India’s newly appointed high commissioner, career diplomat Rajiv Kumar Bhatia, who, in his diverse 35-year diplomatic career, has been stationed in nine countries across four continents.

A number of bilateral agreements have been concluded between our two countries. Are there others in the pipeline?

In the last decade or so we have signed about 35 bilateral agreements, which is a clear indicator of the tremendous progress which has taken place in India-SA relations. We are doubling our efforts to speed up the implementation of these agreements and we also continue to look at new sectors and fields for more agreements. We are looking at concluding an avoidance of double taxation agreement and bilateral investment protection agreement, and also at other areas when the joint ministerial commission meets later in the year.

India and SA are important to each other and we are determined to sustain the relationship, which is not only multidimensional but also mutually beneficial. We have a relationship with deep roots in history, since from 1860 onwards a sizeable number of Indians was brought here. The Gandhi legacy is obviously also important, as is India’s pivotal role in helping SA in its struggle against apartheid and colonialism. Now, of course, it is complementary perceptions, views and interests that are driving the two countries closer together.

Commercial relations have flourished since the re-establishment of diplomatic relations in 1993. From virtually nothing, bilateral trade has increased to more than $4bn. Where to from here?

The target is to increase this figure to at least $12bn over the next three years. It is a simple and ambitious target set by President Thabo Mbeki and Prime Minister Manmohan Singh when they met in SA last October. We are quite optimistic, given the positive trends and promotions we are doing, that this target will be achieved. But more important is the two-way flow of investments in this economic relationship.

Which sectors have the most scope for improvement?

This year we are focusing our attention on four or five sectors that offer immense opportunity — textiles, information technology, infrastructure, engineering and small and medium enterprises. With this I mean both trade and investment because we strongly believe that the India-SA relationship is not just about buying and selling, but also about longer-term collaboration involving capital, technology and services. This is why Indian investment in SA is estimated to be about $1bn, while SA’s investment in India is also progressing very well.

What else is India doing to promote trade?

The role of a mission, an embassy or a high commission is to promote connectivity between the two countries. We want to enhance awareness in SA about the business potential and opportunities in India and are therefore engaged in informing people here. And we are promoting the idea that there should be better civil aviation links between India and SA, because we are really quite close in terms of our geography. The flights are still not as many as there should be. We are, for instance, hopeful that Air India will start flying here soon. The third aspect of connectivity is that we want to facilitate the easy movement of people between our two countries. In fact, our high commission and its offices have now adopted a system in which we try to give visas to applicants on the same day . We are hoping that the South African side will reciprocate.

Indian investments in SA have grown in quantity as well as diversity. What other major Indian players are planning to invest in SA?

Aside from Tata there are a number of very prestigious Indian companies that now operate here, such as Mahindra in the transport business, Ranbaxy — a premier pharmaceutical company — and of course the Indian-related Mittal group.

There has been less investment in the opposite direction, but is that set to change?

Energy conglomerate Sasol is actively exploring the possibility of investing in the coal sector, so that they can produce liquid fuel out of it. They are in dialogue with us, as are SAB Miller and the Airports Company of SA, among others. India is very keen to collaborate in three other sectors: mining, railways and energy pipelines.

Information technology (IT) has emerged as a significant area of Indian interest. How do your foresee this expanding?

India is a world leader in the IT field and senior people in SA have told us that more Indian IT companies should come here. In fact, India was a partner country in the major Futurex exhibition which was held in Johannesburg last month and which saw some 30-40 companies from India exhibiting.

India and SA are presently negotiating a preferential trade agreement. How is this progressing?

The matter is receiving active consideration by both governments. We are committed to negotiating such an agreement, leading to a free trade agreement between India and the Southern African Customs Union. To carry this process forward we hope to have a senior dignitary from the Indian government visiting SA in the near future.

In 2003 SA adopted the New Delhi Agenda for Co-operation, a south-south trilateral co-operation agreement between India, Brazil and SA (Ibsa) which sees the three nations sharing opportunities, experiences and achievements. Has this been achieved?

Ibsa is an institution of immense importance. It is only four years old but showing great progress. I believe this year will be a very important milestone because India will host the next ministerial meeting in July. Thereafter it is hoped to hold a summit-level meeting in SA. So you can see that the endeavours are there at the highest levels to lend substance and dynamism to this agreement.

Although two-way tourism has shown an upward trend, it is still way below potential. How can this issue be addressed?

More tourism needs more promotion, more flights and faster delivery of visas. We are proud of our same- day service because not every embassy is able to do so. We have a local office of India’s tourism department which organises various promotions, but we need to do more and, if I may say so, this also applies to SA. Tourism flow at the moment from both sides is only about 80000 people (40000 from India and 40000 from SA), and this is really a very small figure.

Will any more Bollywood movies be made in SA?

We recognise the importance of both cricket and Bollywood films as important links between our two countries. With regard to making more films here, this is essentially something we leave to the private sector — governments have a very limited role in this — but there is no doubt that when Indian films are shot, tourism from India tends to increase tremendously.