Johannesburg, Mar 12 (IANS) The South African government, through its ministry of Trade and Industries, is determined to provide every assistance it can to help Indian companies that want to invest in South Africa.
This emerged quite clearly at a seminar organised jointly by the Ministry and the Indian Consul-General here as a number of representatives from both countries outlined the support they could provide to investors, ranging from tax incentives to assistance in
securing work permits for specialised staff.
“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) told about 150 delegates.
“India is one of the most important sources of global demand. We feel that the SA economy and economic activism in this economy are well-positioned to service this segment and meet a portion of that demand.
“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. Part of that has been to do with the mindset of the South African industries.
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 that 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 multi-nationals. 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, Confederation of Indian Industry (CII) head in the South African office, confirmed that South African companies could have 100 per cent ownership in India, citing the example of software giant Microsoft, which had made huge investments
Rajamani 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 per cent 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 also strongly encourage investors to also train local South Africans for those jobs as well.”
Meer added: “On the recent state visit to India, President Mbeki highlighted the extreme capacity in India, in ICT, in engineering and similar themes. 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.”