Financial Daily from THE HINDU group of publications
Tuesday, Apr 09, 2002
Industry & Economy
`Bright prospect to expand trade ties with S. Africa'
CHENNAI, April 8
THE increasing share of bilateral trade to the total world trade presents an opportunity for India to increase its trade with South Africa, according to Mr A. Vellayan, Chairman, Federation of Indian Chambers of Commerce and Industry - Southern Region.
Addressing an interactive investment opportunities forum with a visiting South African trade delegation here today, he said that bilateral trade was becoming the order of the day. India's trade with South Africa had increased to $1.5 billion in 2001-01 and could cross the $2-billion mark shortly.
Almost 60 per cent of world trade was bilateral in nature, he said.
Considering the availability of raw materials and power and its gold reserves, South Africa was an undervalued country, he said. The Murugappa group, to which he belongs, had a few joint ventures, imported raw materials and also exported sanitaryware to South Africa. From Richard's Bay in South Africa, moving raw materials to any port on the East coast of India was quicker and cheaper rather than importing from West Asia, he said.
The Murugappa group imports phosphoric acid for its fertiliser plant in Andhra Pradesh and exports sanitaryware - mainly in the middle and premium segments - to South Africa.
Apart from being a springboard for Indian companies for the African market, another advantage of increasing trade with South Africa was the country's preferential trade agreement with the European Union, he said.
Mr Allister Schorn, Consul - Economic Affairs, South African Consulate-General, pointed out that India and South Africa were moving towards closer economic co-operation. An example of this was the free trade agreement that would be negotiated between the two countries over the next few years.
At the session, delegates from the South African team highlighted the country's advantage, especially in power intensive industries such as chemicals, petrochemicals, metals and mining. The low cost of power was an added advantage.
Mr Sagie Reddy, New Business Development Manager, Eskom, South Africa's national electricity utility, pointed out that the cost of electricity in South Africa was almost five times lower than the average cost in India.
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