South Africa eyes $10 bn in bilateral trade by 2012

India and South Africa may have shared histories but that has not translated into economic opportunity for Indian business. The visit of South African President Zuma may well remove the thaw created after the failure of Bharti-MTN deal over policy issues, reports CNBC-TV18's Sajeet Manghat and Sandeep Shrikanth.

Never before has the visit of a South African President generated so much buzz among the business fraternity. Though India and South Africa have been friends for long, business relations have been few and far between. Corporate South Africa came into prominence after the failure of Bharti-MTN deal. But recent buzz on Reliance Communications-MTN is also generating headlines. South Africa recognises that it needs to change.

Jacob G Zuma, President, South Africa, said, "The manner in which we do business must be changed, must no longer be hesitant. I think you should be bold and must indicate to both the government what the bottlenecks are, if they are, so that we could help to create an enabling environment for business to grow."

With over a dozen Indian companies already based out of South Africa, Indian companies are realising that South Africa could be the window to the African continent.

Ranbaxy, for example, expects revenues of USD 100 million from its South African operations alone this year.

Companies like Ashok Leyland, Cipla, Aurobindo Pharma and the Tata Group, among the first movers, are already reaping benefits.

Ratan Tata, Chairman, Tata Sons, expects India's relationship with South Africa to be transformational. "Through the years, South Africa has been both the victim of exploitative and extractive enterprise. I thought that India and South Africa can have a different and sensitive relationship."

Trade between the two nations stood at USD 4.5 billion while foreign direct investment is negligible.

But that is all set to change. South Africa is more receptive today to the growing needs of Indian businesses in auto and auto components, pharmaceuticals, mining and energy resources.

"I challenge Indian and South African business to work towards raising bilateral trade to USD 10 billion by 2012," Zuma said.

India and South Africa are in the process of negotiating a preferential trade agreement to strengthen bilateral trade.

JM Financial eyes African market:
JM Financial is eyeing opportunities in the African continent. It has signed a memorandum of understanding with South Africa's Rand Merchant Bank for strategic co-operation to provide cross-border M&A advisory services to Indian and African corporates.

Commenting on the same, Nimesh Kampani, Chairman, JM Financial, said, "They have expertise in the public private partnership segment and we can give them support in infrastructure financing. This relationship will also look at advisories, M&As, and other opportunities in the India-South Africa corridor."