Speech by Mr. R. K. Bhatia, High Commissioner of India to South Africa at ‘Doing Business with India’ Conference (Sandton: September 23, 2008) Mr. Iqbal Meer Sharma, Deputy Director General, DTI, Mr. Shekhar Datta, Leader of the Indian business delegation, Mr. N. Kumar, Past President of CII, Mr. Chandrajit Banerjee, Director General of CII, Mr. Navdeep Suri, Consul General of India Friends from South African trade and industry, Ladies and gentlemen, 1. It is my privilege to welcome all participants to this conference. 2. At the outset, I wish to convey our grateful appreciation to our Department of Industrial Policy and Promotion as well as CII in helping the Consulate General of India in Johannesburg and the High Commission of India to South Africa, in putting together such a large and diverse group of business leaders from our two countries. I also wish to compliment our South African partners for the conference - Edward Nathan Sonnenbergs, First Rand Bank, PriceWaterhouseCoopers and, of course, the DTI - for the commitment and support that they have extended to this conference. I should also thank our media partners, namely Business Day and CNBC Africa, for the significant role played by them in generating public awareness about this conference. 3. This conference takes place in the backdrop of momentous developments in the international financial sector as well as exceptionally important developments in South Africa. As a business transaction needs not one but at least two parties, this conference is, in reality, as much about doing business with India as about doing business with South Africa. I, therefore, consider it appropriate for us to share with you our considered reflections on the present state of India-South Africa economic relations and their prospects in the foreseeable future. 4. India launched its economic reforms strategy in 1991. During the past seventeen years, Indian economy has been liberalized and integrated with the world economy to a considerable degree. This has made it possible for us to increase our foreign trade, our foreign currency reserves, an inflow of foreign investments and, even more significantly, an outflow abroad of investments by Indian companies. India has achieved and maintained an exceptional rate of GDP growth which, in fact, has been the highest growth rate in the world among all democratic nations. 5. On the other hand, South Africa emerged as a new democratic nation in 1994. During the past fourteen years, it has achieved remarkable economic progress. Its economic growth at annual rate of about 5% since 1999 has been a cause of justifiable satisfaction. Given a diversity of factors – political, historical and economic – , it was no surprise that our two countries worked closely through the 1990s to re-discover each other, embarking on the path of steady expansion of economic relations. 6. In this backdrop, our bilateral trade, which was valued at only $ 1.3 billion in 2000-2001, has increased to $ 4.7. billion in 2006-2007. It is a growth 261% in six years. This may seem to be a satisfactory growth, but, on the other hand, it may not really be so, especially if we take into account the growth in trade of India and South Africa with some of their other trading partners. It may also not appear to be fully satisfactory if we look at the current figures in relation to the targets set by our political leaders i.e. $ 10 billion for bilateral trade by 2010 and $ 15 billion for intra-IBSA trade, also by 2010. 7. A highly promising feature of the bilateral economic relationship is the steady growth in two-way investment flows. These are estimated informally to be in the range of $ 2.5 to 3 billion today. In fact, the basic thrust of this conference could be on studying in depth the investment climate, the factors that encourage the two-way flows and an identification of the existing constraints, which if removed, would see a much bigger progress in this area. 8. I recall that, while reporting on deliberations in the IBSA Business Forum, its designated representative had conveyed to our political leaders at their Summit meeting in Pretoria on October 15, 2007, that curbs on the movement of goods, services, investments and business people should be lifted. 9. We are happy to note that progress is being made on the above score. India-SACU negotiations have been launched, but perhaps they need to be put on a fast track. South Africa has been aware of our interest in an early conclusion of bilateral investment promotion and protection agreement, but perhaps it needs to move forward quickly in that direction. 10. Happily, due to sustained efforts, the two Governments have recently reached an agreement on liberalizing the civil aviation regime, thereby encouraging their carriers to put in place more flights on the basis of a multi-designation system. The challenge now is for their carriers to move forward into the implementation phase without delay. 11. Again, due to our persistent efforts, South African authorities have shown their goodwill by liberalizing their business visa regime, to a certain extent. This should encourage our business people to visit South Africa more as their business needs grow in future. 12. The most promising aspect of our economic relationship in the past two or three years has been a comprehensive, imaginative and planned promotion of business opportunities available to the business communities of our two countries. In this venture, our Governments as well as India Inc. have worked hand in hand. CII, in particular, has played a sterling role in this regard. The present conference is but a major milestone in our joint promotional endeavours. 13. The questions this conference needs to discuss, apart from the prevailing business climate and conditions in India and South Africa, are many: whether we are, in terms of India-South Africa relations, on the right path; whether our trade and investment targets are achievable within the agreed time frames; and what more we need to do, both at the Government and business levels, in order to lift the economic relationship to a level that justifies fully the much-talked about label of ‘strategic partnership’ between India and South Africa. 14. On behalf of our diplomatic team in the High Commission and the Consulate General, I wish the conference complete success. I also wish to assure all participants that conclusions and recommendations of this conference will receive our fullest attention and consideration.