Speech by Mr. R.K. Bhatia, High Commissioner of India, at India Business Summit (Durban, March 26, 2009) 1. I am delighted to be amidst you all and to see such a large turn- out here. This event forms an integral part of the 2009 calendar of our business promotion activities stemming from India’s pro-active economic diplomacy in South Africa. This project has been piloted by my colleague, the dynamic Consul General of India, Mr. Harsh Shringla, and his team, but its success is also due to our collaborators who have extended the much-appreciated cooperation. I also wish to thank the dignitaries on the dais whose presence makes the ‘Lunch Power Hour’, to be a weighty component of the Business Summit. 2. Someone might wonder and even ask us if there is justification for such a gathering in the current business climate. The world today is caught in the tentacles of a deepening global economic crisis. Several Western economies are in recession; others are contracting or slowing down; production is being cut; demand is on decline; and job losses are becoming a daily reality. Some of the world-famous corporate players have been getting bail-outs. Hardly a day passes when media organizations do not report on one aspect or another of the economic crisis. Adverse impact of the crisis has already reached Asian and African shores. Both Indian and South African economies have been affected negatively by the crisis, even though perhaps we have not experienced its intensity as much as those in the developed world. 3. Our considered view is that this is the hour for greater, not less, international cooperation. We need to guard against protectionism and an inclination to look inwards. Inclusive internationalism is now needed even more. So are endeavours to deepen and diversify our bilateral cooperation. In fact, they will certainly need to be further intensified if we wish to remain on track to secure the targets, set by our leaders, in respect of our bilateral trade in particular and economic cooperation in general. 4. India-South Africa cooperation is needed, not just for its own sake or for the benefit of a few companies; it is essentially required to help us in fulfilling our mission to contribute to the economic well- being and development of our societies. Clearly, today they need it more than before. 5. Self-perception being an important key to understanding a nation, I should recall the vision of a new India, put forward by our leaders. The vision entails an India that is just, humane and prosperous, and an India that lives in peace. We are rapidly marching forward to regain our rightful place in the comity of nations. India is today viewed with respect as the world’s largest and highly successful democracy and one of the fastest growing economies. It has been heavily engaged in revitalizing and deepening its partnership with Africa. In this backdrop, we are particularly conscious of the important role played by South Africa in African affairs. India-South Africa relations are very close, special and multi-dimensional. 6. Thanks to the success of economic reforms strategy in India and the steady growth experienced by the South African economy, our economic relations have progressed very well. Our bilateral trade, which was valued at only US$ 1.3 billion in 2000-01, has increased to US$ 6.27 billion in 2007-08. It is a growth of 382% in seven years. The question we need to debate is whether trade would now stagnate, go up or down. In these testing times, we would do well to recall that our leaders set the target of US$ 10 billion for bilateral trade by 2010 and US$ 15 billion for intra-IBSA trade, also by 2010. 7. A highly promising feature of the bilateral economic relationship is the notable growth in two-way investment flows. These are estimated informally to be in the range of $ 2.5 to 3 billion today. South African energy company, Sasol, working together with Tata, has just indicated its intention to launch study for CTL project that has the potential to be one of the biggest foreign investments in India. In fact, the basic thrust of this conference should 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. This summit is particularly focused on opportunities and challenges pertaining to five key sectors. They are: Manufacturing and Infrastructure, SMME & Skills Development, ICT & Services, Tourism & Entertainment and Maritime & Logistics. These have been identified carefully after considerable study, research and reflection. We need to promote them imaginatively by creating a special synergy, encompassing governments as well as public and private sector stakeholders. Working together in this manner, I am confident we will be able to achieve our shared goals. 9. Another issue that I feel deserves to be highlighted here relates to recent attempts by developed countries to prevent sale of generic drugs. The big pharmaceutical companies of the West are pushing an agenda which seeks to include generic medicines in the definition of counterfeit drugs. It is unfortunate that some African countries are reportedly seeking to enact legislation, which would ban generic drugs. The Indian pharmaceutical industry is well-established and operates under strict laws and regulations. Indian generics are merely low cost versions of off patent drugs. They are of high quality, completely safe and efficacious. I am sure our friends in South Africa would join us in combating these moves against generic drugs which would not only hurt the public health needs of developing countries but also go against the spirit of a rule-based trading system and represent a distorted use of the international IP system, circumscribing TRIPS flexibilities. 10. 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. 11. 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. 12. Happily, due to sustained efforts, the two Governments have recently reached 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. 13. 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. 14. 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. The present Business Summit is but a major milestone in our joint promotional endeavours. 15. 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. 16. On behalf of our diplomatic team in the High Commission and the Consulate General, I would like to thank our partners, the Durban Investment Promotion Agency and KPMG, as well as our associates, Trade & Investment, KwaZulu-Natal and the Durban Chamber of Commerce & Industry, for joining hands with us in our efforts to further strengthen trade and investment ties between India and South Africa. I also wish to assure all participants that conclusions and recommendations emerging from your deliberations will receive our fullest consideration.