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South Africa can learn a lot from India, its fellow BRICS member which has achieved an average GDP growth rate of eight percent in recent years and is one of the most popular destination for foreign direct investment in the world.
Speaking at the Gordon Institute of Business Science Johannesburg on 2 November 2017, High Commissioner Ruchira Kamboj highlighted the recent jump by 30 spots in Ease of Doing Business in India per the World Bank's recently released report. The business environment in India had improved at the fifth fastest pace in the world and India today was among the top ten “improvers” globally, having done better in 8 out of 10 business parameters. The country had jumped 53 places from 170 to 119 on Ease of Doing Business, leapt over to the fourth rank of protecting minority investors and had moved 15 places from 44 to 29 on Ease of Businesses getting credit. The most significant jump was in taxation policy parameter. Broadly speaking, these changes were historic, being the highest jump by any county in the doing business sector and a vindication of India's reform policies under the leadership of Prime Minister Narendra Modi.
India’s long-term economic prospects were promising due to high savings and investment rates, a young population and integration into the global economy.
India had the potential to become one of the three largest economies in the world in the next 20 years and the third largest consumer economy by 2025. Corporate earnings were expected to increase by twenty percent for the 2017/2018 tax year and the country anticipated a GDP growth of seven and a half percent for 2017-18.
Policy initiatives and measures to promote growth
She highlighted that the Indian government had introduced a number of economic policy initiatives to boost growth and the county’s attractiveness as an investment destination.
Measures included :
• The Make in India initiative to encourage manufacturing activity to boost purchasing power and demand.
• Digital India to provide internet and Wi-Fi access to most of the Indian population and promote start-up businesses. The government offers a three-year tax waiver for start-ups to promote entrepreneurship.
• Invest India incentivises foreign companies to invest in the country. 300 foreign companies are expected to invest a total of $62 billion in 2017.
• The government’s Smart Cities Mission is an urban renewal project with a $9 billion budget to improve the infrastructure of Indian cities.
India and South Africa bilateral trade relations
India is South African’s seventh largest trade partner. Imports from India account for four percent of the total, while imports from China account for approximately twenty percent. This was a large gap when considering the strong cultural and political ties between the two nations.
India had identified tourism, ICT, energy and agri-processing as important industries for the country, all of which South Africa has expertise in.
However, factors such as the lack of direct flights between South Africa and India constrained the development of a deeper trade partnership between the two countries. The Session was unanimous in its recommendation that a consumer market of 1.3 billion people and the most important market in Africa should be connected.
Prominent speakers at the Forum included: Dr. Abdullah Verachia- Director: Center for Leadership & Dialogue; GIBS, Mr. Saki Zamxaka-CEO GGDA, HE Ms. Ruchira Kamboj-High Commissioner of India in Pretoria, Dr. K.J.Srinivasa- Consul General of India in Johannesburg, , Bomkazi Maphoto, Deputy Director, BEE Investments & International Relations;DTI, Mr. Bobby Madhav-Head of Trade & Commodity Finance, FNB Former CEO of FNB India, Ms. Phelisa Nkomo-Strategic Economic Advisor: Office of the MEC, GPGDED and DDG Motlatjo Moholwa-GPGDED.
