South Africa and four of its neighbours are keen to seal a preferential trade agreement with India in hopes of spurring trade and turning historical ties into economic opportunities, a top South African trade official said. The Southern African Customs Union trade bloc, comprising Botswana, Lesotho, Swaziland, Namibia and South Africa, hopes tariff barriers can be removed to boost trade, said Iqbal Sharma, chief director of international trade at South Africa's department of trade and industry.
Annual trade between India and South Africa stands at 2.4 billion dollars - only around five percent of South Africa's total trade with other countries despite historical ties between the two countries.
"We are negotiating with India for a preferential trade agreement that will hopefully remove tariff and non-tariff barriers," Sharma told AFP in an interview.
"India was the main supporter of the anti-apartheid movement but the political relationship has to translate into economic opportunities," he said on the sidelines of New Delhi's International Engineering and Technological Fair.
South Africa is a partner country to the fair, which brings manufacturers from various countries together with Indian firms to show off their wares.
Ties between India and South Africa stretch back almost 150 years when in 1860 some 700 migrant workers and traders arrived in Durban from Madras and Calcutta, mainly to work on newly established sugarcane farms in the eastern KwaZulu-Natal province.
Political bonds date to the late 19th century when Mohandas Karamchand Gandhi, later to become known as the father of the Indian nation, spent 20 years in South Africa as a young lawyer fighting the injustices of a racist colonial system.
He later returned to India to spearhead the independence struggle against British colonial rule.
During the apartheid era New Delhi cut all diplomatic and economic ties with South Africa, restoring them only after Nelson Mandela was released and first all-race elections held.
For India, South Africa holds the potential of being the springboard for closer economic and political ties with the sub-Saharan region, which also holds a sizeable number of people of Indian origin.
Sharma said negotiations will start around October and an agreement is expected to be in place before the end of the year or the first quarter of next year.
The average custom tariff rates in India are around 30 percent compared with about three to five percent in South Africa. A preferential trade pact will help to lower the levies for export firms from both countries.
"We have to start off by creating an enabling environment. Initially, we will be looking at trade in goods and in the second phase at trade in services," Sharma said.
The business co-operation will focus on civil engineering, tourism, agro processing, automotive components, chemicals, marine and railways.
Industry events such as trade shows will be kicked off in India to improve the understanding of available business opportunities.
Traditional business with India, he added, has been mostly in raw materials such as iron ore, coal, fertiliser and gold, but the real opportunities for South African exports lay in value added manufacturing such as jewellery and mining equipment.
The three countries have banded together at World Trade Organisation to represent the interests of developing countries from three different continents.
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