South African Economy
South Africa is the biggest economy on the African continent, with a GDP of USD $403.05 billion during CY 2024. Despite being a diversified economy, it is heavily dependent on services (62.75%) with industrial activity comprising 24.46% of GDP. Currently (Q2 2024) the growth rate has been forecast at 1%, and at an average growth rate of only 1.4% from 2024 – 2026. South Africa’s GDP has recovered to its pre-pandemic levels, but the strength of the recovery has been hindered by multiple structural constraints, including ongoing power shortages and logistics bottlenecks. The country has a population of over 64 million, covers 1.22 million square kilometers, and is the world’s largest producer of platinum, vanadium, chromium, and manganese.
Going beyond economic growth, what makes SA a strategic destination for Indian companies is its potential to act as a platform for engagement with Africa at large – especially via companies in Johannesburg, which is seen as the financial capital of the African continent.
India - South Africa Trade
Commercial relations have flourished since the establishment of diplomatic relations in 1993. Business sectors of India interact regularly with their South African counterparts, especially in the sectors of IT, Mining, infrastructure, automobiles, pharmaceuticals, agriculture, heavy machinery etc. There is substantial potential for trade growth between the two countries. Recent bilateral trade figures are as follows:
Figures in million US$
|
Year
|
2019-20
|
2020-21
|
2021-22
|
2022-23
|
2023-24
|
|
India’s Exports
|
4,108.17
|
3934.20
|
6.085
|
8,474.42
|
8,707.53
|
|
India’s Imports
|
6,969.79
|
7570.79
|
10.965
|
10,397.83
|
10,543.30
|
|
Total Trade
|
11,077.96
|
11,504.99
|
17.051
|
18,872.25
|
19,250.83
|
Source: Department of Commerce, Govt. of India
Indian Investment in South Africa
Indian firms have invested approximately US$10 billion in South Africa. There are more than 150 Indian companies operating in South Africa. All major Indian MNCs including TATA, Mahindra, Vedanta, Jindal, Cipla, Ranbaxy (Sun Pharma), TCS, WIPRO, Zensar and TechMahindra operate in South Africa. Indian companies employ about 18 000 South Africans.
Indian Businesses in South Africa
Indian companies have a large presence in South Africa with an overall investment of over USD $ 8-9 billion. The main areas of engagement are pharmaceuticals, IT, automobile, banking, and mining, but there are still other sectors where Indian companies are doing brisk business. Indian businesses in South Africa have organised themselves into a platform called the ‘India Business Forum’. The forum presently has more than 91 members, with High Commissioner of India (Pretoria) as the patron of the Forum. According to their website, the forum has invested more than ZAR 50 billion (INR 230.95 / USD 2.79 billion), with more than 100 committed investors, and with its members employing more than 22,000 South Africans. Leading Indian companies in South Africa are: TATAs, Sun Pharma, Dr.Reddys, Mahindra & Mahindra, L&T, Jindal, Vedanta, TCS, WIPRO, Infosys, Tech Mahindra, HCL, Zensar, Nihilent, State Bank of India, and EXIM Bank, among others.
South African business in India
Several South African companies have invested in India. Leading among them are Naspers (e-Commerce); First Rand Bank (FRB); Sanlam (insurance); Old Mutual Group; Momentum (insurance, JV with Aditya Birla Group) and SAB Miller (major brewery).
