South Africa holds a great opportunity for investment by the Indian services sector despite a few challenges, including long waiting time for visas, lack of direct flights, Consul General Mahesh Kumar said here during a seminar on Thursday.
The seminar organised by the Services Export Council (SEPC) was the first in South Africa and the fourth in recent weeks by the SEPC to cover all the regions of the African continent.
It had earlier been to Egypt in North Africa, Ivory Coast in West Africa and Kenya in East Africa.
It has been a good beginning to understand the South African and African market in the quest to develop long-term commercial relationships, SEPC director General Abhay Sinha told PTI.
South Africa is a very different place compared to other African countries, Kumar advised the delegation of medium and small entrepreneurs who spent the day interacting with local businesses from across several South African provinces.
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The technology and finance sectors here are very developed, the workforce is technically very strong, and they have good English language skills.
It is also important to remember and support local conditions. One such local condition that is very important for Indian businesses to support is the South African government's policy on Black Economic Empowerment. It is an affirmative action policy under which businesses are required to do more business with the Black locals. This is something that we should be open to fully support and fully implement, the diplomat said.
Kumar conceded that there were a few issues that needed addressing to fast-track Indian business investment in South Africa, which he said were being addressed.
Visas have become a problem, so when you make your business calculations, you will probably have to factor into account that the waiting time has become longer, and it is affecting a lot of businesses.
Another factor was the lack of direct flights between South Africa and India, which Kumar said was being addressed at the highest level.
South African businesses are very well integrated with global value chains, but there is another challenge that we have. There is a unique preference for the West, which is quite visible. Close to 60 per cent of their services trade is happening with Europe and North America.
We should also keep in mind that the benchmarks here are very high and mostly aligned with the West, so if we can do business with the West, it's easy for us to do businesses with South Africa also.
Kumar said despite these challenges, Indian businesses have done very well in South Africa since relations were resumed in the 1990s after almost four decades of a total embargo by India as it led the international fight against apartheid.
So while there are these challenges, we should also appreciate the bigger markets that are opening for us, he said.
Indian businesses here have a multi-dimensional approach with a long-term vision of growing in South Africa as per the local conditions. Indian investment in diverse sectors of the South African economy has created thousands of local jobs, wealth and opportunities for local businesses. Our approach is very different from some others who are focused on short-term profits only, he added.
Kumar highlighted that the South African government places a high emphasis on education, spending about five per cent of its GDP on this sector.
Of that, 21 per cent goes into the higher education sector. Your focus on seeking joint opportunities and programmes, student exchange and research collaborations are all good opportunities because the quality of higher education in South Africa is very good, Kumar said.
But he also called on the delegation to consider assisting public schools in South Africa, where the quality of education still faced challenges.
A large percentage of these students do not pursue higher education for a variety of reasons, with STEM (Science, Technology, Engineering and Mathematics) subjects being a particular challenge. India's strength in this area is very well recognised, so this presents excellent opportunities for edutech companies or digital campuses, which we should explore, Kumar said.
He also addressed the skills gap in South Africa.
The government of India is going to establish 30 Skills India International Centres for our professionals who are trained in India, to go and provide services overseas. This is an area where we can explore linkages with South African youth as well, to upskill and reskill them as required. I believe the public and the private sector would be willing to partner with us in this space, Kumar said.
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