Why India-South Africa Bond Matters

by Christopher Edyegu - 20 November, 2020, 12:00 2023 Views 0 Comment

In 2020, South African Indians will be celebrating 160 years of transitioning from bondage to freedom. That is a very important milestone in the history of both South Africa and India. It is also important to keep in mind that India and South Africa are seen as natural allies. That is exemplified through “their independent struggles from colonialism and the anti-apartheid liberation respectively, the pursuit of non-alignment, and the battle for a reformed, just, equitable, and inclusive global system that consolidates South-South Cooperation and reflects the current structures of political and economic power”. Their common interests and actions of solidarity make both countries strategic normative actors in the 21st century, notwithstanding the historical lines of complementary. Both India and South Africa have iconic human rights and social justice giants in the form of Mahatma Gandhi and Nelson Mandela, who became South Africa’s symbol of political transition from apartheid to democracy.

In addition to the above features, and after 1994, bilateral relations between both nations were strengthened. That is reflected in the formation of the Joint Ministerial Commission (JMC) with the objective of forging mutual and beneficial cooperation in the areas of “politics, trade and investment; communications and information technology; minerals and energy; arts, culture, sports and recreation; human resource development; and consular and immigration matters.” Furthermore, at the 2015 9th JMC meeting, it was upgraded to deal with several priority areas which include, “defence, deep mining, science and technology, agriculture and food processing, and insurance.” These areas of collaboration show that India and South Africa have deep ties, and it is, therefore, important to understand why those bilateral bonds matter. There are several reasons, but this article will focus on historical and cultural reasons, economic reasons and global leadership ambitions.

First, India-South Africa bonds matter because of historical and cultural reasons. Both countries share deep cultural ties due to the presence of a vibrant Indian community in South Africa. The first Indians arrived in South Africa as slaves during the Dutch colonial era in 1684. A conservative calculation shows that over 16,300 slaves from the Indian subcontinent had been brought to the Cape province in South Africa. Furthermore, Indian slaves comprised the majority of slaves brought into South Africa from the far East.

Additionally, in the second half of the 19th century, Indians came to South Africa in two distinct categories – as indentured workers in the 1860s and later as ‘free’ Indians. Indentured workers came into South Africa as a result of a triangular pact among three governments which stated that indentured Indians had to work on Natal’s sugar plantations for the Natal colonial government. Those in the free Indians category, came to South Africa at their own expense from India, Mauritius and other locations. However, that type of emigration was stopped in 1914. Between November 1860 and 1911 – when the system of indentured labour was eliminated – nearly 152,184 indentured workers arrived in Natal from across India. Once they had served their indentures, this first category of Indians were allowed to remain in South Africa or to return to India. By 1910, almost 26.85% of indentured men returned to India, but most chose to remain in South African and thereby constituted the forbearers of the majority of present-day South African Indians.

Today, South Africa’s diverse Indian population of over 1 million is predominantly concentrated in Durban, Kwa Zulu Natal’s largest city – and that is the most substantial Indian population in Sub Saharan Africa. South Africa Indians still retain a sense of cultural and social connection to India, and Indian influences have contributed immensely to South Africa’s multicultural diversity.

Second, India-South Africa bonds matter because of economic reasons. They are major trade partners and have traded significantly between each other in the past two decades. India-South Africa trade is valued at over $9 billion, and India is also the fourth-largest importing partner and fifth-largest export destination for South Africa in 2017-18. South Africa is also India’s largest trading partner after Nigeria, and sometimes the trade balance has been in South Africa’s favour. On the other hand, India’s exports to South Africa has increased threefold from $984 million in 2004-05 to $3.546 billion in 2017-18. In 2017, India’s investment in South Africa was $9.4 billion. In 2017, Indian imports to South Africa also increased dramatically from $292 million in 2004-05 to $5.834 billion in 2017-18.

Indian businesses also have a large presence in South Africa with investments of at least $8-9 billion. Indian businesses in South Africa are engaged in pharmaceuticals, banking, automobiles, mining and other sectors. In addition, Indian businesses in South Africa established a platform called the India Business Forum which represents over 90 members  and the High Commissioner of India is the Chief Patron of the forum. Some of the leading Indian firms operating in South Africa include, “TATAs, Sun Pharma, Dr. Reddys, Mahindra & Mahindra, L&T, Jindal, Vedanta, TCS, WIPRO, Infosys, Tech Mahindra, HCL, Zensar, Nihilent, State Bank of India, ICICI Bank, Bank of Baroda, EXIM Bank, Bank of India, Canara Bank among others.”

Several South African firms have also invested in India. These include “SANLAM Insurance, Life Healthcare, Momentum Health Insurance, Airport Company of South Africa, First Rand Bank, Old Mutual, SAB Miller Brewery, NASPERS, Smollan and several others”. But despite these significant bilateral trade relations, there is substantial potential for trade growth between India and South Africa.

Third, India-South Africa bonds matter because of their identities as emerging middle powers. With regard to multilateralism, India and South Africa share a mutual basis of cooperation.  South Africa is particularly interested in fostering cooperation in multilateral institutions such as the G20, World Trade Organization (WTO) or the broader United Nations system.  Furthermore, India and South Africa’s membership of BRICS and IBSA adds and provides the impetus for their identities as emerging middle powers. Their statuses as emerging middle powers could further enhance South Africa-India reputations and possibly propel them in a leadership role in the developing world alongside China, Russia and Brazil.

In conclusion, evidence demonstrates that the engagement between India and South Africa since 1994 shows that both countries are moving beyond mere historical symbolism and are engaged in examining ways to enhance the relationship. But there is definitely potential prospects of strengthening the relationship, particularly from an economic centric focus.

Christopher Edyegu
Author is teaching assistant and PhD candidate (international relations) at the University of Cape Town in South Africa. His research focuses on China-Africa relations, particularly China's efforts in facilitating the development of African manufacturing.

Leave a Reply

Your email address will not be published. Required fields are marked *