India Inc to get a boost with PM's visit to South Africa

India's modest investments in South Africa could soon see some impressive progress, with Prime Minister Manmohan Singh's visit to that country providing corporate leaders an opportunity to take forward economic and commercial relationship.

While Singh's visit to take part in Mahatma Gandhi's Satyagraha centenary celebrations primarily aims to strengthen political ties, the two sides would also discuss the possibility of a preferential trade agreement to increase two-way trade to about $10 billion by 2010 from just $4 billion a year ago.

Simultaneously, a team of top corporate leaders would take forward the economic and commercial relationship of India and South Africa, the continent's largest economy.

The India-South Africa CEOs forum, co-chaired by Tata Group Chief Ratan Tata, would seek to explore specific business opportunities in various sectors of mutual interest.

Besides the Tata Group, which is the largest Indian conglomerate in South Africa with presence in steel, auto, coffee, IT and hospitality, other aspiring Indian multinational companies such as banking powerhouse ICICI, and drug giant Ranbaxy are part of the team.

The promise of greater trade ties between the two regions was also reflected in a World Bank study last month that said India's foreign direct investments in Africa, though presently modest, was growing very rapidly.

Airports Company of SA won the contract for upgrading the Mumbai airport in a joint venture with the GVK Group.

Alternative fuel company Sasol, pioneer in converting coal and gas to diesel, plans to foray into India with an investment of $6 billion, which if materialises could be the single largest FDI in the country. India's commercial engagement in South Africa will have long-term strategic consequences for the

country, say analysts. Indian firms are taking advantage of favourable domestic economic conditions to move into the global economy.

Low labour costs, strong economic growth and the availability of highly skilled labour will all assist Indian firms in their drive for multinational status.

Indian businesses active in Africa are operating on a global scale, working with world-class technologies, producing products and services according to the most demanding standards, and fostering the integration of African businesses into advanced markets, the study said.