Chapter 1:

Industry
Sector Definition
This involves the extraction of resources directly from the Earth; this includes farming, mining and logging. They do not process the products at all. They send it off to factories to make a profit. This group is involved in the processing products from primary industries. This includes all factoriesthose that refine metals, produce furniture, or pack farm products such as meat. This group is involved in the provision of services. They include teachers, managers and other service providers. Primary

Secondary

Tertiary

South Africa produces one fifth of the entire production of the African continent.
The mining industry still plays a prominent part. However, over the last few years, the country's economic dependency on the export of raw materials, especially on gold, has lessened. The DTIs Industrial Policy Action Plan 2010/11 - 2012/13 or IPAP 2 identifies three sector clusters that are critical to the industrial development of the South African economy, namely:

Cluster 1 - Qualitatively new areas of focus

Realizing the potential of the metals fabrication, capital and transport equipment sectors, particularly arising from large public investments;

'Green' and energy-saving industries; and Agro-processing, linked to food security and food pricing imperatives.

Cluster 2 - Scaled-up and broadened interventions in existing IPAP sectors Automotive products and components, and medium and heavy commercial vehicles; Plastics, pharmaceuticals and chemicals; Clothing, textiles, footwear and leather; Biofuels; Forestry, paper, pulp and furniture; Strengthening of linkages between cultural industries and tourism; and Business process servicing.

Cluster 3 - Sectors with potential for the development of long-term advanced capabilities Nuclear; Advanced materials; and Aerospace.

1. Agriculture Products/ Primary Sector

Agricultural exports have constituted 8% of total exports for the past five years. The agricultural industry contributes around 10% of formal employment contributing around 3.6% of GDP for the nation. Maize (9 million tons are produced every year) is most widely grown, followed by wheat, oats, sugar cane and sunflowers. MAIZE contributes to a 36% majority of the gross value of South Africas field crops. South Africa is among the world's top five exporters of avocados, grapefruit, tangerines, plums, pears, and table grapes and ostrich products. Wine, citrus, sugar, grapes, maize, fruit juice, wool, and deciduous fruit such as apples, pears, peaches and apricots. FIELD CROPS AND HORTICULTURE South Africa is the world's 10th largest producer of sunflower seed. Sugar South Africa is the world's 13th largest sugar producer. An estimated 2.5mt of sugar is produced each season. 50% is exported to Middle East, North America and Asia. Fruit

This industry's export earnings represent about 12% of South Africa's total earnings from agricultural exports. Wine South Africa is the ninth largest wine producer in the world. Vegetables Potatoes make up about 40% of vegetable farmers' gross income, with tomatoes, onions, green mealies and sweet corn contributing about 38%. Tobacco Tobacco cultivation is some 34-million kilograms every year. Tea 100 tons of processed tea is produced per year. LIVESTOCK FARMING Livestock is the largest agricultural sector in South Africa, with a population of some 13.8-million cattle and 28.8-million sheep. Dairy farming The dairy industry is important to South Africa's job market, with over 4 000 milk producers employing about 60 000 farm workers and indirectly providing jobs to some 40 000 people. Beef farming South Africa produces 85% of its meat requirements, with 15% imported from Namibia, Botswana, Swaziland, Australia, and New Zealand. Poultry and pig farming South Africa's annual poultry meat production is around 960 000 tons South Africa accounts for around 65% of world sales of ostrich products - leather, meat and feathers.

Mining and minerals in South Africa

South Africa is a world leader in mining. South Africa is the world's biggest producer of platinum, and one of the leading producers of gold, diamonds, base metals and coal.

Diamond and gold production may now be well down from their peaks, though South Africa is still no. 2 in gold. It is the world's largest producer of chrome, manganese, platinum, vanadium and vermiculite. It is the second largest producer of limonite, palladium, rutile and zirconium. It is also the world's third largest coal exporter.

Almost 50% of the world's gold reserves are found in South Africa. 78% of the world's platinum was produced in South Africa, along with 39% of the world's palladium. South Africa's production of chromium accounted for 39% of the world's total production. In 2009, coal became the largest component of South Africa's mining industry by sales value, with total sales of R65.4-billion, followed by platinum group metals at R58-billion and gold at R49-billion - the top three minerals accounting for 71.2% of total mineral sales.

The South African mining industry employs 493,000 workers The industry represents 18% of South Africa's $588 billion USD Gross Domestic Product.

Contribute 8.8% directly, and another 10% indirectly, to the country's gross domestic product (GDP). The mining industry contributes more than 50% to exports, and some estimates go up to 70%.

With the growth of South Africa's secondary and tertiary industries, the relative contribution of mining to South Africa's gross domestic product (GDP) has declined over the past 10-20 years.

2. Manufacturing Sector/ Secondary Sector

Manufacturing is relatively small, providing just 13.3% of jobs. South Africa's automotive industry The South African automotive industry accounts for about 10% of South Africa's manufacturing exports, contributes 7.5% to the country's GDP and employs around

36,000 people. South Africa currently exports vehicles to over 70 countries mainly to Japan (about 29% of the value of total exports), Australia (20%), the UK (12%) and the US (11%). South Africa also exported ZAR 30.3 billion worth of auto components. Pharmaceuticals
More than US$1-billion worth of pharmaceuticals are sold in South Africa annually, and the market is expected to grow substantially.

Chemical Industry South Africa chemical industry is of substantial economic significance to the country, contributing around 5% to Gross Domestic Product and approximately 25% of its manufacturing sales. Two noticeable traits characterize the South African Chemical sector. Firstly upstream sector is concentrated and well developed, the downstream sector- although diverse- remains underdeveloped. Second, the synthetic coal and natural gas based liquid fuels and petrochemicals industry is prominent, with South Africa being world leader in coal based synthesis and gas-to-liquids(GTL) technology. Metal industry South Africas large, well developed metals industry, with vast natural resources and a supportive infrastructure represent roughly a 3rd of all south Africas manufacturing. Ranked the worlds ninetieth largest steel producing country in 2001, South Africa is the largest steel producer in Africa( almost 60% of Africas total production).South Africa is a net exporter, ranked 10th in the world, to more than 100 countries. Approximately 500,000 tones of ferrous scrap were exported by metal recyclers in 2001. Imports accounted for only 5.8% of total domestic consumption of primary steel products in 2001. Sales to the local market increase by more than 6% during 2001. When compared with 2000. South Africas non-ferrous metal industry comprise aluminum and other metals (including, copper, brass, lead, zinc, tin). Aluminum is the largest sector but as SA has no commercially exploitable deposited, feed stock is imported. Textile, Clothing and Footwear Industry The South African textile and clothing industry has a powerful vision. It aims to use all the natural, human and technological resources at its disposal to make SA the

preferred domestic and international supplier of South African manufactured textiles and clothing. Since 1994, about US dollar 900 million has been spent on modernizing and upgrading the industry, make it efficient, internationally competitive and ready to become a major force in the world market. Exports accounts for R1, 4 billion for apparel and R2, 5 billion for textile, mostly to the US and European markets.

3. Service Industry/ Service Sector

South Africa is a popular tourist destination, with around 860,000 arrivals per of which around 210,000 is from outside the African continent. South Africa's tourism industry South Africa's scenic beauty, magnificent outdoors, sunny climate, cultural diversity and reputation for delivering value for money have made it one of the world's fastest growing leisure - and business - travel destinations. Tourism is also one of the fastest growing sectors of South Africa's economy, its contribution to the country's gross domestic product (GDP) increasing from 4.6% back in 1997 to 8.3% in 2010. Business tourism An estimated 6-7% of South Africa's foreign visitors were business tourists. Total foreign direct spend by business tourists in the country amounted to R2.4-billion. Sports tourism World-class venues and supporting infrastructure, top international events, and South Africans' passion for sport combine to make the country a huge drawcard for sports fans. More than 10% of foreign tourists come to South Africa to watch or participate in sport events, with spectators accounting for 60% to 80% of these arrivals. Computer software and services South Africa imports some 80% of its software from the United States, with the balance from Israel, Germany, the United Kingdom and France. South Africa is the 20th largest consumer of IT products and services in the world.

ICT and electronics in South Africa

The leader of information and communication technology (ICT) development in Africa, South Africa is the 20th largest consumer of IT products and services.

Outsourcing to Africa South Africa is well placed to become a favored international location for business process outsourcing. South Africa has also established itself as a quality, low-cost call centre destination.

Chapter 2:

Trade
The economy is based on foreign trade. More than half of the gross national product (GNP) is achieved through exports and imports. Exports Export goods $67.93 billion gold, diamonds, platinum, other metals and minerals, machinery and equipment

Main export partners Imports Import goods Main import partners FDI stock Gross external debt

Japan 11.1%, United States 11.1%, Germany 8%, United Kingdom 6.8%, China 6%, Netherlands 5.2% $70.24 billion machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs Germany 11.2%, China 11.1%, United States 7.9%, Saudi Arabia 6.2%, Japan 5.5%, United Kingdom 4% $125.7 billion $73.84 billion

Principal international trading partners of South Africabesides other African countriesinclude Germany, the United States, China, Japan, the United Kingdom and Spain. Chief exports include corn, diamonds, fruits, gold, metals and minerals, sugar, and wool. Machinery and transportation equipment make up more than onethird of the value of the countrys imports. Other imports include chemicals, manufactured goods, and petroleum.

DTI: first stop for exporters

The main government body tasked with assisting exporters is the Department of Trade and industry (DTI). The DTI is thus positioned as the essential point of contact for anyone involved in trade and investment in South Africa. The DTI focuses on promoting sectors of the economy that have shown the greatest growth potential and marketability. These include: Agro processing Automotive and transport industries Chemicals, pharmaceuticals and biotechnology Cultural industries Information and communications technology and electronics Mining and metal-based industries

Textiles, clothing, leather and footwear Tourism

The DTI also provides incentives to exporters - with a special focus on small, medium and micro enterprises (SMMEs) and black economic empowerment (BEE) exporters - through the Export Marketing and Investment Assistance (EMIA) scheme.

Exports of South Africa (Sector wise)

Source: http://apps.thedti.gov.za/econdb/raportt/rapstruc.html Chart-A Analysis: With reference to the above chart and table 1 in Annexure 1, it can be analyzed that exports from 2001 to 2010 in agriculture sector is showing both upward and downward trend and by comparing from total trade it has been decreasing from 22.35% growth to 0.98% which is very low and because of the upcoming manufacturing and service sectors in South Africa. While looking to Mining it has shown both upward and downward trend from 2001 to 2010 as it has even shown negative percentage growth in 2003 for -21.09% and in 2009 for -5.33%. Even in Manufacturing it follows same as mining and has shown negative percentage growth in 2003 for -6.62% and in 2009 for -28.91%. This negative growth is seen just because of the recessionary situation prevailed in 2003 and the worst condition of recession seen in 2008-09. Similarly the overall trade have shown the same impact and changed its percentage growth from 18.95% in 2001 to 13.88% in 2010. Because of the recession effect in 2003 and 2009 the overall export trade shows negative growth as -11.80% and -20.26%. [For further details refer Annexure 1, Table 1]

Imports of South Africa (Sector wise)

Source: http://apps.thedti.gov.za/econdb/raportt/rapstruc.html Chart-B Analysis: Here, we can analyze South African imports from 2001 to 2010 in agriculture sector that it is showing negative growth in initial years of 2001, 2003 and 2005 and even in 2009-10. The highest percent of import done is in 2002 in agriculture sector of 96.66% whereas in 2002 mining and manufacturing have very low percent growth of 12.38% and 28.88% respectively. While looking to Mining it has shown negative percentage growth in 2003 for -6.32% and in 2009-10 for -43.95% and -4.66% resp. Even in Manufacturing it follows same as mining and has shown negative percentage growth in 2003 for -5.67% and in 2009 for -24.01%. This negative growth is seen just because of the recessionary situation prevailed in 2003 and the worst condition of recession seen in 2008-09Because of the recession effect in 2003 and 2009 the overall import trade shows negative growth as -6.02% and -28.03%. [For further details refer annexure 1, table 2]

Balance of Trade of South Africa

Source: http://apps.thedti.gov.za/econdb/raportt/rapstruc.html Chart-C

Analysis: SA majorly exports pearls, precious metals, ores and slag to the world and it its major imports from the world countries are animal, vegetable fats, bird skin, feathers, ceramic products etc. [For further details refer Annexure 1, Chart 1]

Incentives for exporters

Export credit incentives

The Industrial Development Corporation (IDC) makes financing available at reduced rates for selected expansion schemes that are expected to result in increased foreign exchange earnings. Export credit insurance

Under the Export Credit Finance Guarantee Scheme, the Credit Guarantee Insurance Corporation provides substantial export credit insurance to small, medium and micro enterprises (SMMEs).

Customs and Excise duty refunds

Provision is made in the Customs and Excise Act for general refunds, as well as a large number of specific drawbacks and refunds of customs and excise duties, to exporters. These concessions are available to manufacturers as well as to merchants who import goods for re-export.

Regulations for Importers

Foreign Trade Zones: No Foreign Trade Zones or Free Ports are established in

South Africa.
South Africa uses the Harmonized System of Classification. Samples are dutiable unless they are cut samples of cloth, leather, and linoleum

and wallpaper in book form and not for distribution as advertising matter. Samples that have no commercial value because of mutilation in some way are also allowed duty-free access.

 The South African Government has viewed countertrade as a second-best

alternative to be engaged in only when normal trade cannot be conducted.

Bonded warehouses are available at various points of entry. South African banks can accommodate all international transactions and are

situated throughout the country.

General rebates of duty are available for specific situations, and duties may be

rebated on goods on re-export.

The Reserve Bank plays a pivotal role in the economic and financial sectors. Some imports may require permission from the Department of Agriculture, Health

or Environment Affairs.
Specific excise taxes are levied on alcoholic and non-alcoholic beverages,

tobacco and tobacco products, mineral waters, some petroleum products and motor vehicles. South Africa is an adherent to the Customs Valuation Agreement negotiated under GATT/WTO. The dutiable value of goods imported into South Africa is calculated on the F.O.B. price in the country of export. In conformance with its WTO commitments, South Africa has lifted import surcharges.

National Industrial Participation Programme (NIPP)

The NIP programme is mandatory on all government and parastatal purchases or lease contracts (goods and services) with an imported content equal to or exceeding US$10 million. The first customer of NIP is the South African industry when implemented investment, export opportunities, job creation, increased local sales, R & D and technology transfer. The second customer of NIP is the foreign suppliers who benefit from the programme through increased participation in the South African economy.

Chapter 3:

Commerce
Commerce means the whole system of an economy that constitutes an environment for business. Thus, commerce is a system or an environment that affects the business prospects of an economy or a nation-state. South Africa is regarded as a fairly rich middle-income country. Yet almost half its 50m inhabitants live on less than $2 a day. The official jobless rate is still hovering around 25%, Primary sector contribution of agricultural industry to GDP was about 3%. With respect to secondary market, its contribution to GDP was about 31.2% while highest contribution of services sector was 65% that shows South Africa is going on the path of to be developed countries.

 It is the world's largest producer and exporter of gold and platinum and

also exports a significant amount of coal. Table

Statistics
GDP GDP growth GDP per capita GDP by sector Inflation (CPI) $357.4 billion (2010) (nominal; 29th) $524.6 billion (2010) (PPP; 25th) 4.6% (Q1 2010) $7,158 (2010) (nominal; 71st) $10,498 (2010) (PPP; 77th) Agriculture (3.6%), Industry (31.4%), Services (65%) 4.6% (May 2010) Mining (world's largest producer of platinum, gold, chromium), Automobile assembly, Metalworking, Machinery, Textiles, Iron and Steel, Chemicals, Fertilizer, Foodstuffs, Commercial ship repair

Main industries

South Africa compares well to other emerging markets on affordability and availability of capital, financial market sophistication, business tax rates and infrastructure, but fares poorly on the cost and availability of labor, education, and the use of technology and innovation. South Africa was found to have the second most sophisticated financial market and the second-lowest effective business tax rate. It stands sixth for its transport infrastructure (considered better than that of China, India, Mexico, Brazil and Poland, but behind that of Korea and Chile), and seventh for Foreign Direct Investment as a percentage of GDP. South African workers are more productive than workers in Russia, Colombia, Brazil, China and India, but less productive than workers in Korea, Chile and Mexico.

Competitive advantages
South African agriculture and agribusiness have a number of competitive advantages, making the country both an important trading partner and a viable investment destination. World-class infrastructure South Africa has three deep-water ports, three international airports, a network of roads and railways, well-developed. Marine resources South Africa has almost 3 000 kilometers of coastline which is commercially used both for conventional harvesting and for mariculture and aquaculture. Competitive input costs While South Africa boasts infrastructure comparable to first-world countries, its cost structures remain highly favorable. Electricity is still relatively inexpensive, and labor rates are also competitive. Trade agreements

South Africa's agriculture and agribusiness sector are benefiting from increased market access to its key trading partners, the EU and the US, as well as to subSaharan countries, through a number of trade agreements. Ports and shipping Major shipping lanes pass along the South African coastline in the South Atlantic and Indian oceans. Approximately 96% of the country's exports are conveyed by sea through eight commercial ports. Railways South Africa has an extensive rail network the 14th longest in the world. South Africa improves competitiveness South Africa improved its ranking in the World Economic Forum's (WEF's) latest Global Competitiveness Index, climbing four places to 50th out of 142 countries surveyed, while claiming top spot for regulation of exchanges and second place for soundness of banks. Gains in key areas South Africa's overall ranking, after slipping nine places last year from 45 to 54 recovered to 50 in 2011-12, thanks mainly to impressive gains in accountability of private institutions, strength of investor protection and technological readiness. The country was ranked: 1st for regulation of securities exchange. 1st for strength of auditing and reporting standards. 2nd for soundness of banks. 2nd for efficacy of corporate boards. 3rd for protection of minority shareholders' interests. 3rd for availability of financial services. 4th for financing through the local equities market. 7th for effectiveness of anti-monopoly policy.

Disadvantages
South Africa is falling behind other emerging markets, such as India and China, owing to several factors: the country is relatively small, without the advantage of a

huge domestic customer base; it has had for decades an unusually low rate of saving and investment, partly because of political uncertainties; an inadequate education system results in an acute shortage of skilled manpower; a strong and volatile currency deters investors and makes its exports less competitive; the infrastructure, though far better than in the rest of Africa, suffers from severe bottlenecks, including power shortages, and urgently needs upgrading. Other limitations encapsulate:

For availability of manual labor, South Africa is ranked last, and is also the only country of the 14 whose labor force shrunk. The cost of manual labor is ranked fifth out of 11 countries, at about the same level as South Korea, but more expensive than Brazil, India and China.

Chapter 4:

INDIA & SOUTH AFRICA

SA imports total 38.8% and exports 33.7% with India of its total exports and imports with Indian Ocean RIM countries. Out of its total trade with other countries in Indian Ocean RIM SA trades the most with India (refer Annexure-1, Table 3)

Bilateral trade between India, South Africa pegged at $15 billion by end of FY12
Exports from India to South Africa include vehicles and components thereof, transport equipment, drugs and pharmaceuticals, computer software, engineering goods, footwear, dyes and intermediates, chemicals, textiles, rice, and gems and jewellery, etc. Import from South Africa to India include rock phosphates, precious stones and minerals, fertilizers, steel, coal, transport equipment, pulp and pulp manufacturing, etc. India and South Africa have revised the target of bilateral trade at $15 billion from an original target of $10 billion by end of 2011-12. This was possible largely due to a surge in trade in coal, gold, ICT, automotive items, pharmaceuticals and oil & gas. South Africa is quite keen to increase trade and investments from India. The bilateral trade has already reached a level of $10 billion as of now, and is expected to achieve a new high of $15 billion by end of the current financial year. At present, South Africas trade with China is around $20 billion. Manufacturing, engineering, agro-processing, tourism and bio-technology, apart from mining, are the key sectors where there is further scope for both the countries to grow.

Implications for India

As SA has good sources of natural resources and well developed mining industry, it would benefit the Indian industries which are dependent on raw materials or other natural resources. South Africa is the world's biggest producer of platinum, and one of the leading producers of gold, diamonds, base metals and coal. So, South Africa would be a good source destination for Gem &

Jewellery. Particularly Indians have a tradition to buy gold and India is a major buyer of a gold. Agricultural exports have constituted 8% of total exports. Maize is most widely grown, followed by wheat, oats, sugar cane and sunflowers. Here SA is a threat for Indian Agricultural industry in Sugar, Maize, and Wheat. The South African automotive industry accounts for about 10% of South Africa's manufacturing exports. More than US$1-billion worth of pharmaceuticals are sold in South Africa annually, and the market is expected to grow substantially. India is a net exporter of Pharma products so thats a good opportunity for Indian companies to establish market in SA. As mention in the report South Africa is the 20th largest consumer of IT products and services in the world. This will be an opportunity for Indian IT industries to develop its market in South Africa. And South Africa has also established itself as a quality, low-cost call centre destination. South Africa is well placed to become a favored international location for business process outsourcing. This is a threat for Indian outsourcing firms as India is outsourcing destination of the world and now has to face stiff competition from South African outsourcing industry.

Top of Form

Bottom of Form

Export Import Data Bank of India Country - wise

Department of Commerce
(Values in Rs Lacs)
Table

Country: SOUTH AFRICA

S.N o. 1. 2. 3. 4.

Year EXPOR T %Growt h India's Total Export %Growt

2006-2007

2007-2008

2008-2009 899,429.11 -15.93

2009-2010

2010-2011

1,016,527.6 1,069,875.5 8 2 5.25

975,125.38 1,821,472.6 9 8.42 86.79

57,177,928. 65,586,352. 84,075,505. 84,553,364. 114,264,897 52 18 87 38 .18 14.71 28.19 0.57 35.14

h 5. 6. 7. 8. 9. %Share 1.78 1.63 1.07 1.15 1.59 IMPORT 1,118,413.7 1,454,655.6 2,488,228.7 2,690,022.6 3,252,514.2 0 2 2 6 2 %Growt h India's Total Import %Growt h 1.33 TOTAL TRADE %Growt h 30.06 71.05 8.11 20.91

84,050,631. 101,231,169 137,443,555 136,373,554 168,346,695 33 .93 .45 .76 .57 20.44 1.44 35.77 1.81 -0.78 1.97 23.45 1.93

10. %Share 11. 12.

2,134,941.3 2,524,531.1 3,387,657.8 3,665,148.0 5,073,986.9 8 4 4 5 1 18.25 34.19 8.19 38.44

India's 13. Total Trade 14. %Growt h

141,228,559 166,817,522 221,519,061 220,926,919 282,611,592 .85 .10 .32 .14 .75 18.12 1.51 1.51 32.79 1.53 -0.27 1.66 27.92 1.80

15. %Share TRADE 16. BALAN CE India's 17. Trade Balance

26,872,702. 35,644,817. 53,368,049. 51,820,190. 54,081,798. 81 75 58 38 39 Source: DOC-NIC

Indias export and imports from South Africa have considerably increased year-onyear basis.

INDIA - SOUTH AFRICA RELATIONS

To promote bilateral and regional commercial relations with the COMESA Region, Indias Exim Bank has extended Lines of Credit (LOCs) to support export of eligible goods on deferred payment terms. The operative LOCs covering this region include US$ 5 million each to the Eastern and Southern African Trade and Development Bank (PTA Bank). These Lines of Credit

seek to expand export of product groups identified as those with potential to enhance trade between two regions.

Total bilateral trade between India and South Africa is approaching Rand 6.5 billion, with imports from India at Rand 3.12 billion and exports to India at Rand 3.35 billion. Table Value of bilateral trade that has trebled from 2003-2015 2003-2004 2008-2009 2012 2014 2.5 billion 7.5 billion 10 billion 15 billion

Major investors include Tata (automobiles, IT, hospitality, and ferrochrome plant), UB Group (breweries, hotels), Mahindra (automobiles) and a number of pharmaceutical companies, including Ranbaxy, CIPLA, etc as well as IT companies and some investments in the mining sector. There is also growing South African investments in India led by SAB Miller (breweries), ACSA (upgradation of Mumbai airport), SANLAM and Od Mutual (insurance), ALTECH (set top boxes), Adcock Ingram (pharmaceuticals), Rand Merchant Bank (banking). An important initiative under negotiation is the India-SACU Preferential Trade Agreement. Indian companies are currently executing projects worth over three billion dollars in South Africa. Cumulative Indian investments in South Africa are over six billion dollars -- mainly in automobiles, information technology, hospitality, ferrochrome plants, breweries, pharmaceuticals and mining. South Africas mining assets are estimated at 2.5 trillion dollars.

ITEC Programme

Indias Technical and Economic Cooperation Programme (ITEC) has been a useful medium of promoting cooperation in development of human resources. South Africa has utilized about 500 ITEC slots for training since 2000. Thus, there are considerable efforts from both the countries to reinforce their trade relations.

Chapter 5:

Conclusion

South Africa is regarded as a fairly rich middle-income country. Primary sector contribution of agricultural industry to GDP was about 3%. With respect to secondary market, its contribution to GDP was about 31.2% while highest contribution of services sector was 65% that shows South Africa is going on the path of to be developed countries. The mining industry still plays a prominent part.
Primary / Agricultural sector`s contribution exports constituted 8% of total exports for

the past five years. The agricultural industry contributes around 10% of formal employment contributing around 3.6% of GDP for the nation. South Africa is among the world's top five exporters of avocados, grapefruit, tangerines, plums, pears, and table grapes and ostrich products. Wine, citrus, sugar, grapes, maize, fruit juice, wool, and deciduous fruit such as apples, pears, peaches and apricots. Secondary / Manufacturing sector is relatively small, providing just 13.3% of jobs. Major manufacturing industries are automotive industry, pharmaceuticals, Chemical
Industry, Metal industry and Textile, Clothing and Footwear Industry.

Major Service related industries are tourism industry, electronics, Outsourcing. South Africa is the 20th largest consumer of IT products and services in the world. South Africa has also established itself as a quality, low-cost call centre destination. It is among the top 30 software development outsourcing destinations. South Africa is well placed to become a favored international location for business process outsourcing. South African economy is based on foreign trade. More than half of the gross national product (GNP) is achieved through exports and imports. Chief exports include corn, diamonds, fruits, gold, metals and minerals, sugar, and wool. Machinery and transportation equipment make up more than one-third of the value of the countrys imports. Other imports include chemicals, manufactured goods, and petroleum. Principal international trading partners of South Africabesides other African countriesinclude Germany, the United States, China, Japan, the United Kingdom and Spain. SA provides various incentives for exporters like Export credit incentives, Export credit insurance, Customs and Excise duty refunds. And implies regulations on importers to safeguard the local industries. . The NIP programme is mandatory on all

government and other purchases or lease contracts (goods and services) with an imported content equal to or exceeding US$10 million. Country`s political and legal environment is very favorable for industrial development. Banks and financial intermediaries are in sound condition. SA has world class infrastructure of road, rail, ports etc. It is the world's largest producer and exporter of gold and platinum and also exports a significant amount of coal. South Africa was found to have the second most sophisticated financial market and the second-lowest effective business tax rate. It stands sixth for its transport infrastructure (considered better than that of China, India, Mexico, Brazil and Poland, but behind that of Korea and Chile), and seventh for Foreign Direct Investment as a percentage of GDP. South African agriculture and agribusiness have a number of competitive advantages, making the country both an important trading partner and a viable investment destination like World-class infrastructure of Marine resources, Railways, Electricity is still relatively inexpensive, and labor rates are also competitive. South Africa is falling behind other emerging markets, such as India and China, owing to several factors: the country is relatively small, without the advantage of a huge domestic customer base; it has had for decades an unusually low rate of saving and investment, partly because of political uncertainties; an inadequate education system results in an acute shortage of skilled manpower; The cost of manual labor is more expensive than Brazil, India and China. A strong and volatile currency deters investors and makes its exports less competitive; the infrastructure, though far better than in the rest of Africa, suffers from severe bottlenecks, including power shortages, and urgently needs upgrading. . The bilateral relations between the Republic of India and the Republic of South Africa have grown strong since the end of apartheid in South Africa in 1994. Both nations have since developed close strategic, cultural and economic ties. SA imports total 38.8% and exports 33.7% with India of its total exports and imports with Indian Ocean RIM countries. Out of its total trade with other countries in Indian Ocean RIM SA trades the most with India.

Exports from India to South Africa include vehicles and components thereof, transport equipment, drugs and pharmaceuticals, computer software, engineering goods, footwear, dyes and intermediates, chemicals, textiles, rice, and gems and jewellery, etc. Import from South Africa to India include rock phosphates, precious stones and minerals, fertilizers, steel, coal, transport equipment, pulp and pulp manufacturing, etc. Indias Exim Bank has extended Lines of Credit (LOCs) to support export of eligible goods on deferred payment terms. These Lines of Credit seek to expand export of product groups identified as those with potential to enhance trade between two regions. Total bilateral trade between India and South Africa is approaching Rand 6.5 billion, with imports from India at Rand 3.12 billion and exports to India at Rand 3.35 billion.

ANNEX URE
1. Export of South Africa (Sector wise)

Source: http://apps.thedti.gov.za/econdb/raportt/rapstruc.html

2. Imports of South Africa (Sector wise)

Source: http://apps.thedti.gov.za/econdb/raportt/rapstruc.html

3. South African Trade Export and Import, Indian Ocean RIM

Source: www.commerce.nic.in

4. Share of South Africa in World Trade by Chapters

Source: Comtrade. S.A. C&E

Bibliography

www.apps.thedti.gov.za www.dti.gov.za www.wikipedia.com www.southafrica.info www.commerce.nic.in