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President and Mrs Thabo Mbeki will pay a State Visit to India from Thursday, 16 to Saturday, 18 October 2003.

President Mbeki will be accompanied by the Minister of Foreign Affairs Dr Nkosazana Dlamini Zuma, the Minister of Environmental Affairs and Tourism Mr MV Moosa, the Minister of Health Dr M Tshabalala-Msimang, the Minister of Trade and Industry Mr A Irwin, the Minister of Communications Dr I Matsepe-Casaburri, the Minister of Defence Mr MGP Lekota, the Minister of Agriculture and Land Affairs Ms A Thoko Didiza, the Minister of Justice and Constitutional Development Mr PM Maduna, the Minister of Arts, Culture, Science and Technology Dr BS Ngubane, the Minister of Public Enterprises Mr J Radebe, the Minister of Minerals and Energy Affairs Ms P Mlambo-Ngcuka and the Minister in the Presidency Dr EG Pahad.

The visit is intended to give impetus to the strategic partnership with India and substance to the economic dimension of the relationship. The following agreements will be signed: Extradition treaty, Agreement on Mutual Legal Assistance in Criminal Matters and a Memorandum of Understanding on Electricity. In addition a Programme for Cultural Co-operation between the Governments of South Africa and India for the years 2004-2006 will be entered into.

During the visit, President Mbeki and Prime Minister Vajpayee will hold bilateral discussions during which the following issues will be discussed:

* Status of bilateral relations between both countries;
* Mutual security related issues i.e. criminal matters, terrorism, extradition and defence;
* Status of South-South and North-South relations;
* Developments within Africa with reference to the African Union and NEPAD and continental conflict resolution efforts;
* Strengthening of multilateralism;
* India-Brazil-South Africa (IBSA) trilateral co-operation, agenda and envisaged programme of action;
* World Trade Organisation;
* Campaign against international terrorism; and
* Aftermath of the war in Iraq and developments in the Middle East

Relations between South Africa and India have historically been solid. Since the establishment of diplomatic relations in 1993, former President Mandela has twice visited India on State visits whilst Indian Prime Ministers Gujral (March 1997) and Vajpayee have also visited South Africa (the latter to attend the Non-Aligned Movement [NAM] Summit in Durban in August 1998 and the Commonwealth Heads of Government Meeting [CHOGM] Summit in November 1999). President Mbeki visited India as Deputy President in 1996. In the last number of years almost seventy per cent of the South African Cabinet has had the opportunity to visit India.

Two important agreements serve as the basis for the relationship between South Africa and India. The first is the Agreement on the Inter-Governmental Joint Commission for Political, Trade, Economic, Cultural, Scientific and Technical Co-operation signed by Former President Mandela and Prime Minister Narasima Rao on 25 January 1995.

The second important foundation of the bilateral relationship between India and South Africa is the historic Red Fort Declaration on bilateral partnership, which was signed during former President Mandela's state visit to India in March 1997. The partnership is based on a common commitment to economic development, social justice and co-operation for a global order that is marked by peace, security and equity.

South Africa and India have growing bilateral relations under the aegis of the Joint Ministerial Commission (JMC) in the political, communications, economic, education, defence, health, science and technology, housing, arts, culture, agricultural spheres. The last meeting of the JMC took place on 3 and 4 July 2003 in Pretoria. The two sides discussed a wide range of global issues including the future of multilateralism, international economic relations, the way ahead for the NAM and South-South Co-operation.

In addition, India reconfirmed its support for New Partnership for Africa's Development (NEPAD) and announced the earmarking of a sum of US$200 million in a combination of grants, credits and loans for projects under NEPAD.

Trade between South Africa and India continues to grow. In 2002, total bilateral trade approached a level of R7,0 billion, with imports from India at R2,91 billion and exports to India at R4,03 billion. India currently ranks as South Africa's 15th most important export market and 24th most important import market. Given the potential for bilateral trade, this may well change during coming years.

In 2002 India and South Africa established a bilateral Working Group to negotiate a Preferential Trading Agreement between the two countries. The Working Group first met in December 2002 in Pretoria and aims at concluding its work at the end of 2004.

The size of the Indian economy gives it an influential position in the global market in which South Africa has a key interest. Since South Africa and India have similar developmental challenges, their collective capacity in bargaining and voicing concerns that affect their economies in international forums is made highly effective. As a key emerging regional economy, India provides a platform for the re-integration of the South African economy with that of South Asia.

South Africa and India enjoy historical relations that hold significant promise for the growth of economic relations and co-operation in key areas like information communication technology, and in the multilateral arena. India is therefore key in the advancement of South Africa's butterfly strategy and ongoing discussions on a future Free Trade Area (FTA) confirm this.

Opportunities for closer co-operation in the following sectors have been identified and form part of South Africa's trade development agenda in India:

* Mining, mining equipment and related services: The new mining laws (early 2000) have allowed foreign firms to partner government controlled Indian firms. There have been visits to seal co-operative ventures in the past few months.
* Capital equipment (construction and related infrastructure): Infrastructure bottlenecks have been cited as the key impediments to economic growth. The government has now begun to deal with infrastructure problems, thereby creating opportunities.
* Agro-processed products: South African firms have began to manufacture fruit juices (Tropicana) at the same time regulations regarding the importation of fruit juices, and other processed foods are under review.
* Environmental equipment and related services.
* Autos and components (the impending deregulation in this industry has significant promise for South African auto industry).
* Services: Engineering and financial services are increasingly attracting attention.
* ICT: India's information communication technology (ICT) prowess (software development) has attracted attention and South Africa has begun to engage relevant firms. Tie-ups, and memoranda of understanding have been signed between the two nations. South Africa views India's technical pool in ICT as holding promise for future co-operation between the two countries. Co-operation in space technology offers further opportunities.
* Science and technology: India's technical manpower pool has been noted as providing impetus for closer co-operation with South Africa, especially in software development.
* Health: South Africa would like to learn more about the traditional knowledge system development (institutionalising traditional knowledge in medicines).
* SMME: Co-operation in SMME development, jewellery and between the two countries' CSIRs is ongoing.

BACKGROUND

South Africa's relations with India

Internationally, India was one of apartheid South Africa's earliest and most prominent critics. India also provided moral and logistical support to the African National Congress (ANC) over a period of four decades.

India opened an Indian Cultural Centre in Johannesburg in May 1993, whilst South Africa opened a mission in New Delhi in November 1993. On 22 November 1993, an Agreement establishing full diplomatic relations was signed. In December 1993 the Indian Cultural Centre was upgraded to a Consulate-General. April 1994 saw South Africa established a Consulate-General in Mumbai and the Indian High Commission in Pretoria established. A second Indian Consulate-General was opened in Durban in April 1994.

The current South African High Commissioner to India is Mrs ME Nkoane-Mashabane whilst Mr CH Qomoyi is the South African Consul-General in Mumbai. Mr SS Mukerjee is the Indian High Commissioner to South Africa.

Agreements

South Africa and India have to date signed the following Agreements:
* Agreement on the establishment of diplomatic relations: 22 November 1993
* MoU on Bilateral Air Services: 8 April 1993;
* Trade Agreement: 22 August 1994;
* Agreement on the Inter-governmental Joint Commission for Political, Trade, Economic, Cultural, Scientific & Technical Co-operation: 25 January 1995;
* Treaty on the Principles of Inter-state Relations and Co-operation: 25 January 1995;
* Protocol on Co-operation between the Ministry of External Affairs of India and the Department of Foreign Affairs of South Africa: 25 January 1995;
* Agreement on Co-operation in the Field of Science & Technology: 19 July 1995;
* Agreement on Co-operation in the Field of Culture: 4 December 1996;
* Agreement on Avoidance of Double Taxation and Prevention of Fiscal Evasion: 4 December 1996;
* MoU on Co-operation in the Field of Defence Equipment: 4 December 1996;
* Red Fort Declaration on a Strategic Partnership: 28 March 1997;
* Agreement in the Field of Tourism: October 1997;
* The Terms of Reference of the India-South Africa Commercial Alliance (ISACA): October 1997;
* Programme of Co-operation (PoC) in the Field of Science and Technology: October 1997;
* Agreement on Co-operation in the Fields of Geology and Mineral Resources: October 1997. Subsequently the first meeting of the Working Group was held in Pretoria/Cape Town in August 1998 when a Protocol was also signed;
* MoU on Defence Co-operation: 27 September 2000;
* Executive Programme for Cultural Co-operation between the Governments of South Africa and India for the Years 2001, 2002 and 2003: 15 March 15 2001 in pursuance of the implementation of the Cultural Agreement signed between the two countries on 4 December 1996; and
* Declaration of Intent on Co-operation in the Field of Health and Medicine: on 30 April 2001.

Economic relations with South Africa

South Africa trade with India (Rand - billions) (Source: DTI)

1997
Exports 1.34
Imports 1.54
Total 2.88

1998
Exports 1.63
Imports 1.63
Total 3.26

1999
Exports 2.36
Imports 1.51
Total 3.87

2000
Exports 3.0
Imports 1.76
Total 4.76

2001
Exports 3.3
Imports 2.11
Total 5.43

2002
Exports 4.03
Imports 2.91
Total 6.94

Main Indian products exported to South Africa are cotton, yarn, finished leather goods, machinery and instruments, handmade yarn fabrics, chemicals, spices, rice, handicrafts and handmade carpets.

Main products imported from South Africa are gold, silver, coal and briquettes, iron and steel, inorganic and organic fertiliser, pulp and waste paper, and petroleum crude.

Investment

Total investment from India in South Africa: US$15.6m (Source: Reserve Bank, India)
Total investment from South Africa in India: US$26.1m (Source: Reserve Bank, South Africa)

Bilateral Trade

Historical relations between the two countries are now being used to foster closer economic links. To maximise opportunities between the two economies, various mechanisms have been created. The India-South Africa Commercial Alliance (ISACA), a private sector driven, government facilitated sectoral interaction forum was set up in recognition of the need to bridge the information awareness gap, deal with industry concerns, overcome barriers to trade and investment and stimulate trade in manufacturers and services between the two countries. ISACA meets under the auspices of the Joint Ministerial Commission (JMC).

ISACA was re-invigorated during its last (second) meeting in Pretoria in June 2002. The creation of smaller but effective cross-sectoral working groups within ISACA has helped develop trade and build alliances. Tie-ups in ICT, mining and mining equipment have been noted as a result. Frequent visits and information exchange continues.

Defence Co-operation

A number of areas of co-operation between the South African and Indian Defence Forces have been identified, including joint activities in the field of defence production, training exchanges, joint exercises, co-operation in the field of hydrography and information sharing. Indian Defence delegations have visited South Africa during the past two years to discuss matters related to production of defence equipment and sharing of technical expertise.

The Chief of Indian Naval Staff, Vice Admiral Singh, has stated that the primary objective of South Africa-Indian Navy co-operation is to ensure that the Indian Ocean remains a zone of peace. The Indian Navy currently provides 83 training slots to the South African Navy.

Culture

This year marks the 10th anniversary of diplomatic relations. A yearlong series of cultural events are being held under the auspices of the South African and Indian High Commissions and Consulates-General in co-operation with the South African Department of Arts and Culture and its Indian counterpart to celebrate this historic milestone.

Enquiries: Ronnie Mamoepa, 082 990 4853

Issued by: Department of Foreign Affairs, 14 October 2003

Source: Department of Foreign Affairs (http://www.dfa.gov.za)