CINDY PEREIRA | In India and Brics South Africa can find hope and growth

As global divisions deepen, India’s economic might and its friendship with South Africa can galvanise Brics as a pillar of the emerging multipolar order when these countries and their allies meet in Johannesburg.

The bloc of developing economies has become more vital amid deteriorating relations between Russia and the Nato powers over Ukraine. In these unsettled times, India and South Africa have a unique relationship that can help steer Brics in promoting global stability and equitable growth.

Having lived and worked in both India and South Africa, I have insight into the economic ties and enormous potential which exists for growth in relations between the two countries, even though these ties are already significant. In 2022, bilateral trade between the two countries surpassed $18bn (about R342bn) and from 2000 to 2022 South Africa was the 35th largest source of foreign direct investment into India.

There can only be an upside in South Africa investing in a deeper relationship with its partner on the sub-continent, whose economy is booming as much of the world battles economic challenges.

This year India's GDP touched the $3.75-trillion (about R71-trillion) mark and moved it into the fifth largest economy in the world, moving from the 10th spot, according to Forbes India. India's GDP is only lower than the US, China and Germany.

Numbers like this challenge a cynical tendency to dismiss the relevance of Brics. If the economic measure was front and centre this would less likely be the case. For example, a recent Times of India report which analysed International Monetary Fund data on global GDP based on Purchasing Power Parity since 1982, reveals a steady decline in the G7 nations' share and an equal steady rise in that of Brics nations.

The report showed the G7 nations' share of global GDP, based on this measure, reduced from 50% in 1982 to 30% in 2022, while the share of Brics nations increased from 10% in 1982 to 31% in 2022.

Of course, it is true South Africa faces some significant economic headwinds but these can and will be overcome, as India has richly demonstrated. Under current realities, it makes more sense than ever for South Africa to embrace Brics and its relationship with India as an opportunity to be part of a tide that floats all our boats.

There is much to learn from India’s success in the last decade. A recent Morgan Stanley study evaluating this period paints an optimistic picture, with unprecedented growth in some sectors of India’s economy for the decade to come. In particular, the report was bullish about the metamorphosis in India’s energy sector and how it is fuelling an economic boom, an area of great significance to South Africa.

In the India-South Africa Chamber of Commerce, we are excited about the prospects for expanded economic co-operation between our countries where both India and South Africa have much to gain through closer collaboration, and Brics provides the perfect platform to make progress on this shared vision.

Having worked closely with South African trade and investment organisations, I have seen first-hand the success of delegations between India and South Africa focused on areas like agriculture, wine exports, and information technology. There is tremendous potential for Indian businesses across sectors to invest in South Africa, set up manufacturing plants and create local jobs.

Like India, South Africa has much in place to turn its own fortunes. India’s technological prowess has been central to its economic revival, well demonstrated with headline events like the Chandrayaan lunar missions, or underpinned by a thriving IT services industry, and a surging digital payments ecosystem.

South Africa also boasts advanced technological capabilities which, for example, will see it host the world’s biggest radio telescope, the Square Kilometre Array, by the end of 2024. South Africa has sophisticated financial markets and is a leader in most economic and technological sectors on the continent.

Together, India and South Africa could be said to represent a fascinating technological vanguard from the developing world. This is further cemented through unique cultural connections like no other participants in Brics, with South Africa home to a thriving estimated 1.6-million strong Indian-origin community, one of the largest Indian diasporas globally, with a shared legacy of iconic figures like Mahatma Gandhi.

This strategic partnership can inject dynamism into Brics at a critical time when fractures over Ukraine are triggering Cold War-like tensions. India and South Africa’s industrial might combined with shared experience as former colonies gives Brics the credibility to speak for the Global South.

Together with South Africa and the other partners, Brics can continue to be a strong counterpoint in what is often a Western-dominated global dialogue on issues that affect us all. The Johannesburg Brics Summit represents the opportunity to turn this ambition into reality.

Cindy Pereira is executive director of the India-South Africa Chamber of Commerce.