CRAIG BENEY: India and SA — a new era of co-operation in private market investments
SA has a huge opportunity to generate bilateral investment in real assets
19 August 2024 - 05:00
byCraig Beney
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Wanting to see India play at the Wankhede cauldron in Mumbai surrounded by their passionate fans, and driven by the belief that 2023 would be the year of the Proteas one-day international team, I booked my first trip to India.
Excited to experience the Indian culture, my thoughts immediately turned to the trade and investment between our two countries and whether our intertwined history — particularly regarding indentured labour and Mahatma Gandhi’s time in SA — was reflected in these relations.
The result was somewhat disappointing. Though two-way trade between SA and India had increased to $19bn, it remained dominated by commodity trade. It seemed to me that SA was missing a significant opportunity to generate bilateral investment in real assets.
India’s GDP stands at $3.9-trillion, making it the world’s fifth largest economy, while SA by contrast stands at $405.27bn. The IMF has projected that India’s real GDP growth will come in at 6.8%, making it the fastest-growing nation in the Group of 20.
Why, then, do we not see more investment activity and broader trade between the two countries considering our history and the need to address similar urgent social needs?
As it stands, investments between India and SA are mostly through public companies such as Tata and Mahindra into SA, and Sanlam and Naspers into India. The opportunity for private markets seemed exceptional and entirely untapped, prompting a meeting with private equity counterparts I knew while I was there.
During my visit to India in November 2023 I was able to meet the COO of the Indian Venture & Alternate Capital Association, together with several private equity funds. This included the National Investment & Infrastructure Fund, which is 49% owned by the Indian government.
Discussions were extremely positive, recognising the similarities between India and SA in terms of a developing economy, the private equity industry and the willingness to engage with their investment professional counterparts.
The recent launch of the India-SA Investment Network in Johannesburg took place on the back of these discussions and signifies a new chapter in the economic relationship between India and SA.
Support for the network has been immense, as illustrated by the immediate and enthusiastic response from stakeholders in both regions who realise that the $19bn annual trade and similar value of cumulative mutual investments between India and SA, while significant, fall well short of their true potential.
Commitment
The presence of key stakeholders from both countries at the inaugural reception in August underscores the commitment to strengthening economic ties. Notable attendees such as HE Shri Prabhat Kumar, high commissioner of India to SA; Gideon Labane, consulate general (designate) of SA to Mumbai; Yunus Hoosen, head of Investment in SA (InvestSA), as well as Anthony Costa, investment programme lead for the SA president’s Investment Mobilisation Programme.
While stakeholders are eager to engage, high commissioner Kumar emphasised in his opening address why tangible action has yet to take place and the need to bridge what he terms “the information and awareness gap” that hampers investment decisions.
Demonstrating their commitment to close the information and awareness gap, Indian diplomats in SA have invested in collaborations with academic institutions including the Gordon Institute of Business Science, Wits Business School and the Johannesburg Business School. This is a strategic move to enhance the knowledge base and provide valuable insights into investment opportunities.
The lack of accurate information and understanding of the investment landscapes in both countries has been a significant barrier to bilateral investment and broadening the trade basket beyond commodities. By bringing together investment specialists, business leaders and academic institutions, we cancreate a robust support structure that will provide reliable information, foster partnerships and mitigate the fear of the unknown.
Kumar outlined some recent policy initiatives of his government which had proven successful:
Make in India. A policy to increase the share of manufacturing in the countryhas opened different sectors for up to 100% foreign investment.
Atmanirbhar Bharat (Self-reliant India). Launched during the Covid-19 period when there was interruption in supply chains and the government put forth the idea of being self-reliant in certain critical areas.
The Production Linked Incentive (PLI) under which thw government is providing incentives for establishing industries including like semiconductors, electric vehicles, renewable energy, medical equipment and others.
Labane announced his intention to set up a similar counterpart community in India, while Hoosen welcomed the initiative and highlighted several sectors that are ripe for mutual investment.
The investment network will focus on sectors with high growth potential, such as renewables, infrastructure, technology, healthcare, education and consumer markets. These sectors are ripe for collaboration and offer numerous opportunities for mutual benefit. For instance, India’s advancements in IT and technology can be leveraged to boost SA’s digital infrastructure, while SA’s rich mineral resources can support India’s growing industrial base.
The importance of partnerships to ensure success cannot be overstated. Successful investments often result from strategic alliances where each party brings unique strengths to the table. The network aims to facilitate such collaborations by connecting investors with local partners who have the necessary market knowledge and expertise.
By addressing investment barriers, leveraging academic partnerships and focusing on key growth sectors, the network is well positioned to usher in a new era of economic co-operation and growth.
As a cofounder of the investment network, I am looking forward to witnessing and contributing to the transformative impact of this initiative.
• Beney is CEO of Helical Capital Partners and cofounder of the India-SA Investment Network.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
CRAIG BENEY: India and SA — a new era of co-operation in private market investments
SA has a huge opportunity to generate bilateral investment in real assets
Wanting to see India play at the Wankhede cauldron in Mumbai surrounded by their passionate fans, and driven by the belief that 2023 would be the year of the Proteas one-day international team, I booked my first trip to India.
Excited to experience the Indian culture, my thoughts immediately turned to the trade and investment between our two countries and whether our intertwined history — particularly regarding indentured labour and Mahatma Gandhi’s time in SA — was reflected in these relations.
The result was somewhat disappointing. Though two-way trade between SA and India had increased to $19bn, it remained dominated by commodity trade. It seemed to me that SA was missing a significant opportunity to generate bilateral investment in real assets.
India’s GDP stands at $3.9-trillion, making it the world’s fifth largest economy, while SA by contrast stands at $405.27bn. The IMF has projected that India’s real GDP growth will come in at 6.8%, making it the fastest-growing nation in the Group of 20.
Why, then, do we not see more investment activity and broader trade between the two countries considering our history and the need to address similar urgent social needs?
As it stands, investments between India and SA are mostly through public companies such as Tata and Mahindra into SA, and Sanlam and Naspers into India. The opportunity for private markets seemed exceptional and entirely untapped, prompting a meeting with private equity counterparts I knew while I was there.
During my visit to India in November 2023 I was able to meet the COO of the Indian Venture & Alternate Capital Association, together with several private equity funds. This included the National Investment & Infrastructure Fund, which is 49% owned by the Indian government.
Discussions were extremely positive, recognising the similarities between India and SA in terms of a developing economy, the private equity industry and the willingness to engage with their investment professional counterparts.
The recent launch of the India-SA Investment Network in Johannesburg took place on the back of these discussions and signifies a new chapter in the economic relationship between India and SA.
Support for the network has been immense, as illustrated by the immediate and enthusiastic response from stakeholders in both regions who realise that the $19bn annual trade and similar value of cumulative mutual investments between India and SA, while significant, fall well short of their true potential.
Commitment
The presence of key stakeholders from both countries at the inaugural reception in August underscores the commitment to strengthening economic ties. Notable attendees such as HE Shri Prabhat Kumar, high commissioner of India to SA; Gideon Labane, consulate general (designate) of SA to Mumbai; Yunus Hoosen, head of Investment in SA (InvestSA), as well as Anthony Costa, investment programme lead for the SA president’s Investment Mobilisation Programme.
While stakeholders are eager to engage, high commissioner Kumar emphasised in his opening address why tangible action has yet to take place and the need to bridge what he terms “the information and awareness gap” that hampers investment decisions.
Demonstrating their commitment to close the information and awareness gap, Indian diplomats in SA have invested in collaborations with academic institutions including the Gordon Institute of Business Science, Wits Business School and the Johannesburg Business School. This is a strategic move to enhance the knowledge base and provide valuable insights into investment opportunities.
The lack of accurate information and understanding of the investment landscapes in both countries has been a significant barrier to bilateral investment and broadening the trade basket beyond commodities. By bringing together investment specialists, business leaders and academic institutions, we can create a robust support structure that will provide reliable information, foster partnerships and mitigate the fear of the unknown.
Kumar outlined some recent policy initiatives of his government which had proven successful:
Labane announced his intention to set up a similar counterpart community in India, while Hoosen welcomed the initiative and highlighted several sectors that are ripe for mutual investment.
The investment network will focus on sectors with high growth potential, such as renewables, infrastructure, technology, healthcare, education and consumer markets. These sectors are ripe for collaboration and offer numerous opportunities for mutual benefit. For instance, India’s advancements in IT and technology can be leveraged to boost SA’s digital infrastructure, while SA’s rich mineral resources can support India’s growing industrial base.
The importance of partnerships to ensure success cannot be overstated. Successful investments often result from strategic alliances where each party brings unique strengths to the table. The network aims to facilitate such collaborations by connecting investors with local partners who have the necessary market knowledge and expertise.
By addressing investment barriers, leveraging academic partnerships and focusing on key growth sectors, the network is well positioned to usher in a new era of economic co-operation and growth.
As a cofounder of the investment network, I am looking forward to witnessing and contributing to the transformative impact of this initiative.
• Beney is CEO of Helical Capital Partners and cofounder of the India-SA Investment Network.
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