India - South Africa Merchandise Trade: Export Prospects

Abstract

In recent years, India's trade with the African region has grown enormously, especially with South Africa, indicating the existence of a huge untapped trade potential for economic cooperation. The trend in total trade has shown the significant rise in both India's exports to and also India's imports from South Africa, with the imports having risen faster than the exports. The study provided an in-depth analysis of competitiveness of Indian exports at different time points (1991, 1996, 2001, 2006, and 2012) using SITC 3-digit product category level and links this analysis of Indian export potential to South Africa. The RCA was also estimated for import of South Africa for the latest study period (2012) to identify the commodities where South Africa enjoys an advantage to import from any country in the world. The study revealed that heavy petrol/bitum oils and zinc have a lower trade rank (traded more) than spices and synthetic organic colour agents (traded less) despite the fact that they are highly advantageous traded commodities, where both India has an advantage to export and South Africa has an advantage to import. Similarly, tea and mate, cine fild developed, natural abrasives n.e.s, are more advantageous to trade against rolled plated m-steel, footwear, rubber tyres/treads. To enhance trade complementarities with South Africa, India should diversify its exports in these product lines also. By focusing on these areas, the gains from trade can be maximized.