India is our second largest BRICS trading partner

In rand terms, South African exports to to India were R90.1bn. Photo: AFP

In rand terms, South African exports to to India were R90.1bn. Photo: AFP

Published Jun 19, 2023


INDIA is South Africa’s second largest trading partner within the BRICS (Brazil, Russia, India, China and South Africa) grouping.

In 2022, China accounted for 9.4% of South Africa’s exports, while India had less than half that at 4.5%, according to the South African Revenue Service (Sars). China dominated South Africa’s imports with a 20.2% share while India’s share was around a third of that at 7.2%.

In rand terms, exports to China totalled R188.4 billion, while exports to India were R90.1bn. South Africa imported R367.4bn from China and R130.6bn from India, resulting in a trade surplus in favour of China worth R179bn and in favour of India of R40.5bn.

In 2010, South Africa still enjoyed a trade surplus with India of R1.4bn as trade with India was only starting to expand. In 2010, South Africa only exported R22.1bn to India resulting in a 3.3% share, while imports from India were R20.8bn for a 3.4% share.

What has changed is that imports from India have seen a switch to higher value added vehicle imports. In 2010, vehicle imports from India were only R2.8bn for a 13.5% share, but in 2022 this had expanded almost 10-fold to R26.8 billion for a 20.5% share. India is however not a large market for South African made vehicles and vehicle exports to India as a percentage of exports to India have shrunk to 0.1% from 0.3%.

This is disappointing as one of the reasons for expanding trade within the BRICS grouping was to promote a switch to value-added manufactured goods and away from raw materials. In the case of trade with India, raw materials in the form of mineral products dominates bilateral trade. In 2022, this category accounted for 75.8% of South African exports to India and 39.9% of South African imports from India. This is an even higher share than the mineral product share of 63.9% of total exports to China and only a 2.6% share of Chinese exports to South Africa.

What is even more surprising is that instead of reducing the share of mineral products in bilateral trade, the shares have in fact increased, as mineral products amounted to a 68.5% share in South African exports to India in 2010, while mineral products share of Indian exports to South Africa had a 30.1% share.

The second largest export category in 2022 was wood pulp and paper with an 8.5% share and then products of iron and steel with a 5.8% share. All other categories had annual exports of less than R4bn.

The third largest import category in 2022 was chemicals with a 12.9% share followed by machinery with a 10.8% share. Products of iron and steel had a 3.2% share and textiles only a 2.6% share, less than half the 2010 share of 5.4%.

In total there were five import categories where South African imports from India exceeded R4bn, while there were only three categories that exceeded R4bn. By contrast, South African trade with China is more diversified as there were 12 import categories where imports from China exceeded R4bn, while there five categories where exports exceeded R4bn.

Helmo Preuss: Economist at Forecaster Ecosa