With its $4 trillion economy, India represents an enormous market, an emerging economic powerhouse and an increasingly important geopolitical player.

Despite the differences in scale – India has about 22 times more people than SA – there are striking commonalities between the two countries. Both are products of the British empire, which provides a common language (English), and they share many cultural points of contact. Importantly, 1.5 million South Africans are of Indian ancestry. All six of SA’s T20 cricket franchises are Indian owned, and the success of the Indian Premier League exposes many South Africans to that country every year, if only through the medium of television. India was the first country to host a SA national cricket team after the latter’s post-apartheid readmission.

However, the mutual fascination between the two countries has not yet translated into tourism numbers. Only 70 000 Indians visited SA in 2025, less than 1% of the 10 million-plus tourists to SA that year. But South African Tourism has targeted India’s burgeoning middle class and hopes to attract 100 000 visitors a year in the near future.

Ashwin Lakhan, co-head of investment banking at Rand Merchant Bank, suggests that India and SA ‘boast a strong and growing trade relationship, fuelled primarily by a complementary exchange of resources and manufactured goods’. Total bilateral trade is now worth some $19 billion, representing explosive growth from the $1 billion in 2000.

This makes India SA’s third-biggest export market, and Lakhan expects the relationship to deepen further.

‘Trade can be expected to more than double to $40 billion over the next decade as the breadth of the relationship extends into new mutually beneficial sectors’, he says.

However, this trade relationship is structurally unbalanced. Francois Fouché, a research associate at the Gordon Institute of Business Science’s Centre for African Management and Markets (CAMM) in Johannesburg, points out that SA exports raw materials – with gold and coal being the biggest items in the basket – and gets back manufactured goods, especially pharmaceuticals and vehicles.

The challenge is illustrated by the automotive sector. In 2025, 38% of new light vehicles sold in SA were manufactured in India, up from 5% in 2009. In February, the Suzuki Swift, built at the gigantic Maruti-Suzuki plant in Ahmedabad, displaced the Volkswagen Polo as SA’s top-selling passenger vehicle. The country’s well-established and state-supported automotive industry is demanding further protection which would require higher tariffs, which would hammer SA consumers.

Fouché observes that ‘the challenge and the massive opportunity for the next decade is moving the relationship beyond just trading raw commodities and into high-value sectors like critical minerals, counter-seasonal agriculture and digital public infrastructure’.

SA is a beneficiary of the economic boom in India since that country deregulated and opened what had previously been a Soviet-style command economy after 1991. ‘India has moved from the outskirts of the global economy to the centre,’ argues Jennifer Reddy, CEO of SA auditing and professional services company Morar Incorporated. She points out that India became the world’s fourth-biggest economy last year, overtaking Japan. It could soon surpass Germany. ‘This is a matter of timing rather than feasibility. India has momentum,’ says Reddy.

The country has been the fastest-growing major economy since 2021, with annual GDP growth rates from 6–7%. Reddy says that ‘this growth is supported by its vast domestic market, a rising middle class and a youthful workforce. Nearly 70% of India’s GDP is driven by domestic consumption.’

India’s trajectory has been different from China’s, the other industrial giant to emerge in the 21st century. ‘China made a deliberate decision to grow through net exports,’ says CAMM’s Fouché. He suggests that India’s progress has been much more ad hoc.

‘While the Communist Party of China could impose its chosen system from above – as it got ports and logistics lined up and allocated resources – India has had to develop within the much more freewheeling system offered by its constitutional liberal democracy,’ he says. But Reddy makes the point that despite the ad hoc elements and frequent need to compromise, the country’s structural reforms were deliberate, necessary and sequenced. The parallel with SA’s current structural reforms – in the guise of Operation Vulindlela – is obvious.

This does not mean that India is by any means an easy market to get into. ‘India has a significantly less open economy than South Africa,’ says Fouché. He singles out agricultural tariffs as particularly problematic. ‘The punishing 30% tariff on South African citrus makes South African oranges and lemons uncompetitive in India compared to countries with better trade deals [like Chile]’, he says. Other sectors are even more heavily protected, with automobile imports experiencing a tariff of up to 110%. South Africa, by contrast, charges 18–25%.

Non-tariff barriers to the Indian market are also a problem. SA exporters often complain that India is not a single, unified market. ‘Different Indian states have different regulations, sanitary standards and local taxes,’ says Fouché. This makes it very difficult for an SA agricultural exporter to scale up across India, he says.

There has, however, been some progress on this front. SA-grown Hass avocados gained access to the Indian market in 2024 after many years of negotiating phytosanitary requirements. Indian retailers are aggressively pushing the fruit to an increasingly health-conscious middle class. Another recent change is a simplification of Indian phytosanitary requirements to allow pest control via in-transit cold sterilisation rather than the previous requirement for lengthy treatments before shipping. SA apple and pear exporters are likely to be the immediate beneficiaries.

Negotiations for a preferential trade agreement between India and the Southern African Customs Union have been stalled for several years. Fouché suggests this is because ‘domestic South African industries – especially clothing, textiles and plastics – are terrified that lowering tariffs will flood the local market with cheaper Indian goods, leading to job losses’. He says an immediate solution is to put together a ‘positive list’ trade agreement where tariffs are immediately reduced on non-controversial products such as heavy machinery or specific software services.

As the Indian High Commission in South Africa points out, there is a great deal more to the business relationship between the two countries than trade. There are 150 Indian companies in SA, including industrial giants Mahindra, Tata, pharmaceutical manufacturer Cipla and mining house Vedanta. Indian investment is worth some $10 billion and companies from that country employ about 18 000 South Africans.

Tata’s truck assembly line at Rosslyn near Pretoria (operational since 2011) produced 11 000 vehicles last year. Mahindra opened a bakkie assembly line at Dube Tradeport near Durban in 2025 and says the company intends moving from assembling semi-knockdown kits to more advanced manufacturing. In 2019, Vedanta opened a new zinc mine (Gamsberg) near Aggeneys in the Northern Cape. In the pharmaceutical sector, three Indian companies – Cipla, Sun Pharma and Macleods – have manufacturing facilities in SA, while Natco Pharma bought a R4 billion (25.75%) chunk of Bidvest’s Adcock-Ingram operation last year.

Investment by SA companies in India is by no means as diverse. While some corporate giants – Rand Merchant Bank, insurers Sanlam, Old Mutual and Momentum, and South African Breweries – are represented in India, by far the biggest part of the $10 billion SA investment in that country is held by Naspers/Prosus. The SA international infotech giant has backed some of the ‘buzziest’ tech start-ups in India, including payments service firm Pay-U, online retailer Meesho and food delivery firm Swiggy.

In a global market where uncertainty has mutiplied, SA’s relationship with India offers a cornerstone of stability. Both are developing countries and members of the BRICS grouping and can be expected to share mutual understandings and issues. Perhaps more importantly, India’s growth surge in recent years appears to have considerable impetus. This suggests that Indian investors will become a more familiar sight to South Africans, and that efforts by local producers to get into the Indian market could reap rich rewards.

By David Christianson