The Indian Hotels Company [Get Quote], which operates under the Taj brand, is showing interest in South Africa, which has been witnessing an increased inflow of Indian tourists.

"IHC is in negotiations with the Kwazulu-Natal provincial government to have a presence in the province. The hotel could attract Indian tourists  by setting up shop here. The local population is a mix of English, Indian and  South Africans," said James Seymour, general manager, tourism information services of Kwazulu Natal province.

Durban is the capital of the Kwazulu Natal province, which has the largest concentration of people of Indian origin.

"At IHC, we are continuously looking for opportunities as part of our international expansion plans, covering the key gateway cities and leisure destinations," said Raymond Bickson, managing director, Indian Hotels Company.

IHC has earmarked an investment of Rs 565 crore for acquisitions. Tata Group chairman Ratan Tata had announced at the company's last annual general meeting that out of this kitty, Rs 500 crore would be utilised for expansion and the balance for upgrading existing properties.

A senior official representing the province of Western Cape confirmed the negotiation between the government authorities and the Tata group company. Cape Town is the capital of Western Cape. Both of them added that the talks were at initial stages. IHC officials were not available for comments.

The representatives of South Africa, who were in Mumbai on Monday to participate at a workshop to promote tourism in the country, said Taj would be the first Indian hotel group to operate in South Africa.

The Tata group operates one hotel in Zambia. They added that IHC was weighing the options of either entering the country through an acquisition or setting up a new hotel.

IHC had acquired W Hotel, a 104 room hotel in Sydney, Australia for nearly Rs 125 crore a couple of months ago.

Established in 1903, Taj Hotels operates 56 hotels in 39 locations across India with an additional 18 international hotels in Maldives, Mauritius, Malaysia, Seychelles, Australia, UK, US, Bhutan, Sri Lanka, Africa and the Middle East.

In 2005, about 37,000 Indians visited South Africa. The South Africa Tourism Board expects the inflow to double in the next 2-3 years. Last year, airfares to South Africa fell down by 37 percent and the number of flights doubled to 29 per week.