India and the Southern African Customs Union (SACU) signed the terms of reference for the resumption of their trade negotiations, following several rounds of discussions that remained without agreement between 2002 and 2010. The project aims in particular to reduce certain customs duties on trade in goods.
India and the five SACU members ( Botswana, Namibia, Lesotho, Eswatini and South Africa) signed the terms of reference for negotiations on a preferential trade agreement on 12 August.
The document defines the scope and modalities of the discussions but does not yet constitute a trade agreement or an effective reduction of tariffs. The negotiations took place after a first attempt between 2002 and 2010, which had not been successful.
New Delhi should seek better access to SACU markets for its automobiles and spare parts, pharmaceuticals, machinery, electrical equipment, chemicals and textiles.
Vehicles and components accounted for $1.7 billion in Indian exports to the bloc in the fiscal year ended March 2026. India exported a total of $7.5 billion worth of goods to SACU over the period, compared with $9.2 billion worth of imports.
South Africa concentrates most of these exchanges. It accounted for $7 billion in Indian exports to SACU and $8.5 billion in Indian imports.
Pretoria, however, plans to increase the duties on cars imported from India and China from 25% to 50%, which is a source of tension for Indian exporters.
Discussions should also focus on access to the region's mineral resources, including platinum group metals, manganese and copper, used in industry, batteries and energy technologies.
For SACU, the aim is to expand the opportunities of its five economies to the Indian market, which is one of the main poles of global growth.
If the negotiations succeed, the agreement could be India's first major trade agreement with an African regional bloc. However, the arrangements for market access, the lists of products concerned, the rules of origin and any safeguard measures still need to be defined.
