India, S African customs union ink terms to launch trade talks

New Delhi: India and the Southern African Customs Union (SACU) signed the Terms of Reference (ToR) on Wednesday to commence negotiations for a Preferential Trade Agreement (PTA), nearly two decades after preliminary discussions. The agreement will encompass eight chapters, including trade in goods, rules of origin, customs procedures, dispute settlement, and sanitary and phytosanitary measures.

Commerce and Industry Minister Piyush Goyal stated that the pact should be finalized within the next few months, while ensuring a balanced approach that respects sensitive sectors of both parties. Formal negotiations are expected to begin within a month. SACU members include Namibia, Botswana, Eswatini, Lesotho, and South Africa, making it the world's oldest customs union. This marks India's first ToR signing with an African region.

Goyal emphasized that India would refrain from touching sensitive issues, expecting reciprocity from SACU. He added that the pact should be "balanced, practical," and initially focus on "low-hanging fruits" where both sides can complement each other. The Indian Cabinet approved PTA negotiations in 2006, but the talks were halted after a few rounds in 2010.

India, which is the second-largest supplier to the SACU group, has companies operating in various sectors, such as health, pharma, IT, automotive manufacturing, and infrastructure development. Goyal highlighted that India can supply affordable medicines and create new talent in Africa. Commerce Secretary Rajesh Agrawal noted that the agreement could expand to include more chapters if both sides agree to broaden its scope.

Both India and SACU are complementary regions, and Goyal expressed optimism that negotiations would commence soon and proceed on a fast-track basis. He emphasized that in the face of global trade uncertainty, timely economic partnerships can provide a strong signal to global trade. India has already extended unilateral tariff preferences to African Least Developed Countries, and the PTA with SACU will further strengthen India's trade partnership across sectors such as automotive, pharma, critical minerals, and energy.