India-SACU sign terms of reference for PTA

On Wednesday, India signed terms of reference (ToRs) with the Southern African Customs Union (SACU) to commence negotiations for a preferential trade agreement (PTA), aiming to secure tariff relief for exports such as automobiles, pharmaceuticals, and industrial machinery. This development rekindles trade discussions between India and the SACU group, consisting of South Africa, Botswana, Namibia, Lesotho, and Eswatini, following a hiatus after five rounds of talks between 2002 and 2010.

Commerce Minister Piyush Goyal highlighted the signing of ToRs as a crucial first step to establish the framework and scope of these negotiations. The agreement aims to strengthen India-South Africa trade relations and open avenues for cooperation in critical minerals, pharmaceuticals, and manufacturing sectors. SACU comprises five member countries - South Africa, Botswana, Namibia, Lesotho, and Eswatini.

Notably, South Africa remains India's largest trading partner. However, bilateral trade between India and SACU has faced a decline, with total trade decreasing by 13.55% to US$ 15.56 billion in 2025-26, down from US$ 18 billion in the previous fiscal year. India's trade deficit with SACU stands at US$ 1.55 billion.

India exports a range of goods to South Africa, including vehicles and components, transport equipment, drugs, pharmaceuticals, engineering goods, footwear, dyes and intermediates, chemicals, textiles, rice, and gems and jewellery. Conversely, India imports gold, steam coal, copper ores and concentrates, phosphoric acid, manganese ore, aluminium ingots, and other minerals from South Africa.

Similarly, India exports diamonds to Botswana, while Botswana imports precious stones such as diamonds, alongside machinery, iron and steel, pharmaceuticals, and precious stones from India. The PTA negotiations aim to expand India's exports in the pharmaceuticals, medical devices, tyres, agricultural equipment, digital technology, and textiles sectors.