India sets sail to add more trade muscle as it signs PTA terms with SACU

India has initiated trade negotiations with the Southern African Customs Union (SACU) by signing terms of reference (ToRs) on Wednesday. This move aims to establish a preferential trade agreement (PTA) that would provide tariff relief for exports such as automobiles, pharmaceuticals, and industrial machinery. The pact is an attempt to revive stalled trade talks between India and the SACU group, which consists of South Africa, Botswana, Namibia, Lesotho, and Eswatini.

The terms of reference were signed as the first step to set the framework and scope of negotiations for the proposed trade pact. Commerce Minister Piyush Goyal highlighted the significance of this development, stating that it would strengthen India-South Africa trade engagement and explore opportunities for cooperation in critical sectors like critical minerals, pharmaceuticals, and manufacturing.

Bilateral trade between India and SACU has been declining, with India's trade deficit with the region reaching USD 1.55 billion in the fiscal year 2024-25. South Africa, in particular, remains India's largest trading partner within the SACU group. However, India's exports to South Africa have been primarily comprised of vehicles, components, transport equipment, drugs, pharmaceuticals, engineering goods, footwear, dyes, intermediates, chemicals, textiles, rice, and gems and jewelry.