3 weeks ago
India, SACU likely to sign trade pact terms this week
India and a group of five African countries called the South African Customs Union are getting ready to sign a special trading agreement.
The group includes South Africa, Botswana, Namibia, Lesotho, and Eswatini.
A Preferential Trade Agreement is a deal where certain goods can be traded with lower taxes, called duties.
The first step, called the Terms of Agreement, is expected to be signed on Wednesday.
India wants lower taxes on cars, medicines, machines, and clothes it sells to these countries.
South Africa, however, has proposed charging a higher 50 per cent tax on cars coming from India and China.
India also wants steady supplies of precious materials like diamonds, copper, and manganese to help its factories.
India sells about $7.5 billion worth of goods to the group and buys about $9.2 billion worth from them.
Ministers from India and South Africa already met in Jaipur, India, to discuss the deal.
If signed, the agreement could make trade between them easier and fairer.
India and the five-nation South African Customs Union (SACU) are expected to sign the Terms of Agreement (ToR) for a Preferential Trade Agreement (PTA) on Wednesday.
A PTA is less ambitious than a free trade agreement, offering lower duties on a specific 'positive list' of items and rarely covering services, investments, or intellectual property.
South Africa has proposed raising duties on automobiles from India and China to 50% from 25%, while automobiles are India's biggest single export to the region at $1.7 billion in 2025-26.
Commerce and Industry Minister Piyush Goyal met South Africa's Minister of Trade and Industry Parka Tau in Jaipur on the sidelines of the BRICS Trade and Industry Ministers' Conference.
India seeks duty concessions in sectors like automobiles, pharmaceuticals, machinery, and textiles, and aims to secure stable supplies of diamonds, platinum group metals, manganese, vanadium, and copper from SACU nations.
India's exports to the SACU region stood at $7.5 billion in 2025-26 while imports were at $9.2 billion.
- Who
- India and the five-nation South African Customs Union (SACU), with Commerce and Industry Minister Piyush Goyal and South Africa's Minister of Trade and Industry Parka Tau leading the talks.
- What
- The two sides are expected to sign the Terms of Agreement (ToR) for a Preferential Trade Agreement that would give lower duties on a specific list of items.
- Where
- India and the SACU region; the ministerial discussions were held in Jaipur, India.
- When
- Wednesday, following a Saturday meeting between the ministers on the sidelines of the BRICS Trade and Industry Ministers' Conference.
- Why
- To boost bilateral trade, secure duty concessions for Indian exports like automobiles and pharmaceuticals, and ensure stable supplies of critical minerals and industrial inputs.
India's Stance
South Africa's Stance
Automobile import duties
India's Stance
India wants duty concessions for automobiles and auto components, its biggest single export to the region at $1.7 billion in 2025-26.
South Africa's Stance
South Africa has proposed raising import duties on automobiles from India and China to 50% from 25%, which would directly affect India's top export to the region.
Trade balance and tariff relief
India's Stance
India exported $7.5 billion to SACU against imports of $9.2 billion in 2025-26 and is seeking concessions across major export sectors including pharma, machinery, organic chemicals, and textiles.
South Africa's Stance
South Africa, India's biggest trade partner in the region with $8.5 billion in exports to India, is pursuing higher duties on Indian and Chinese automobiles rather than broader duty relief.
Key facts
- Agreement
- Terms of Agreement (ToR) for the India-SACU Preferential Trade Agreement
- Expected signing
- Wednesday
- SACU members
- South Africa, Botswana, Namibia, Lesotho, Eswatini
- India's exports to SACU (2025-26)
- $7.5 billion
- India's imports from SACU (2025-26)
- $9.2 billion
- India's biggest export to the region
- Automobiles, $1.7 billion in 2025-26
- Proposed South African auto duty
- 50%, up from 25%, on automobiles from India and China
- India's biggest regional partner
- South Africa ($7.0 billion exports, $8.5 billion imports)
Sources
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