Aug 13, 2026 | Updated 09:01 AM GMT+5:30
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India and the Southern African Customs Union signed Terms of Reference on Wednesday (12 August) to launch negotiations for a preferential trade agreement, reviving talks that stalled after five rounds between 2002 and 2010.
The framework sets the scope and procedures for discussions between India and the five-member bloc comprising South Africa, Botswana, Namibia, Lesotho and Eswatini.
Commerce and Industry Minister Piyush Goyal announced that both sides expect to begin formal negotiations within a month and aim to conclude talks within a year.
The potential agreement could become India’s first major trade pact with an African regional bloc, providing preferential access to a market of approximately 65 million people while helping SACU members expand exports to the world’s fastest-growing major economy.
India’s exports to SACU totalled $7.5 billion in 2025-26, while imports stood at $9.2 billion.
Automobiles and auto parts represented India’s second-largest export category to the customs union after petroleum products, with shipments worth $1.7 billion in the fiscal year ended March 2026.
South Africa accounted for the majority of bilateral trade, with Indian exports of $7 billion and imports of $8.5 billion.
New Delhi seeks tariff relief for exports including automobiles, pharmaceuticals and industrial machinery.
The agreement is also expected to provide India more reliable access to SACU’s supplies of critical minerals, including platinum-group metals, manganese and copper, which are essential for manufacturing, batteries and clean energy technologies.
The preferential trade agreement covers eight chapters including trade in goods, rules of origin, customs procedures, trade remedies, sanitary measures, technical barriers to trade, dispute settlement and legal provisions.
Unlike a comprehensive free trade agreement, the preferential pact will reduce duties on an agreed list of products and is less likely to encompass services, investment or intellectual property.
