India and the five-member SACU have signed terms of reference to restart negotiations for a preferential trade agreement.
Key facts
- •The SACU bloc consists of South Africa, Botswana, Namibia, Lesotho, and Eswatini.
- •India exported $1.7 billion worth of automobiles and auto parts to the region in the fiscal year ended March 2026.
- •The agreement was signed by Ndiitah Nghipondoka Robiati of Namibia and Yashvir Singh of India's trade ministry.
- •The proposed pact would provide Indian companies access to a market of approximately 65 million people.
- •India's total trade with the bloc in 2025/26 included $7.5 billion in exports and $9.2 billion in imports.
India and the Southern African Customs Union (SACU) signed terms of reference on Wednesday, August 12, 2026, to revive negotiations for a preferential trade agreement. The move follows five previous rounds of talks between 2002 and 2010 that failed to produce a deal. The agreement aims to establish the scope and procedures for future negotiations, with India seeking lower tariffs on key exports including automobiles, pharmaceuticals, and industrial machinery.
By the numbers
Scope of the Proposed Agreement
The terms of reference outline the objectives for a preferential trade pact, which typically focuses on reducing duties on a specific list of products rather than covering services, investment, or intellectual property. Indian officials are seeking concessions for textiles, chemicals, electrical equipment, and auto parts. Additionally, India is looking to secure more reliable access to critical minerals from SACU members, such as copper, manganese, and platinum-group metals, which are essential for clean energy and battery manufacturing.
Trade Context and Economic Impact
In the fiscal year ending March 2026, India’s total exports to the SACU bloc—comprising South Africa, Botswana, Namibia, Lesotho, and Eswatini—reached $7.5 billion, while imports totaled $9.2 billion. South Africa represents the majority of this trade. The negotiations occur as South Africa considers increasing duties on automobile imports from India and China from 25% to 50%. Indian Trade Minister Piyush Goyal expressed hope that a final agreement could be reached in the coming months.
Timeline
- 2002-2010India and SACU held five rounds of trade negotiations that ended without a deal.
- March 2026The fiscal year ended with India's exports to SACU totaling $7.5 billion.
- August 12, 2026India and SACU signed terms of reference to revive trade pact talks.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by The Hindu.
