India and the Southern African Customs Union (SACU) are set to formally begin negotiations for a proposed Preferential Trade Agreement (PTA), with both sides scheduled to sign the Terms of Reference (ToR) on August 12. The agreement would provide the framework and scope for the upcoming negotiations.
SACU comprises South Africa, Botswana, Namibia, Lesotho and Eswatini. South Africa is India’s largest trading partner within the bloc, making the proposed agreement strategically important for expanding India’s trade presence in southern Africa.
The signing follows discussions between Commerce and Industry Minister Piyush Goyal and South Africa’s Trade, Industry and Competition Minister Parks Tau during the BRICS Trade Ministers’ Meeting in Jaipur. The two sides discussed finalising the ToR and working towards an early conclusion of the negotiations.
Negotiations for an India-SACU trade pact were first initiated in 2008, but progress stalled over market-access issues. The renewed push reflects India’s broader strategy of expanding trade partnerships and securing greater market access for its exporters.
Under a preferential trade agreement, participating countries provide tariff concessions on selected goods, potentially making products more competitive in each other’s markets. The proposed pact could therefore create new opportunities for Indian exporters while strengthening access to the five SACU economies.
India and South Africa are also exploring cooperation in critical minerals, pharmaceuticals and manufacturing, areas that could complement the trade negotiations and deepen economic ties between the two sides.
Bilateral trade between India and South Africa stood at $15.56 billion in FY2025-26, down from $18 billion in the previous financial year. The proposed PTA could help revive trade growth and broaden commercial opportunities between India and the southern African region.
The signing of the ToR is expected to mark a fresh start for the long-delayed negotiations and provide a structured pathway towards a preferential trade agreement between India and SACU.
