CAPE TOWN, Aug 13 – India and the five-member Southern African Customs Union (SACU) have agreed to begin negotiations on a preferential trade agreement, reviving efforts to deepen commercial ties between India and southern Africa after previous talks stalled more than a decade ago.
The terms of reference were signed on Wednesday, establishing the framework, objectives and procedures that will guide the negotiations between India and SACU, which comprises South Africa, Botswana, Namibia, Lesotho and Eswatini.
The renewed negotiations follow five rounds of discussions held between 2002 and 2010 that failed to produce an agreement. If concluded, the pact would potentially become India’s first major trade agreement with an African regional bloc, providing Indian companies with preferential access to a market of about 65 million people while creating opportunities for SACU exporters to expand their presence in India.
Unlike a comprehensive free-trade agreement, a preferential trade agreement generally focuses on reducing tariffs on an agreed range of products. The framework is therefore expected to be narrower in scope, with services, investment and intellectual property less likely to form part of the initial agreement.
The talks are also taking place against a backdrop of trade tensions affecting India’s automotive exports to South Africa. Pretoria is considering increasing duties on vehicles imported from India and China to 50% from 25%, a move that could affect an important Indian export category.
Ndiitah Nghipondoka Robiati, executive director at Namibia’s Ministry of International Relations and Trade, said the framework is intended to guide negotiators towards a “balanced, mutually beneficial and development-oriented agreement.”
India’s Trade Minister Piyush Goyal also expressed optimism about the negotiations, saying he expected India and SACU members to “benefit immensely” from an agreement that is fair and balanced. He said he hoped the negotiations could be concluded in the coming months.
India is expected to seek tariff concessions covering automobiles and components, pharmaceuticals, industrial machinery, electrical equipment, chemicals and textiles. Automobiles and auto parts were India’s second-largest export category to SACU after petroleum products, generating shipments worth about $1.7 billion in the fiscal year ended March 2026.
Trade between the two sides is already substantial. Indian exports to SACU reached $7.5 billion in 2025/26, while imports totalled $9.2 billion. South Africa accounted for the overwhelming majority of that trade, with Indian exports to the country reaching $7 billion and imports standing at $8.5 billion.
Beyond tariff reductions, India is also seeking more dependable access to critical minerals from SACU economies. Platinum-group metals, manganese and copper are increasingly important to manufacturing, battery production and clean-energy technologies, making resource security a growing consideration in India’s trade strategy.
For SACU members, improved access to India could provide an additional destination for exports and support diversification beyond traditional trading partners. A preferential framework could also strengthen industrial and supply-chain links between southern Africa and Indian manufacturers.
The negotiations therefore come at a time when both sides are seeking to strengthen trade resilience and secure access to strategic goods. The challenge will be translating the newly established framework into commercially meaningful tariff concessions while balancing the interests of five SACU economies with India’s industrial and export priorities.
