- India and SACU have agreed on eight chapters for a Preferential Trade Agreement
- Formal negotiations between India and SACU are expected to start within a month
- SACU includes South Africa, Botswana, Namibia, Eswatini, and Lesotho
India and the South African Customs Union have tentatively agreed on eight chapters for a proposed Preferential Trade Agreement, with formal negotiations expected to begin within a month, Commerce and Industry Minister Piyush Goyal said.
The two sides have agreed to cover areas including market access, customs procedures, trade remedies, technical barriers to trade, and sanitary and phytosanitary standards. More chapters could be added as discussions progress.
Both sides are targeting the conclusion of negotiations within a year, although officials are looking to complete the process sooner.
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The South African Customs Union, or SACU, comprises South Africa, Botswana, Namibia, Eswatini and Lesotho. The bloc represents around $500 billion in combined economic output.
Goyal said the agreement would mark the beginning of a larger economic relationship with the African Union. "Deal is happening better late than ever," he said, noting that India had approved trade talks with the bloc as far back as 2006.
India is already the second-largest supplier to SACU countries. The proposed pact is expected to explore opportunities in sectors such as affordable healthcare and medicines, information technology, talent and supply chains. India is also seeking reciprocity from SACU in dealing with sensitive trade issues.
According to an NDTV Profit reporter, automobiles and auto parts, pharmaceuticals, coal and coal briquettes, gold and paper pulp are among the key products traded between India and the SACU bloc.
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Bilateral trade currently stands at around $18-20 billion, with India running a slight trade deficit with the bloc. Both sides expect the trade agreement to boost bilateral commerce by 50-60%.
The overall trade basket remains relatively small, with around 500 items accounting for the bulk of bilateral trade between the two sides.
A Preferential Trade Agreement is generally seen as a stepping stone towards a more comprehensive Free Trade Agreement. The upcoming negotiations will therefore be closely watched for the scope of tariff concessions and market access offered by both sides.
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