India and the five-nation Southern African Customs Union (SACU) South Africa, Botswana, Namibia, Lesotho and Eswatini have revived efforts to deepen trade ties by signing terms of reference for negotiations on a preferential trade agreement.
Signed on August 12, 2026, the framework sets out the scope, objectives and procedures for negotiations. India is seeking lower tariffs on key exports including automobiles, pharmaceuticals, industrial machinery, electrical equipment, chemicals and textiles.
The talks revive negotiations that stalled after five rounds between 2002 and 2010 without producing an agreement. A successful pact would give Indian exporters preferential access to a regional market of around 65 million people while helping SACU countries expand exports to India.
The proposed agreement would differ from a full free trade agreement by focusing primarily on reducing duties on selected products, rather than covering services, investment, and intellectual property.
The negotiations also come as South Africa considers raising import duties on automobiles from India and China from 25% to 50%. Automobiles and auto parts were India’s second-largest SACU export category after petroleum products, worth $1.7 billion in the fiscal year ending March 2026.
India’s exports to SACU stood at $7.5 billion in 2025/26, compared with imports of $9.2 billion. New Delhi is also seeking more reliable access to critical minerals such as platinum-group metals, manganese and copper, which are important for manufacturing, batteries and clean-energy technologies.
