Negotiations Begin for Trade Agreement Between India and SACU

Negotiations for a Preferential Trade Agreement (PTA) between India and the Southern African Customs Union (SACU) have commenced. According to a statement from the Government of India, both parties signed the terms of reference for these negotiations on August 12. This marks the first time India is negotiating a trade agreement with a regional bloc in Africa.

Anil Suklal, South Africa's High Commissioner to India, stated in an interview with Mint that if this agreement with SACU is completed within the next year, it could serve as a model for more ambitious trade agreements between India and the entire African continent. Experts also believe that the success of this agreement will provide a foundation for a comprehensive India-Africa economic framework.

The proposed PTA is expected to cover various subjects such as market access for goods, rules of origin, customs procedures, trade facilitation, sanitary and technical standards, trade remedies, and dispute settlement. Commerce and Industry Minister Piyush Goyal stated that India could play a significant role in providing affordable medicines and developing new talent in the Information Technology (IT) sector within the SACU region.

Regarding trade relations, according to data from the Ministry of Commerce, bilateral trade between India and South Africa in FY26 decreased by 13.55% to $15.56 billion, compared to $18 billion in 2024-25. Similarly, India's total trade with SACU in FY26 decreased by 12.2% to $16.80 billion, down from $19.14 billion in FY25. However, South Africa remains India's largest trading partner within SACU, accounting for $15.56 billion, or 92.63%, of the total $16.8 billion trade in FY26.

This agreement is strategically important for India as it could provide access to critical minerals such as platinum, manganese, and copper through South Africa and SACU. These minerals are essential for clean energy, electronics, and defense manufacturing, and major economies are currently competing to secure the supply chains for these minerals. On the other hand, for Pretoria, close ties with New Delhi provide a path to diversify economic partnerships beyond Western markets and China, attract investment, and increase industrial and technological cooperation.

Anil Suklal further mentioned that South African President Cyril Ramaphosa has invited Prime Minister Narendra Modi to visit the country next year as part of the 70th anniversary celebrations. Prime Minister Modi has accepted this invitation and will be accompanied by a large business delegation. This visit is expected to give new momentum to the trade negotiations with SACU. Suklal added that during the recent presidential visit, South Africa sent its largest-ever trade delegation to India, comprising around 120 industrialists. This delegation participated in four dedicated bilateral trade meetings between India and South Africa, in addition to BRICS-related events. According to Suklal, India is currently interested in energy production and distribution opportunities available in South Africa.

New Delhi is currently establishing itself as a leading voice of the Global South. South Africa is a key member of BRICS, while India will hold the presidency of the group in 2026 and will host the 18th BRICS Summit in New Delhi in September.