India signed terms of reference (ToRs) with five-member Southern African Customs Union (SACU) on Wednesday, launching negotiations for a preferential trade agreement, as New Delhi seeks tariff relief for exports including automobiles, pharmaceuticals and industrial machinery.
The move revives trade talks between India and SACU group - comprising South Africa, Botswana, Namibia, Lesotho and Eswatini - after negotiations stalled following five rounds of talks held between 2002 and 2010.
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ET had earlier reported that the ToRs are set to be signed on Wednesday as the initial step sets the framework and scope of the negotiations for the proposed trade pact.
"We discussed the signing of ToRs for India-SACU PTA and early conclusion of negotiations, strengthening the India-South Africa trade engagement and explored opportunities for cooperation in the critical minerals, pharmaceuticals and manufacturing sectors," Commerce Minister Piyush Goyal said in an August 6 post on X after meeting Parks Tau, Minister of Trade, Industry and Competition of South Africa.
Under a preferential trade agreement (PTA), two trading partners provide duty concessions to each other on goods to boost two-way commerce.
New Delhi is seeking more reliable access to SACU supplies of critical minerals, including platinum-group metals, manganese and copper, which are important for manufacturing, batteries and clean energy technologies. The pact could become India's first major trade agreement with an African regional bloc, giving Indian firms preferential access to a market of about 65 million people while helping SACU members expand exports to the world's fastest-growing major economy.
India is also expected to seek duty concessions for automobiles and auto parts, pharmaceuticals, machinery, electrical equipment, chemicals and textiles, trade officials and industry representatives said, as quoted by Reuters.
The terms of reference for the PTA will guide negotiators towards a "balanced, mutually beneficial and development-oriented agreement," Ndiitah Nghipondoka Robiati, executive director at Namibia's Ministry of International Relations and Trade, said after signing the agreement with Yashvir Singh, an additional secretary at the trade ministry.
Goyal expressed confidence, saying that SACU countries and India would "benefit immensely" from a fair, equitable and balanced agreement that he hoped to finalise in the coming months.
India-SACU trade
India's exports to SACU totalled $7.5 billion in FY2025-26, while imports stood at $9.2 billion.
Out of the SACU group, South Africa is India's largest trading partner. The bilateral trade between the two countries dipped by 13.55 per cent to USD 15.56 billion (exports USD 7 billion and imports 8.56 billion) in 2025-26 from USD 18 billion in 2024-25, according to a PTI report. India had a trade deficit of USD 1.55 billion in the last fiscal year.
India exports vehicles and components, transport equipment, drugs and pharmaceuticals, engineering goods, footwear, dyes and intermediates, chemicals, textiles, rice, and gems and jewellery to South Africa.
India largely imports gold, steam coal, copper ores and concentrates, phosphoric acid, manganese ore, aluminium ingots and other minerals from South Africa.
India-Botswana trade rose by 21.26 per cent to USD 614 million (exports USD 167.53 million and imports 446.47 million) in 2025-26 from USD 506.33 million in 2024-25, with New Delhi's trade deficit standing at USD 278.94 million in the last fiscal year.
Diamonds are the majorly traded commodity between the nations as Botswana exports rough diamonds to India, while India's exports include a mix of pharmaceuticals, machinery, iron and steel, electrical equipment, in addition to precious stones such as diamonds.
With the PTA in works, India is looking at opportunities to expand exports in pharma, medical devices, tyres, agricultural equipment, digital technology, and textiles.
Around 30 diamond cutting and polishing companies operate in Botswana, with most owned by Indian diamond firms as part of their global operations.
India's bilateral trade with Namibia rose by 4.32 per cent to USD 593 million (exports USD 349 million and imports 244 million) in 2025-26 from USD 568.4 million in 2024-25, with trade surplus standing at USD 105.24 million in the last fiscal year.
The mining sector is an area of mutual interest between India and Namibia, as the country is rich in uranium, diamonds, copper, phosphates and other minerals.
Indian expertise in sectors such as IT, pharmaceuticals, renewable energy and SMEs is attracting interest from the Southern African nation.
India’s trade with Eswatini fell 54.6% to $23.69 million in 2025-26, comprising exports of $11.81 million and imports of $11.89 million, from $52.18 million in 2024-25.
India’s key imports from the country include iron and steel, oil and seeds, and fruits, while major exports comprise pharmaceuticals, rubber, plastic and machinery.
Two-way trade between India and Lesotho declined 25% to $8.47 million in 2025-26, including exports of $8.33 million and imports of $0.14 million, from $11.28 million in 2024-25.
India’s major imports from Lesotho include iron and steel, oil and seeds, and fruits, while exports mainly consist of pharmaceuticals, rubber, plastic and machinery.
