India, S African Union resolve to wrap up trade talks in a year, finalise terms    

The move marks the first trade agreement India is actively negotiating with an African bloc. SACU comprises South Africa, Botswana, Namibia, Lesotho, and Eswatini.

Unlike a full-fledged Free Trade Agreement (FTA), the proposed PTA will focus exclusively on goods, offering lower import duties on a select “positive list” of items.

It is the second attempt by both sides to enter into any kind of trade agreement.  “The signing of the ToR is happening after nearly 20 years since the discussions started.

The Indian cabinet had approved the negotiations in 2006, and as had happened with most other negotiations during that period they were aborted,” Commerce and Industry Minister Piyush Goyal said. “After a gap of 16 years the talks were restarted and have reached the ToR stage,” he added. It will be the first trade agreement that India would negotiate with any African nation.

The ToR was to be signed in May at the India-Africa Forum Summit but the summit itself was postponed due to the evolving health situation and Ebola outbreak concerns in parts of Africa.

The document was signed by Yashvir Singh, Additional Secretary, Department of Commerce who is the chief negotiator from the Indian side and chief negotiator from SACU Executive Director, Ministry of International Relations and Trade, Government of the Republic of Namibia Ndiitah Nghipondoka-Robiati.

The ToR establishes the scope, objectives, procedural framework, and boundaries for trade negotiations between countries. The signing of the ToR comes at a time when South Africa, India’s biggest trade partner in the region, has proposed an increase in duties on automobiles from India and China to 50% from 25%. Automobiles are the single biggest export from India to the region at $ 1.7 billion in 2025-26.

SACU comprises South Africa, Botswana, Namibia, Lesotho, and Eswatini (formerly Swaziland). At present, trade between India and SACU involves around 500 items, and the scope of the PTA in terms of items it would cover will crystallise during negotiations, Commerce Secretary Rajesh Agrawal said.

He said that the PTA would have eight chapters including Trade in Goods, Rules of Origin, Customs Procedures, Trade Facilitation, Technical Barriers to Trade, Trade Remedies and Dispute Settlement.

In the agreement India would seek duty concessions for major export sectors—including automobiles and auto components, pharmaceuticals, machinery, electrical equipment, organic chemicals, and textiles. 

India also aims to ensure a stable supply of key industrial inputs from SACU nations, such as diamonds, platinum group metals, manganese, vanadium, and copper to support domestic manufacturing and green transition goals.

India’s total exports to the SACU region stood at $7.5 billion in 2025-26 while imports were at $9.2 billion. South Africa is India’s biggest trade partner in the region with exports of $7.0 billion and imports of $8.5 billion.

South Africa is followed by Namibia with exports of $349 million and imports of $243 million, and Botswana with exports at $167 million and imports at $446 million. Exports to Swaziland were at $11 million, and imports were also $11 million. Lesotho bought $ 8 million worth of goods from India and exported 0.14 million.

India’s exports to SACU are dominated by petroleum products ($2.1 billion) automobiles ($1.7 billion), pharma ($763 million), and engineering goods and machinery.

The biggest imports by India from SACU include $3.0 billion worth of gold, $2.8 billion worth of coal and coke, $638 million in minerals and ores, $887 million worth of precious and semi-precious stones, and $376 million in copper.