India and the five-nation South African Customs Union (SACU) are expected to sign the Terms of Agreement (ToR) for the proposed Preferential Trade Agreement (PTA) on Wednesday, sources said.
The PTA is less ambitious than a traditional Free Trade Agreement (FTA) but more focused. A PTA gives lower duties on a specific “positive list” of items and rarely includes services, investments, or rules on intellectual property.
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.
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SACU comprises South Africa, Botswana, Namibia, Lesotho, and Eswatini (formerly Swaziland). On Saturday Commerce and Industry Minister Piyush Goyal had met South Africa’s Minister of Trade and Industry Parka Tau on the sidelines of the BRICS Trade and Industry Ministers’ Conference in Jaipur.
Both sides discussed signing the ToR of the India-SACU PTA and early conclusion of negotiations, Goyal posted on X after the meeting. Discussions also focussed on strengthening the India-South Africa trade engagement and opportunities for cooperation in critical minerals, pharma and manufacturing.
Seeking Tariff Relief
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 the biggest trade partner of India in the region with exports of $ 7.0 billion and imports of $ 8.5 billion.
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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 $ 887 million and copper at $ 376 million.
TOPICSSouth AfricaThis article was first uploaded on August ten, twenty twenty-six, at forty-eight minutes past six in the evening. © The Indian Express (P) Ltd