SACU Preferential Trade Agreement talks: India cites progress on market access in Southern Africa

India is optimistic about the newest talks to finalise the Southern African Customs Union (SACU) Preferential Trade Agreement (PTA), according to the Indian envoy in South Africa. The proposed deal is expected to improve access for Indian goods in South Africa, Namibia, Lesotho, Eswatini, formerly Swaziland, and Botswana. The comments came as talks resumed after a long pause.

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India’s High Commissioner to South Africa, Prabhat Kumar, spoke in Pretoria on Monday at the 2nd annual India-South Africa Business Conclave. The gathering included industry leaders, academics, and policy makers. Kumar linked the renewed negotiations to recent reciprocal leader visits and several business delegation exchanges during the past year.

SACU Preferential Trade Agreement talks and market access

Kumar said India has restarted negotiations for a PTA to lower trade barriers. The aim is to improve market access and build stronger trade links with SACU members. The effort began in 2003, as part of India’s wider plan to deepen economic ties with Africa. However, progress stalled for more than a decade.

A Joint Study Group (JSG) was formed to assess feasibility and scope. It held several meetings in Pretoria, Delhi, and Windhoek over the years. By 2010, SACU submitted a revised PTA text as a working document. Yet talks slowed as both sides struggled to agree tariff concession product lists.

India sought SACU access for textiles and clothing, which SACU treated as sensitive. SACU, led by South Africa, pushed for better entry for agricultural goods and minerals. India responded cautiously on several items due to competition concerns. These differences contributed to the long delay in reaching common ground.

After the COVID-19 pandemic created new economic pressures, India and SACU revived discussions. Senior officials held a virtual meeting to review progress and plan faster steps. Both sides reaffirmed the potential to expand trade beyond its then-current levels. The latest round of engagement follows that renewed push.

Trade diversification for India and SACU PTA context

Kumar said trade diversification guides India’s external economic ties. "Trade diversification is an important mantra for Indias economic relationships. This is evident from the different FTAs that we have signed with the European Union, UK, UAE and Australia,\" Kumar said. Kumar linked this approach to efforts like the SACU PTA talks.

Kumar also pointed to cross-investment between the two countries. India has about 150 companies using South Africa as a base for Africa, with significant investments. Some South African firms have invested in India as well. Kumar urged local business leaders to review opportunities that opened up in India in recent years.

India reforms, FDI and SACU Preferential Trade Agreement opportunities

Kumar said export diversification, including IT and digital services, helped offset pressure on merchandise trade. Kumar linked India’s growth to reforms over the last decade. Measures included corporate tax liberalisation and production incentives. Kumar said these steps improved efficiency, expanded the formal economy, and increased India’s appeal for manufacturing and services.

India allows 100 per cent Foreign Direct Investment in many sectors, Kumar said. \"India is now one of the most open economies in the world, with 100 per cent Foreign Direct Investment allowed in many sectors,\" Kumar said. Kumar listed energy, IT, infrastructure and logistics, manufacturing, and agriculture among these areas.

Kumar said India supported the Global South through several initiatives. \"Through initiatives such as sharing of digital infrastructure, vaccine diplomacy during COVID-19, concessional credit lines to African countries, and partnerships in climate change, India has been both a reliable and responsible partner for the Global South,\" Kumar said. Kumar described these steps as part of wider cooperation.

Kumar invited delegates to the India-Africa Forum Summit later this year in New Delhi. The meeting is expected to bring heads of state from African countries. \"The Summit will discuss and take forward the development agenda between India and the continent of Africa,\" Kumar said. The PTA talks remain a key part of the broader economic engagement.

With inputs from PTI