PREVIEW
After agreeing on terms of reference, the two sides are to restart talks within a month with a year’s deadline
India and the five-country Southern African Customs Union (SACU) have set themselves a year’s deadline to conclude a trade deal worth up to US$17 billion in a move that could go some way towards addressing low levels of intra-BRICS trade (AC Vol 65 No 22, Mixed progress on Putin’s agenda).
The move revives talks which collapsed in 2010 after five negotiating rounds between India and SACU, comprising South Africa, Botswana, Namibia, Lesotho and Eswatini. But it is essentially about South Africa and India.
The vast majority of SACU trade with India is by fellow BRIC member South Africa. India’s exports to SACU totalled $7.5bn in 2025/26, while imports stood at $9.2bn. South Africa accounted for $7bn of exports and $8.5bn in imports.
Agriculture will remain largely untouched in the talks – both sides want to subsidise and protect their farmers. Instead, Prime Minister Narendra Modi’s government is seeking more reliable access to critical minerals, including platinum, manganese and copper as well as lower tariffs on its cars and pharmaceuticals (AC Vol 67 No 11, Africa’s minerals drive a global scramble).
There have been recent reports that South Africa is considering raising duties on vehicles from India and China to 50% from 25% in a bid to protect slowing domestic production.
Modi’s government is prioritising trade diversification having struck recent deals with New Zealand and Britain. In January, India concluded a free trade agreement with the European Union that officials in Brussels say is likely to come into force around April 2027.
The EU’s car industry is set to be one of the big winners, after EU officials persuaded India to agree to 250,000 European car exports per year at a tariff rate of 10%, while India’s defence and pharmaceutical sectors are likely to see similar gains. Modi is following the same pattern with SACU.
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