India and the Southern African Customs Union have formally revived negotiations for a preferential trade agreement, reopening a process that stalled more than 15 years ago. A successful deal could reduce tariffs, expand regional exports and connect five Southern African economies more closely with one of the world’s fastest-growing major markets.
Five African countries enter the negotiations
The Southern African Customs Union, known as SACU, comprises South Africa, Botswana, Namibia, Lesotho and Eswatini. Representatives from India and the bloc have signed terms of reference defining the objectives, scope and procedures for the new negotiations.
The move follows five unsuccessful rounds of talks held between 2002 and 2010. Negotiations are expected to begin within a month, with both sides reportedly aiming to complete the process within one year.
If concluded, the agreement could become India’s first major trade pact with an African regional bloc and would cover a combined Southern African market of approximately 65 million people.
Preferential agreement targets selected products
The proposed arrangement would be narrower than a comprehensive free trade agreement. It would principally reduce or remove customs duties on an agreed list of goods rather than extensively covering services, investment and intellectual property.
India is expected to seek improved access for automobiles, vehicle components, pharmaceuticals, industrial machinery, electrical equipment, chemicals and textiles. Petroleum products currently represent India’s largest export category to SACU, followed by automobiles and components, which were worth about $1.7 billion during the financial year ending in March 2026.
However, greater access for Indian manufactured goods could create competitive pressure for Southern African producers. South Africa is already considering increasing duties on imported vehicles from India and China from 25 per cent to 50 per cent as it seeks to protect domestic manufacturing and employment.
African exporters could gain access to a vast market
For SACU members, the principal opportunity lies in expanding exports to India and diversifying beyond traditional markets in Europe, China and the United States.
India is seeking more dependable access to Southern Africa’s critical minerals, including platinum-group metals, manganese and copper. These resources are essential for vehicle manufacturing, batteries, renewable-energy equipment and other clean technologies.
The challenge for African negotiators will be securing more than increased exports of unprocessed minerals. A development-focused agreement could encourage investment in local refining, mineral processing and manufacturing, allowing SACU countries to retain more value and create skilled employment within the region.
Existing trade shows considerable imbalance
India exported goods worth approximately $7.5 billion to SACU during the 2025–26 financial year while importing about $9.2 billion. South Africa accounted for most of this commerce, receiving $7 billion of Indian exports and supplying goods worth $8.5 billion in return.
The figures demonstrate the commercial importance of South Africa but also underline the risk that smaller SACU economies could receive fewer benefits. Botswana, Namibia, Lesotho and Eswatini will need improved market access for their own products if the agreement is to produce balanced regional growth.
A test of Africa’s wider trade strategy
The negotiations arrive as African governments attempt to strengthen regional integration through the African Continental Free Trade Area. A coordinated SACU approach could improve bargaining power and provide a model for future agreements between India and other African blocs.
The economic potential is substantial, but the final outcome will depend on product coverage, rules of origin and protections for vulnerable industries. If carefully structured, the pact could strengthen investment, industrial development and South–South trade. If focused mainly on lowering tariffs for imported manufactured goods, its benefits could be distributed unevenly.
Newshub Editorial in Africa – 13 August 2026
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