India, 5-nation SACU take first step towards preferential trade pact; 8 areas on agenda

India and the Southern African Customs Union (SACU) have signed the Terms of Reference (ToR) for negotiations towards a preferential trade agreement (PTA), setting the stage for formal talks to expand bilateral trade and economic ties.

The ToR were signed here on Wednesday in the presence of Commerce and Industry Minister Piyush Goyal and senior officials from India and the five-member SACU grouping.

Goyal called for a balanced and equitable agreement that would help diversify markets and create opportunities for businesses on both sides.

"India can play an important role in supplying affordable medicines and supporting the development of new talent in the IT sector in the SACU region," Goyal said.

He also said India could help integrate SACU countries into global supply chains in areas where their businesses are competitive or where skills and talent are available or can be developed.

SACU comprises Botswana, Eswatini, Lesotho, Namibia and South Africa.

Goyal said the proposed agreement would provide preferential market access to an already established commercial relationship, with complementarities in sectors including engineering goods and machinery, automobiles, pharmaceuticals, textiles, agriculture and agri-processing.

He urged the negotiating teams to move with urgency towards an early conclusion of the pact.

"What we sign today does not by itself lower a single tariff or clear a single container. Only a final agreement will do that," he said.

ToRs are essentially the negotiating mandate, or roadmap, that sets out what the countries will negotiate and the broad parameters within which negotiations will take place.

Both sides are looking to conclude the negotiations within one year.

Namibia's Executive Director in the Ministry of International Relations and Trade, Ndiitah Nghipondoka-Robiati, described the ToR signing as an important milestone that would provide structure, transparency and predictability to the negotiations.

She said SACU attaches importance to an outcome that takes into account the different levels of development among the parties, particularly the interests and development needs of its least developed countries and small and vulnerable economies.

Commerce Secretary Rajesh Agrawal said the signing was India's first ToR with the African region and noted SACU's importance as the world's oldest customs union.

The proposed PTA will cover eight chapters, including trade in goods and market access; rules of origin and origin procedures; customs procedures and trade facilitation; trade remedies, including a bilateral safeguard mechanism; sanitary and phytosanitary measures; technical barriers to trade; dispute settlement; and legal and horizontal provisions.

The signing of the ToR marks the formal beginning of negotiations aimed at establishing a development-oriented and mutually beneficial preferential trade framework between India and SACU.

The ceremony was attended by Minister of State for Commerce and Industry Jitin Prasada, senior Indian government officials and members of the SACU delegation.