India, SACU Sign Terms of Reference for Trade Pact Talks

India and the five-member Southern African Customs Union signed the Terms of Reference for negotiations on a Preferential Trade Agreement at Vanijya Bhawan in New Delhi on 12 August 2026. The Southern African Customs Union comprises South Africa, Namibia, Botswana, Lesotho and Eswatini.

Southern African Customs Union

The Southern African Customs Union, or SACU, is a customs union in southern Africa and is the world’s oldest customs union, established in 1910. Its members share a common external tariff and a common customs area for trade with non-members.

Preferential Trade Agreement

A Preferential Trade Agreement is a trade arrangement in which participating economies reduce or eliminate tariffs on a selected list of goods. It differs from a comprehensive free trade agreement because it usually covers a positive list of products and may not include services, investment or intellectual property in the initial phase.

Negotiation Framework and Coverage

The proposed India-SACU pact will initially cover eight chapters, including trade in goods, market access, customs procedures, sanitary and phytosanitary measures, trade remedies, technical barriers to trade, rules of origin and dispute settlement. Sanitary and phytosanitary measures relate to food safety, animal health and plant health, while technical barriers to trade cover product standards, testing and certification.

Important Facts for Exams

• The Southern African Customs Union has five members: South Africa, Namibia, Botswana, Lesotho and Eswatini.
• India and SACU held five earlier rounds of trade negotiations between 2002 and 2010.
• Rules of origin determine the country of origin of a product for tariff treatment under a trade agreement.
• Trade remedies include anti-dumping, countervailing duties and safeguard measures.

India-SACU Trade Context

India-SACU bilateral trade was about US$17 billion in the financial year ending March 2026. India is expected to seek duty concessions for automobiles, auto parts, pharmaceuticals, machinery, chemicals and textiles.