Can India deliver the goods?

This research paper examines the potential for a free trade agreement (FTA) between the Southern African Customs Union (Sacu) and India, arguing that the agreement is likely to be 'commercially shallow' due to low non-gold trade volumes, competing industrial interests, and India's strategic prioritization of Asia.

• Trade between Sacu and India is heavily skewed by gold; while total trade reached approximately $2.5-billion in 2002, non-gold goods trade was only $660-million, with South Africa's surplus dropping from $1.8-billion to $106-million when gold is excluded.
• The author suggests that an FTA would likely be 'commercially shallow' because tariff concessions would either cause significant economic and political problems or fail to meaningfully change trade patterns. This is driven by protected industries in both regions, such as India's chemicals (33% average tariff) and metals (22% average tariff), and Sacu's textiles and clothing (over 25% average tariff).
• While there is potential for mutual benefit in services—specifically India's strengths in ICT, software, and business process outsourcing versus South Africa's strengths in financial services, construction, engineering, and retail—India's complex and restrictive rules for foreign service providers make liberalisation unlikely.
• India prioritizes integration with Asia, specifically the Association of South East Asian Nations (Asean), and uses its agreement with Singapore as a test case. In contrast, Sacu is viewed as a gateway to sub-Saharan Africa, similar to how Mercosur serves as a ticket to South America, though India's agreement with Mercosur is limited to 548 product lines and excludes services or investment.

APA

South African Institute of International Affairs (2008). Can India deliver the goods? https://saiia.org.za/research/can-india-deliver-the-goods/

Chicago

South African Institute of International Affairs. Can India deliver the goods? 2008. https://saiia.org.za/research/can-india-deliver-the-goods/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Can India deliver the goods? |date=23 April 2008 |url=https://saiia.org.za/research/can-india-deliver-the-goods/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2008can, author = {{South African Institute of International Affairs}}, title = {{Can India deliver the goods?}}, institution = {South African Institute of International Affairs}, year = {2008}, month = apr, url = {https://saiia.org.za/research/can-india-deliver-the-goods/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }