Can India deliver the goods?

The paper argues that a free trade agreement between Sacu and India is likely to be 'commercially shallow' due to low non-gold trade volumes, conflicting industrial protections in textiles and chemicals, and India's strategic priority of integrating with the Association of South East Asian Nations (Asean). While there is potential complementarity in services, the author notes that India's restrictive investment rules and defensive negotiating style make significant concessions unlikely.

• Non-gold trade between Sacu and India is relatively low and has grown slowly since 1994. While total trade reached approximately $2.5-billion in 2002, the majority of South Africa's surplus consisted of unwrought gold; excluding gold, total trade was only $660-million with a surplus of $106-million.
• A goods-based FTA faces significant political and economic hurdles because both regions have protected industries that would resist tariff concessions. Specifically, India's chemicals and metals industries (with trade-weighted average tariffs of 33% and 22% respectively) and Sacu's textiles and clothing industries (protected by tariffs over 25%) are expected to lobby against the agreement.
• There is potential for mutual benefit in the services sector, particularly in ICT, software, and business process outsourcing from India, and financial services, construction, engineering, and retail from South Africa. However, India's complex and restrictive rules for foreign service providers make liberalisation unlikely for a partner it considers relatively unimportant.
• India's primary strategic trade priority is Asia, specifically integrating with the Association of South East Asian Nations (Asean), using an agreement with Singapore as a test case. Consequently, Sacu is unlikely to secure a comprehensive deal, as India typically employs 'skilful defensive negotiating' to avoid aggressive liberalisation.

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} }