Trade Briefing 11.indd

This briefing by the South African Institute of International Affairs (SAIIA) examines the proposed preferential trade agreement (PTA) between the Southern African Customs Union (SACU) and India. It details the economic rationale, negotiating interests, and potential challenges of the deal, while considering its place within the broader IBSA (India, Brazil, South Africa) Dialogue and the possibility of a future trilateral free trade agreement.

• The governments of India and the Southern African Customs Union (SACU)—comprising South Africa, Botswana, Lesotho, Swaziland, and Namibia—aimed to conclude a preferential trade agreement (PTA) by the end of 2006 to expand trade relations.
• A significant tariff imbalance exists between the two partners; a study found that 55% of South African imports into India faced tariffs over 20%, whereas over 50% of Indian exports to South Africa faced tariffs of less than 10%. The weighted average tariffs were 22.89% in India and 16.35% in South Africa.
• Bilateral trade grew rapidly over a decade, with total trade reaching $2.3 billion in 2002, up from $271 million in 1994, largely driven by Indian imports of gold from South Africa. Despite this, trade remains low, representing just over 1% of total trade for both parties.
• The PTA negotiations are expected to use a 'positive list' approach, where only specifically listed sectors are liberalised. This follows the model of the India–Mercosur agreement (over 600 products) and the SACU–Mercosur deal (2,000 products).
• India's primary offensive interests include the software and IT sector, specifically the movement of technical personnel (Mode 4 of GATS), and textiles. Conversely, India's defensive interests center on agriculture.
• SACU's interests include expanding exports of iron, steel, chemicals, aluminium, and furniture, as well as gaining access to affordable medicines and competitive motor vehicle prices. South Africa specifically seeks more liberalisation for its financial services industry in India.
• Several challenges may hinder the PTA, including a 'perception gap' between business sectors, the need for coordination between IBSA countries' various PTAs, and the requirement for South Africa to reach consensus with its SACU partners rather than dictating terms.
• There have been discussions regarding the creation of a trilateral free trade agreement (FTA) among the IBSA partners (India, Brazil, and South Africa) to further intensify economic co-operation.

APA

South African Institute of International Affairs (n.d.). Trade Briefing 11.indd. https://saiia.org.za/wp-content/uploads/2008/11/Trade-Briefing-11.pdf

Chicago

South African Institute of International Affairs. Trade Briefing 11.indd. n.d. https://saiia.org.za/wp-content/uploads/2008/11/Trade-Briefing-11.pdf.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Trade Briefing 11.indd |url=https://saiia.org.za/wp-content/uploads/2008/11/Trade-Briefing-11.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairsndtrade, author = {{South African Institute of International Affairs}}, title = {{Trade Briefing 11.indd}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2008/11/Trade-Briefing-11.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }