Loading…
India and the five-member Southern African Customs Union signed the Terms of Reference for negotiations on a Preferential Trade Agreement at Vanijya Bhawan, New Delhi, on 12 August 2026.
SACU comprises South Africa, Namibia, Botswana, Lesotho and Eswatini, and is the world's oldest customs union, established in 1910 and headquartered at Windhoek in Namibia.
The proposed pact will initially cover eight chapters: trade in goods, market access, customs procedures, sanitary and phytosanitary measures, trade remedies, technical barriers to trade, rules of origin and dispute settlement.
India and SACU had already held five rounds of trade negotiations between 2002 and 2010 before the process lapsed; the Terms of Reference restart it on a defined footing.
India-SACU bilateral trade was about US$17 billion in the financial year ending March 2026, and India is expected to seek duty concessions for automobiles, auto parts, pharmaceuticals, machinery, chemicals and textiles.
A Preferential Trade Agreement is the shallowest form of trade arrangement: participating economies cut or remove tariffs on a selected positive list of goods, and services, investment and intellectual property are often left out of the first phase. A Free Trade Agreement goes further, eliminating tariffs on substantially all trade between the members while each member keeps its own tariff schedule towards the rest of the world. A customs union goes further still - members not only free trade among themselves but also adopt a common external tariff and a common customs area for trade with non-members. SACU is at that third level, which is why India negotiates with the bloc as a single counterparty rather than with each of the five countries separately.
Simple Analogy: A PTA is a discount on selected items; an FTA removes the price barrier across the shop; a customs union means the shops also agree to charge outsiders the same price at the door.
Customs union of five southern African states operating a common external tariff and a common customs area; the oldest existing customs union in the world
GS Paper 2 > India and its bilateral and regional groupings; GS Paper 3 > Effects of liberalisation, international trade
General Awareness > International Organisations and Current Affairs
General Awareness > International trade and economic groupings
When was the Duty-Free Tariff Preference (DFTP) Scheme for Least Developed Countries (LDCs) announced by India?
Answer: 2008
A trading bloc whose members free trade among themselves and also apply a common external tariff to non-members - SACU is the oldest existing example.
An arrangement in which members cut or remove tariffs on a selected positive list of goods, usually without covering services or investment at the outset.
Criteria determining a product's country of origin, used to decide whether it qualifies for preferential tariff treatment under an agreement.
Measures such as anti-dumping duties, countervailing duties and safeguards that a country may use to counter injurious import surges or unfair pricing.
Sanitary and phytosanitary measures - rules on food safety, animal health and plant health that goods must satisfy to enter a market.