India-SACU Proposed Preferential Trade Pact To Help Boost Two-Way Investments: South African Envoy

The proposed preferential trade agreement (PTA) between India and SACU group would help boost two-way commerce and investments between New Delhi and South Africa, South African High Commissioner to India Anil Sooklal said.

Sooklal said the country's engagement with India has evolved into a broad-based partnership covering trade, investment, technology, skills and development cooperation.

He said the proposed PTA has "tremendous scope" to significantly expand trade and investment between the two countries, creating new opportunities for businesses and helping both economies flourish.

On August 12, India and SACU group signed terms of references (ToRs) for launching negotiations for a PTA. ToRs sets out broad parameters for trade pact talks.

The five members of SACU (South African Customs Union) are Botswana, Eswatini (formerly Swaziland), Lesotho, Namibia and South Africa.

Unlike a free trade agreement, which typically covers the widest possible range of goods, a PTA grants duty concessions on a specified list of products. PTAs also generally exclude trade in services.

According to India-South Africa Business Forum, the proposed agreement is expected to provide greater market access and create new opportunities in sectors such as minerals, manufacturing, agriculture, fertilisers, food security, services and skilled and development cooperation.

Bilateral trade between India and South Africa currently stands at USD 18.01 billion, with the two countries looking to deepen economic engagement and move beyond a largely buyer-seller relationship, they said.

Speaking at Wednesday's forum, MP Vikramjit Singh Sahney, a member of the BRICS Business Council, said the proposed PTA could give a major boost to trade and investment between the two countries.

"The agreement could become a transformational step in taking the economic partnership between India and South Africa to the next level," Sahney said.

He added that the historical ties between the two countries, rooted in the shared legacies of Mahatma Gandhi and Nelson Mandela, should now be translated into a stronger economic partnership.

The proposed PTA could help expand cooperation in manufacturing, technology, agriculture and services while creating opportunities for joint investments and greater integration of supply chains, according to the forum organisers.

The India-South Africa Business Forum was organised by the Confederation of Indian Industry and South Africa's Department of Trade, Industry and Competition on the sidelines of the BRICS Summit.

BRICS is a major international group of emerging economies. It works to increase the voice of developing nations and shape a fair global order.

This year's summit will be held on September 12 and 13 in New Delhi.

South Africa has been seeking to address its trade imbalance with India by promoting higher-value exports, investment partnerships and greater market access.

A South African business delegation is also attending the BRICS Business Council and Business Forum meetings in New Delhi on September 10 and 11, ahead of the 18th BRICS Summit.

The South African BRICS Business Council has identified advanced manufacturing, pharmaceuticals, digital services, agro-processing and renewable energy as key areas for expanding economic cooperation with India.

South Africa's exports to India have traditionally been dominated by commodities such as coal, manganese and chemical wood pulp, while its imports from India include petroleum products, vehicles, pharmaceuticals and machinery.