India and the five-member Southern African Customs Union ⁠signed terms of reference on Wednesday (August 12, 2026) to start talks on a preferential trade agreement, as New Delhi seeks lower tariffs on exports including cars, pharmaceuticals and ‌industrial machinery.

The move revives talks between India and SACU, comprising South Africa, Botswana, Namibia, Lesotho and Eswatini, after five rounds ‌of negotiations between 2002 and 2010 ended without a deal.

The ‌pact ⁠could become India’s first major trade agreement with an ⁠African regional bloc, giving Indian companies preferential access to a market of about 65 million people while helping SACU members expand exports to the world’s fastest-growing major economy.

The ​terms of reference set the ‌scope, objectives and procedures for the negotiations. Unlike a comprehensive free trade agreement, a preferential trade pact typically cuts duties on an agreed list of products and is less likely to cover services, ‌investment or intellectual property.

The talks come as South Africa ​considers raising duties on automobiles from India and China to 50% from 25%, threatening a key Indian export.

The terms ⁠will guide negotiators towards a “balanced, mutually beneficial and development-oriented agreement,” Ndiitah Nghipondoka Robiati, executive director at Namibia’s Ministry of International Relations and Trade, said ‌after signing the agreement with Yashvir Singh, an additional secretary at India’s trade ministry.

India’s Trade Minister Piyush Goyal said he was confident SACU countries and India would “benefit immensely” from a fair, equitable and balanced agreement that he hoped to finalise in the coming months.

India is expected to seek duty concessions for automobiles and auto parts, pharmaceuticals, ‌machinery, electrical equipment, chemicals and textiles, trade officials and industry representatives said.

Automobiles and auto ​parts were India’s second-largest export category to SACU after petroleum products, with shipments worth $1.7 billion in the fiscal year ⁠ended March 2026. India’s exports to SACU totalled $7.5 billion in 2025/26, while imports ⁠stood at $9.2 billion. South Africa accounted for most of the trade, with Indian exports of $7 billion and imports of $8.5 billion.

New ‌Delhi is also seeking more reliable access to SACU supplies of critical minerals, including platinum-group metals, manganese and copper, which are ​important for manufacturing, batteries and clean energy technologies.

India will not attempt signing free trade agreements (FTA) with the African continent ‘as of now’, and will instead prioritise commercial ties with the trading blocs and customs unions in the continent, said officials here on Saturday (May 9, 2026). The information was shared by officials as preparations are under way for the upcoming India-Africa Forum Summit (IAFS-IV), where a number of African heads of state and heads of government are expected to attend.

In place of a continental trade pact, India is deepening engagement with customs unions such as the SACU (Southern African Customs Union), which allows duty-free movement of goods within Botswana, Eswatini, Lesotho, Namibia and South Africa. India’s cumulative investment in Africa has reached $80 billion, making it one of the major investors in the continent.

India-Africa trade relations will be a key focus during the fourth India-Africa Forum Summit. The summit which was previously held in 2008, 2011 and 2015, is returning after a gap of over a decade. Officials blamed the disruption caused by the COVID-19 pandemic as one of the main reasons that prevented the summit from being scheduled earlier.

Indian officials have intensified engagements with African counterparts over the past weeks. Earlier this week, Sudhakar Dalela, Secretary (Economic Relations) of the Ministry of External Affairs, met with Mahmoud Ali Youssouf, Chairperson of the African Union Commission, to discuss details of the IAFS-IV. Commerce Secretary Rajesh Agrawal visited Tanzania and Kenya between April 27 and May 1, 2026, to tie up plans for the summit.

The summit will begin on May 28 and will continue till May 31. It will include segments on business, culture, security and defence. Separate sessions are also being scheduled for the Foreign Ministers of the participating countries, along with a leaders’ summit.

The Hindu was told that agriculture, energy, and critical minerals will be in focus as India and Africa are dealing with energy and fertilizer disruptions caused by the war in West Asia. Officials indicated that India will also emphasise security and defence ties with the continent during the summit. The presence of 5,000 peacekeepers in Africa’s conflict hotspots, such as the Democratic Republic of the Congo and South Sudan, will also be highlighted.

The summit is expected to lead to “concrete outcomes” at the level of business initiatives, and a joint statement or a vision statement is also expected.