India and South Africa are looking to a proposed preferential trade agreement (PTA) to widen market access and revive bilateral commerce after trade between the two countries declined sharply in 2025-26. The proposed pact, however, is not a standalone India-South Africa agreement. It is being negotiated with the five-member Southern African Customs Union (SACU), comprising South Africa, Botswana, Namibia, Lesotho and Eswatini.
India and SACU signed the Terms of Reference (ToR) for the negotiations on August 12, formally setting the framework for discussions on the proposed PTA. Unlike a comprehensive free trade agreement, a preferential trade agreement generally provides lower import duties on a selected set of goods. The specific products and tariff concessions will have to be negotiated by both sides. The talks are expected to cover areas including trade in goods, market access, rules of origin, customs procedures, trade remedies, sanitary and phytosanitary measures, technical barriers to trade and dispute settlement.
The renewed push comes as India-South Africa trade has weakened from its earlier level. Bilateral trade declined to $15.56 billion in 2025-26 from around $18 billion in the previous fiscal year. India recorded exports of about $7 billion to South Africa and imports of $8.56 billion during the year, leaving a trade deficit of roughly $1.55 billion. South Africa remains India’s largest trading partner within SACU and accounts for the bulk of India’s commerce with the bloc.
For Indian companies, improved tariff access could create opportunities across automobiles and components, pharmaceuticals, engineering goods, machinery, chemicals, textiles and other manufactured products. India is also seeking stronger access to critical minerals from the region, including platinum-group metals, manganese and copper, which are important for manufacturing, batteries and clean-energy technologies. India exported $7.5 billion worth of goods to SACU in 2025-26, while imports from the bloc stood at about $9.2 billion.
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The business case extends beyond merchandise trade. At the India-South Africa Business Forum in New Delhi, Vikramjit Singh Sahney, MP and member of the BRICS Business Council, pointed to opportunities in minerals, manufacturing, agriculture, food security, fertilizers, services and skilled manpower. The emphasis reflects the broader scope of commercial engagement being discussed by businesses from both countries, particularly in sectors where India has manufacturing and services capabilities and South Africa can offer access to natural resources and regional markets.
“The agreement could become a transformational step in taking the economic partnership between India and South Africa to the next level”, says Sahney.
South African High Commissioner Anil Sooklal says the country’s engagement with India has expanded beyond conventional trade to include investment, technology, skills and development cooperation. A stronger trade framework could therefore provide a more predictable environment for companies seeking to build supply chains, enter new markets or develop partnerships across the two economies.
The proposed PTA also revives a trade negotiation process that had stalled after earlier rounds of discussions between India and SACU from 2002 to 2010, with market-access issues proving difficult to resolve. The latest effort comes at a time when both sides are seeking greater diversification in trade and investment relationships.
The Confederation of Indian Industry and South Africa’s Department of Trade, Industry and Competition organized the business forum alongside BRICS-related events in New Delhi. The discussions indicate that the proposed agreement is being viewed not merely as a tariff exercise but as a potential platform for expanding commercial ties across manufacturing, resources, services and skills. Sahney also called for the historical connection associated with Mahatma Gandhi and Nelson Mandela to be translated into stronger economic cooperation between the two countries.
