Johannesburg: India is confident about the latest round of talks aimed at finalising the Southern African Customs Union (SACU) Preferential Trade Agreement (PTA), the Indian envoy here has said.
The agreement will give market access for many Indian goods to South Africa, Namibia, Lesotho, Eswatini (formerly Swaziland) and Botswana.
India’s High Commissioner to South Africa Prabhat Kumar made the remarks at a gathering of captains of industry, academics and policy makers in Pretoria on Monday at the 2nd annual India-South Africa Business Conclave.
He said these discussions were part of the momentum gained from reciprocal visits between the leaders of the two nations and many mutual business delegation visits in the past year.
“Trade diversification is an important mantra for India’s economic relationships. This is evident from the different FTA’s that we have signed with the European Union, UK, UAE and Australia,” Kumar said.
The High Commissioner said India has restarted negotiations for a PTA which would reduce trade barriers and enhance market access and foster better trade between India and the SACU member countries.
The impetus for a trade arrangement between India and SACU emerged in 2003 as part of India’s broader strategy to deepen economic engagement with Africa, but have been stalled for over a decade now.
A Joint Study Group (JSG) was established to examine the feasibility and potential scope of a trade agreement, followed by a number of meetings in ensuing years in Pretoria, Delhi and Windhoek.
By 2010, SACU presented a revised text of the PTA as a working document, but the negotiation process slowed down considerably as both sides struggled to reach consensus on the list of products for tariff concessions.
India expressed interest in accessing SACU’s market for its textiles and clothing, which SACU deemed highly sensitive sectors. Conversely, SACU, particularly South Africa, sought access for its agricultural products and minerals, facing competitive or sensitive responses from India.
In the wake of the COVID-19 pandemic and its economic challenges, India and SACU revived the PTA discussions. A virtual meeting was held between senior officials to review progress and discuss steps to expedite the process. Both sides reaffirmed the immense potential to expand trade beyond its then-current levels.
“India has some 150 companies that have made South Africa their base for Africa and have made significant investments here. A number of South African companies have also invested in India,” Kumar said as he called on local business leaders to look at the many opportunities that have opened up in India in the last few years.
“Diversification of exports, especially IT and digital services, has helped offset merchandise pressures.
“India’s recent growth cannot be viewed in isolation from its decade-long reforms. Corporate tax liberalisation and production incentives are now compounding into measurable economic outcomes. These reforms have improved efficiency, expanded the formal economy and has expanded India’s attractiveness as a manufacturing and services hub.
“India is now one of the most open economies in the world, with 100 per cent Foreign Direct Investment allowed in many sectors,” Kumar said, singling out energy, IT, infrastructure and logistics, manufacturing and agriculture as some of these sectors.
“Through initiatives such as sharing of digital infrastructure, vaccine diplomacy during COVID-19, concessional credit lines to African countries, and partnerships in climate change, India has been both a reliable and responsible partner for the Global South,” Kumar said.
The diplomat invited delegates to participate in the India-Africa Forum Summit later this year which will bring together the heads of state from African countries in New Delhi.
“The Summit will discuss and take forward the development agenda between India and the continent of Africa,” Kumar said.
