India and SACU Forge Ahead on Trade Pact, Eyeing Critical Minerals and Pharma

India and the Southern African Customs Union (SACU) are set to sign the Terms of Reference (ToRs) for a Preferential Trade Agreement (PTA) on August 12, 2026, officially kick-starting negotiations for a crucial trade pact. This move, discussed during the BRICS Trade Ministers' meeting, aims to significantly boost economic ties, particularly in vital sectors like critical minerals, pharmaceuticals, and manufacturing. This renewed push comes after a previous attempt to forge a PTA stalled in 2008 due to market access disagreements. The current discussions are especially timely as South Africa, the largest economy within SACU, is considering a sharp increase in automobile import duties, potentially doubling them to 50% from the current 25%, to shield its local manufacturing, a move met with strong opposition from its own auto industry. India, a significant exporter of vehicles and components to the region, views this pact as a way to secure essential critical minerals like lithium and copper from resource-rich SACU members like Namibia, while also expanding its substantial pharmaceutical exports. With the ToRs in place, formal negotiations for the PTA are expected to begin within a month and could conclude within a year. Union Commerce and Industry Minister Piyush Goyal and South Africa Minister of Trade, Industry and Competition Parks Tau have highlighted strengthening trade engagement, especially in critical minerals, pharmaceuticals, and manufacturing. Observers will be watching closely to see how the complexities of South Africa proposed auto duties and India market access demands will be balanced to ensure a mutually beneficial agreement.