• India and the South African Customs Union (SACU) are focusing on negotiations for a trade agreement.

• A Preferential Trade Agreement (PTA) between India and the South African Customs Union countries will enhance future partnerships as the region has emerged as an important partner for India, both as an export destination and an import source.

What are customs unions?

Customs unions are groups of countries that apply one common system of procedures, rules and tariffs for all or almost all their imports, exports and transiting goods. Usually, countries participating in customs unions share common trade and competition policies.

South African Customs Union

• South African Customs Union (SACU) is a customs union among five southern African countries — Botswana, Eswatini, Lesotho, Namibia, and South Africa. 

• Established in 1910, SACU is the world’s oldest customs union.

• The SACU Secretariat is located in Windhoek, Namibia.

• The economic structure of the Union links the member states by a single tariff and no customs duties between them. 

• The member states form a single customs territory in which tariffs and other barriers are eliminated on substantially all the trade between the member states for products originating in these countries. And there is a common external tariff that applies to nonmembers of SACU.

• These countries are also part of the Southern African Development Community (SADC), together with Angola, the Democratic Republic of Congo, Malawi, Mozambique, Tanzania, Zambia and Zimbabwe; as well as the island nations of Mauritius, Seychelles, Comoros, and Madagascar.

India-SACU trade relations

• Over the past decade, there has been a considerable rise in trade between India and SACU, with South Africa in particular.

• India is an important trading partner for SACU, accounting for 8.9 per cent of total exports of SACU and supplying 5.9 per cent of total imports of SACU in 2021.

• A total of 93.4 per cent of India’s exports to SACU are destined for South Africa, while 92.2 per cent of India's imports from the region originated from South Africa.

• India’s exports to SACU are relatively diversified with refined petroleum, motor vehicles, pharmaceuticals, light vessels, fire floats, floating cranes and other vessels, and unmounted diamonds being the biggest exports. India’s imports from SACU are raw primary or semi-processed commodities.

• The first round of talks for the lndia-SACU PTA took place in Pretoria in 2007, followed by four further rounds in Namibia, New Delhi and Pretoria again until 2010.

• SACU presented a revised text of the PTA as a working document. But discussions were then stalled for the next decade before they were revived in 2020, only to be halted again due to the COVID-19 pandemic.

What are the customs unions in the world?

• Andean Community (CAN)

• Caribbean Community (CARICOM)

• Central American Common Market (CACM)

• East African Community (EAC)

• Economic and Monetary Community of Central Africa (CEMAC)

• Eurasian Customs Union (EACU)

• European Union Customs Union (EUCU)

• EU-Andorra Customs Union

• EU-San Marino Customs Union

• EU-Türkiye Customs Union

• Gulf Cooperation Council (GCC)

• Israel-Palestinian Authority

• Southern Common Market (MERCOSUR)

• Southern African Customs Union (SACU)

• Switzerland-Liechtenstein (CH-FL)

• West African Economic and Monetary Union (WAEMU).

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