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India and South African nations are expected to conclude a preferential trade agreement by the end of this year, aimed at reducing tariffs on certain items traded between the two sides.
The India—SACU Preferential Trade Agreement (PTA) would enhance economic ties by reducing tariffs on several key products.
“We are actively engaged in negotiations with Southern African Customs Union (SACU) for PTA and have covered 60 per cent of the distance as six rounds of negotiations have been done so far,” Commerce Secretary S R Rao told the CII-Exim Bank Conclave on India Africa Project Partnership here.
Asked if these negotiations are expected to be completed by the end of this year, he said, “We are hopeful.”
The SACU consists of Botswana, Lesotho, Namibia, South Africa, and Swaziland.
Besides, Rao said, India is negotiating a Comprehensive Economic Partnership Agreement (CEPA) with Mauritius.
The PTA is slightly different from the free trade agreement (FTA). In FTA, the two sides reduce or eliminate duties on maximum number of products they trade in, whereas in PTA, the tariffs are not necessarily eliminated, but they are lowered than the countries not party to the agreement.
India is giving more emphasis on new markets including Latin America and Africa for increasing exports.
Rao said India is also exploring the possibility of having such agreements with other African regional communities.
“A Joint Study Group (JSG) has been constituted to examine the possibility of a free trade pact with the 19-nation Common Market For Eastern and Southern Africa (COMESA),” Rao said.
The bilateral trade between India and Africa stood at $70 billion in 2011—12.
Africa’s main exports to India are gold, coal, diamonds and platinum, while its imports from India include auto components and steel.
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