Willemien Viljoen, tralac Researcher, discusses the Indian request list in the SACU-India Trade Negotiations

Formal trade negotiations to establish a Preferential Trade Agreement (PTA) between the member states (Botswana, Lesotho, Namibia, South Africa and Swaziland) of the Southern African Customs Union (SACU) and India began in 2008 with the signing of a Memorandum of Understanding (MOU) among the parties. As part of the negotiation process the countries exchanged their respective lists of products of export interest during 2011. In order to consolidate South Africa’s negotiations position on the request list submitted by India, the South African Department of Trade and Industry (Dti) invited economic operators on 25 May 2012 to make submissions regarding their economic sectors of interest included in the list (the Indian request list is available here).

The goal of the trade negotiations is to establish a trade agreement that will boost the current level of trade among the countries. The PTA negotiations currently only include issues pertaining to trade in goods, mainly focused on the reduction of tariffs on those goods of export interest for both regions.

SACU countries mainly export mineral products, base metals, chemical products and precious stones and metals to India, while India mainly exports transport equipment, mineral products, pharmaceuticals and machinery to SACU.

Trade between SACU members and India has been limited. Indian exports to all SACU countries accounted for only 2 percent of India’s global exports in 2010. However, Indian exports to all SACU members increased by 15 percent between 2006 and 2010, while SACU exports to India increased by 41 percent over the same time period. This indicates the potential for enhanced bilateral trade opportunities among the countries.

Table 1 below shows the Indian request list in terms of the number of tariff lines in the request list, the specific tariff lines as a percentage of the total tariff lines and the average tariff for the indicated product categories.

Table 1: Analysis of the Indian request list

S23 descriptions	Number of tariff lines	% of total tariff lines	Average tariff (%)
Live animals, animal products	4	0.4	24.7
Vegetable products	17	1.7	13.0
Animal or vegetable fats & oils	4	0.4	10.0
Food, beverages and tobacco products	64	6.3	14.2
Mineral products	15	1.5	4.1
Chemical products	68	6.7	12.6
Plastic products	152	14.9	12.8
Raw hides	24	2.3	23.8
Wood products	5	0.5	17.0
Paper products	19	1.9	9.5
Textile and clothing	190	18.6	31.1
Footwear	22	2.2	27.5
Non-metallic minerals	30	2.9	13.1
Precious stones and metals	6	0.6	20.0
Base metals	127	12.4	13.9
Machinery	177	17.3	13.1
Transport equipment	73	7.1	18.2
Specialised equipment	3	0.3	16.7
Miscellaneous manufactured articles	22	2.2	19.1

Source: SACU Tariff Book (2012); MacMap (2012), author’s calculations

• The Indian request list consists of 1022 tariff lines at either the HS6 or HS8 level of product classification.

• The main product categories of export interest for India are textiles and clothing, machinery, plastic products and base metals accounting for 18.6 percent, 17.3 percent, 14.9 percent and 12.4 percent, respectively of the total tariff lines in the request list.

• The simple average tariff for each product category shows that the products with the highest average tariff applied by SACU on Indian imports are textiles and clothing (31.1%), footwear (27.5%), live animals and animal products (24.7%), raw hides (23.8%) and precious stones and metals (20%).

• Most of the tariff lines cover low to medium applied tariffs (ranging between 0% and 20%) with only a few tariff lines beyond 20 percent.

• The products in the Indian request list with the highest applied tariff include not stemmed and stripped tobacco (HS240110 with and equivalent tariff of 85%), certain worn coats (HS 63090013, applied tariff of 60%) and other worn clothing (HS 63090017, applied tariff of 60%).

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Sources:

Dti (www.dti.gov.za)

MacMap (www.macmap.org)

TradeMap (www.trademap.org)

SACU Tariff Book (2012) (www.sars.gov.za)