India, SACU to sign preferential trade agreement
"We both are pushing it (PTA agreement) very hard and want to complete it at least by the middle of the year," he said.
The India-Southern Africa Customs Union Preferential Trade Agreement will help the countries sign the pact by reducing tariffs for certain products. Tariffs are customs duties on merchandise imports.
The Southern African Customs Union (SACU) consists of Botswana, Lesotho, Namibia, South Africa, and Swaziland.
South Africa`s Minister of Trade and Industry Rob Davies said, "We are confident that we will be able to reach a mutual beneficial agreement in not too distant future."
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.
The minister said the agreement should provide an enormous boost to ongoing levels of bilateral trade, especially in products such as pharmaceuticals, machinery, automobiles, where India enjoys a competitive advantage.
The exchange of lists is expected to take place soon. "I think we have made some progress and specific exchange of list will take place within the next two weeks," Sharma said.
India`s exports to South Africa comprises mineral fuels, automobiles, iron, steel, chemicals, pharmaceuticals, cotton yarn and fabrics.
The country`s import include gold, aluminum, phosphoric acid, coal, pulp and waste paper, precious stones, including diamonds.
India and South Africa has also revised their trade target of USD 10 billion (which was earlier scheduled to be achieved by 2012) to USD 15 billion, as the earlier target is likely to be achieved by this fiscal-end.
During April-September 2010-11, the bilateral trade stood at USD 5.3 billion compared to USD 3.7 billion in the same period last fiscal.