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Trade barriers in India delaying India-SACU PTA: South African official

Economic Times, India

Trade barriers in India delaying India-SACU PTA: South African official


21 August 2015

JOHANNESBURG: Delays in finalising a Preferential Trade Agreement (PTA) between India and the Southern African Customs Union (SACU) have been largely caused by different processes in Indian states and resistance to New Delhi’s wide-ranging goods list, a senior official said here.

"It is very difficult to penetrate the Indian market as each of the different regions have different processes in place," Niki Kruger, the chief director of trade negotiations in the Ministry of Trade and Industry, told members of South Africa’s parliamentary economic development committee at a briefing requested by them.

"It is (therefore) not easy for some products to move across (India) because the different provinces have their own regulations," Kruger said.

Kruger also said that sensitivities in the South African business sector about some of the products proposed by India for preferential treatment were hindering the conclusion of the PTA, which has been in negotiation for more than two years now.

Business and labour in South Africa have previously raised concerns about the impact that preferential tariffs would have on the clothing and textiles, chemicals, plastics and agricultural sector due to India’s much greater advantage in these areas. This had also led to delaying the finalisation of the PTA.

Kruger was hopeful that the PTA would be finalised soon, but cautioned that it was likely to be much less ambitious than originally planned.

India had requested the inclusion of a wide range of products, but a number of these are now expected to be excluded from the PTA.

Analysts have said that the reduced PTA agreement would go against the grain of the BRICS (Brazil, Russia, India, China and South Africa) alignment objective of bolstering south-south trade, especially since most of the other partners in BRICS are more competitive than South Africa.

Discussions around the PTA were originally intended to give India easier access to the member countries of SACU, most of whom are dependent on South Africa as a port of entry for their imports.

India is currently South Africa’s sixth-largest trading partner, with a large number of major Indian companies having a presence in the country.

Bilateral trade between India and South Africa during 2014-15 touched $11.79 billion.