On February 22, India signed its first free trade agreement (FTA) with Mauritius, its first such agreement with an African nation. Known as the Comprehensive Economic Cooperation and Partnership Agreement (CECPA), the historic pact will strengthen regional commercial ties.
Mauritius exporters will benefit from preferential access to India’s market and Indian businesses will be allowed to expand within the Mauritius market. Overall, CECPA will facilitate preferential market access for 615 tariff lines for Mauritius and 310 tariff lines for India.
Key benefits of the trade agreement
The India-Mauritius CECPA is broad-based, covering a wide remit that includes trade in goods, trade in services, non-tariff measures and technical barriers to trade, sanitary and phytosanitary measures, trade facilitation, investment, technical regulations, custom procedures, rules of origin, dispute settlement, trade remedies, etc.
The historic trade agreement also covers bilateral services trade, which includes business services, educational services, communication, construction, environmental services, distributional services, financial, health related and social services, recreational, cultural & sporting services, transport services, and travel & tourism services.
The CECPA will provide a gateway for Indian exporters and businesses to expand their investments and commercial interests in the African continent.
India widens market access for Mauritius
Mauritius will benefit from tariff concessions on frozen fish, biscuits, fresh fruits, juices, mineral water, specialty sugar, soaps, beer and other alcoholic beverages, medical equipment, etc.
Mauritius will have preferential access to India’s market, and will be allowed to export 40,000 tons of sugar, 7.5 million pieces of apparel, 1.5 million liters of rum, and 2 million liters of beer per year.
In terms of services trade, India will allow Mauritius access to 95 sub-sectors of its 11 broad service sectors.
Pact with Mauritius a gateway to Africa for Indian investors, exporters
The trade pact is India’s first such agreement since 2011. Announcing the signing at Port Louis, India’s foreign minister S. Jaishankar said that the CECPA “will provide a timely boost for the revival of our post-Covid economies and also enable Indian investors to use Mauritius as a launch-pad for business expansion into continental Africa helping the prospect of Mauritius emerging as a ‘hub of Africa’”. He further elaborated that since the services sector contributes to 76 percent of Mauritius’ GDP, the CECPA could facilitate Indian investment in the country’s services sector.
India had flown 100,000 Made-in-India COVID vaccine doses to Mauritius in January and handed over another 100,000 doses. Jaishankar said that the vaccine delivery was a “clear and telling demonstration” of the bilateral relationship.
Defense pact to enable maritime security partnership
The two countries also signed a Defense Line of Credit (LOC) agreement worth US$100 million, which is expected to assist Mauritius to procure defense assets from India. India will also lease a Dornier aircraft and the Advanced Light Helicopter Dhruv (HAL Dhruv) to Mauritius on a gratis basis for a period of two years, which will allow the nation to better patrol and monitor its vast maritime domain.
Security on the high seas is necessary, among other things, for smooth international trade and India seeks to be an active provider of maritime peace and stability in the Indo-Pacific region. Through the agreement, Mauritius will serve as a key security partner to India in the region.