Economy

India, Mauritius likely to sign free trade pact in January

Amiti Sen New Delhi | Updated on November 20, 2018 Published on November 20, 2018

Talks between India and Mauritius re-started last year after the two countries resolved their differences and signed the DTAA.   -  Getty Images/iStockphoto

Negotiating round in Mauritius this week

The proposed India-Mauritius free trade agreement,being given the final touches by negotiators this week, is likely to be signed in January during Mauritius PM Pravind Kumar Jugnauth's India visit, a government official has said. “Textiles and marine products are the two tricky areas for India but the negotiators are trying to sort it out right now in Mauritius. We hope the agreement will be ready to be formalised when Mauritian PM visits in January," the official told BusinessLine.

Negotiations on the free trade pact, officially called the Comprehensive Economic Cooperation and Partnership Agreement (CECPA), were suspended in 2013 due to disagreement over the Double Tax Avoidance Agreement (DTAA). Talks, however, re-started last year after the two countries resolved their differences and signed the DTAA.

Mauritius is interested in convincing India to eliminate or substantially reduce its tariffs on textiles and marine products as it sees a lot of scope for increase in market access in these two areas. “The Textiles Ministry is opposed to offering zero or very low tariffs to Mauritius in textiles and garments. The Commerce Ministry is trying to convince it that the domestic sector will not be affected as Bangladesh and Sri Lanka already have zero duty access for many textile items in the Indian market,” the official said.

Since Mauritius is a small market and has tariffs on very limited lines of products, India is not expected to gain substantially in the area of goods. “There are a number of agricultural items, processed food, furnishings & bed linen and some engineering goods, where tariffs exist in Mauritius and Indian exports can benefit from duty elimination or reduction,” the official said.

Besides, New Delhi is expected to make greater in-roads into the services sector, especially tourism and hotels, with the CECPA granting it greater concessions in the area. Mauritius is also a beneficiary of the Generalised System of Preferences offered by Japan, Norway, Switzerland, the US, and the customs union of Belarus, Kazakhstan, and Russia. It is a FTA member of the Common Market for Southern and Eastern Africa and the Southern African Development Community. “Once India has a CECPA with Mauritius, Indian industry could use it as a base to trade with other countries on favourable terms,” the official explained.

India’s exports to Mauritius increased 22 per cent in 2017-18 to cross $ 1 billion while its imports from the island nation during the year increased 12 per cent to $ 20.6 million. Apart from the economic gains, which could be limited for India, the free trade pact could help strengthen the common cultural and historical ties that the two countries share.

Published on November 20, 2018

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