India Enters into Defence and Trade Agreements with Mauritius and Extends 100 Million USD Credit

In a significant development and approved by the union cabinet, India recently entered into a USD 100 million Defence Line of Credit agreement with Mauritius, the first such pact with an African country as a part of the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) also called Foreign Trade Agreement (FTA)during a visit by External Affairs Minister S. Jaishankar during his visit to Mauritius.

“Privileged to witness along with Prime Minister Pravind Kumar Jugnauth the signing of Comprehensive Economic Cooperation and Partnership Agreement, India’s first such agreement with an African country. This will help focus on post-pandemic economic recovery and enable business expansion and greater investments,” Mr. Jaishankar said to the media after signing the agreement.

The new framework under the CECPA will allow India a greater entry for Indian goods into the African continent especially for several items including surgical equipment, medicine, and textile products.

A limited agreement by nature, CECPA will cover trade in Goods, Trade in Services, Rules of origin, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Financial Services, Customs Procedures, and Cooperation in other areas. This will also include 310 export items for India such as foodstuff and beverages, agricultural products, base metals and articles, electrical and electronic items, plastics and chemicals, wood, etc.

“Just to illustrate some of the benefits, Mauritius will get preferential access for export of 40,000 tonnes of sugar into India early frame,” highlighted Mr. Jaishankar. Mauritius will also receive preferential access for the export of 7.5 million pieces of apparel in addition to other 615 products such as frozen fish, specialty sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment.

A $100 million Defence Line of Credit for Mauritius was also announced. This would “enable the procurement of defense assets from India” according to the requirements of the country which was emerging as an important maritime entity in the Indo-Pacific region. “These initiatives underline once again that the security of Mauritius is the security of India; in the prosperity of Mauritius is our prosperity,” Mr. Jaishankar remarked adding that Mauritius would get a Dornier aircraft and an Advanced Light Helicopter Dhruv on a lease that would help strengthen its maritime security capabilities.     

Mr. Jugnauth emphasized that the agreements signed between the two countries would “consolidate the strong ties” between India and Mauritius further and promote foreign direct investment of Mauritius and new Mauritian company formation in India. Notably, during April September 2020, Mauritius ranked 4th in foreign direct investment in India.

The Chagos Archipelago dispute also came up during the discussion, which was an issue of sovereignty and sustainable development before the United Nations. In 2019, India voted for Mauritius at the U.N. General Assembly on this issue. India was amongst the 116 countries that demanded that the U.K. end its “colonial administration” from the archipelago.

“I assured the Prime Minister of India’s steadfast principled support on this issue as has been demonstrated in the past,” noted Mr. Jaishankar.

Me. Jaishankar also reaffirmed India’s medical support to Mauritius in the aftermath of the covid pandemic supported by the recent delivery of 100,000 Covishield vaccines to the African nation. Covid vaccine supply was a “clear and telling demonstration” of the strong bilateral relationship between the two countries, he remarked.

India’s External Affairs Minister also reviewed the status and progress of the India-assisted development projects in Mauritius and invited Mr. Jugnauth for a visit to India.

About business and investment in the services sector, Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors including computer-related services, research & development, telecommunication, construction, financial, tourism & travel, entertainment, transport, professional services, etc.

India too offered approximately 95 sub-sectors from the 11 broad services sectors, including professional services, R&D, and other business services, and invited Mauritius investors for setting up a company in India.

Both sides have also reached an agreement for an Automatic Trigger Safeguard Mechanism (ATSM) for negotiating on a limited number of highly sensitive products within two years.

India Mauritius bilateral relationship is deep-rooted supported by historic cultural affinities, regular and frequent high-level political interactions, development cooperation, defense and maritime partnership, and people-to-people connection.

Mauritius being an important development partner, India had extended a ‘Special Economic Package’ of USD 353 million to Mauritius in 2016.