The Union Cabinet has recently given its approval to the signing of the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) between India and Mauritius. CECPA is the first trade agreement India has signed with a country in Africa, making it a milestone in international trade relations.
Key Points About CECPA
CECPA is a type of free trade pact designed to encourage and enhance trade between India and Mauritius. The agreement will enable both countries to reduce or eliminate duties on products and relax norms to promote service trade.
Various Types of Trade Agreements
There are several types of trade agreements including:
– Free Trade Agreement (FTA): Countries agree to provide preferential trade terms and tariff concessions to the partner country. India has negotiated FTAs with Sri Lanka and ASEAN, amongst others.
– Preferential Trade Agreement (PTA): Partners give preferential right of entry to certain products by reducing duties on an agreed number of tariff lines. India has signed a PTA with Afghanistan.
– Comprehensive Economic Partnership Agreement (CEPA): These agreements are more comprehensive than an FTA, covering negotiations on trade in services, investment, and other areas of economic partnership. India has signed CEPAs with South Korea and Japan.
– Comprehensive Economic Cooperation Agreement (CECA): CECA covers negotiation on trade tariff and TRQ rates only, with India having signed a CECA with Malaysia.
The India-Mauritius CECPA
This is a limited agreement covering select sectors like Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade and Dispute Settlement among others.
Benefits for India and Mauritius
Through this agreement, more than 300 domestic goods from agriculture, textiles, electronics and other sectors from India will gain market access at concessional customs duties in Mauritius. Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors. On the other hand, Mauritius will benefit from preferential market access into India for its 615 products.
Negotiation on Automatic Trigger Safeguard Mechanism (ATSM)
ATSM protects a country from any sudden increase in imports. Under this mechanism, if the imports of a product rise alarmingly, after reaching a certain threshold, India can impose safeguard duties on imports from Mauritius automatically and vice versa.
India-Mauritius Economic Relations
India has been an important trade and investment partner for Mauritius over the years. In 2016, India extended a ‘Special Economic Package’ of USD 353 million to Mauritius. Different projects, including the Mauritius Supreme Court building project, the Metro Express Project, and the 100-bed ENT hospital project, have been implemented under this package.
Recent Developments
Recently, several significant developments have taken place. India and Mauritius signed a USD 100 million Defence Line of Credit agreement. Mauritius will get a Dornier aircraft and an Advanced Light Helicopter Dhruv on lease. Both sides also discussed the Chagos Archipelago dispute, an issue of sovereignty and sustainable development before the United Nations (UN).
Way Forward
The evolving geopolitical landscape of the Indian Ocean has created new challenges and opportunities for countries in and bordering the region. To take this engagement further, India needs to remain proactive in bringing together like-minded partners such as Mauritius, Comoros, Madagascar, Seychelles, Maldives, and Sri Lanka in numerous and overlapping ways.
