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A close look at the India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA)

On 22 February 2021, Mauritius and India signed a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) during the visit of India’s Minister of External Affairs Dr Subrahmanyam Jaishankar to Mauritius. The CECPA came into operation on 1 April 2021. Talks between Mauritius and India for the signature of a CECPA started back in 2015 but was suspended pending renegotiation of the Mauritius-India Double Taxation Avoidance Agreement. There was a study which was commissioned as far back as 2005 to identify several areas of investments and that study showed that a CECPA would lay down the road map for encouraging Indian investments in Mauritius and joint investments in the region.

This is the first trade agreement signed by India with an African country. The CECPA aims to provide the institutional mechanism that will encourage and improve trade in goods and well as trade in services, and economic cooperation between the two countries, which already share cultural and historical links. It comes as a timely boost for the revival of economy, post the pandemic, both for Mauritius and India. India can leverage on the core competencies, and strategic location of Mauritius besides its vast network of multilateral and regional trade agreements to open up to new horizons.

The CECPA either reduces or eliminates duties on several products. In fact, Mauritius exporters will benefit from preferential access to India’s market and tariff concessions for 310 products, ranging from sugar to apparel, and from beer to rum. Similarly, Indian businesses will be allowed to expand within the Mauritius market with preferential access for 615 products which include fresh fruits, and medical equipment. They can further use Mauritius as a stepping stone to tap into the African continent and help Mauritius become the hub of Africa. Besides the non-tariff measures, the Mauritius-India CECPA covers a broad range of measures for trade in goods and services, including trade facilitation, technical regulations, customs procedures, and rules of origin to name but a few. Exporters would obtain certificates of origin from their authorized agency to avail themselves of the preferential benefits under the CECPA. The certificate of origin can be applied for online through the common digital platform which the Indian Directorate General of Foreign Trade has put in place.

The services sector accounts to over 75% of the Mauritian GDP and Indian investments in the services sector would provide a further impetus to this sector. The CECPA liberalizes norms to boost the dynamism of services trade. Indian service providers will have access to around 115 subsectors which include professional services, computer related services, research and development, telecommunications, and yoga. Besides, Indian companies could benefit by leveraging on the bilingual or even multilingual prowess of Mauritius to service both francophone and anglophone Africa.

The CECPA is an important milestone in the trade and economic relationship between India and Mauritius. Furthermore, India and Mauritius jointly have a unique strategic opportunity to explore new horizons an strengthen regional commercial ties in the Indian Ocean region and mainland Africa. Both countries have embarked on a new avenue of bilateral cooperation which will undoubtedly further consolidate the already strong ties between India and Mauritius.

This article was published in the Business Magazine on 09.06.2021.