India and Mauritius to sign PTA

Port Louis: Mauritius and India will sign a preferential trade agreement (PTA) to boost the island's exports and provide India with the opportunity to tap into African markets.

A framework for the pact is to be signed by Indian Prime Minister Manmohan Singh and his Mauritian counterpart Navin Ramgoolan during a visit to India next week.

?Mauritius has identified a number of products with export potential, which we hope to export to India under the Preferential Trade Access Agreement between the two countries,? said Rajesh Jeetah, Mauritius' industry minister.

The pact will list a number of products which the two countries can trade at low or zero tariffs and officials say India is interested in exporting pharmaceuticals, agricultural machinery, automobiles and spare parts.

India's exports to Mauritius reached Rs 6.9 billion ($228 million) in 2004, making it Mauritius' third biggest supplier, while Mauritian exports to India doubled last year to Rs 500 million ($16.50 million).

About one-third of the total foreign direct investment into India -- around Rs 39,878 billion ($8.86 billion) over the past 13 years -- is routed through Mauritius because of an agreement to prevent double taxation.

Tapping other markets

Mauritius, located off the southeast coast of Africa, is expected to lose foreign revenue with the end of preferential access to lucrative western markets that its sugar and textiles exports have enjoyed for over 30 years.

It now wants to make more inroads in India, and provide it with a base to explore markets in Asia.

While Mauritius, with its 1.2 million population, is a small market for India, Indian businessmen say it can act as a bridge between India and Africa.

Mauritius belongs to two regional economic blocs - COMESA and SADC - that provides preferential access to a large number of African countries.

?We know that there is keen interest among Indian companies to use Mauritius as a production base to benefit from preferential access to this important market of more than 200 million,? said Lloyd Coombes, president of Mauritius' Chamber of Commerce and Industry.

Prime Minister Ramgoolam is also expected to sign other agreements with India during his visit, which includes consumer protection, legal assistance, the transfer of prisoners and cooperation in oil exploration in Mauritian waters.