India and Mauritius are negotiating a free trade agreement. The broad contour of the FTA will include trade in goods, trade in services, dispute settlement, trade remedies, economic cooperation and technical barriers to trade.

The choice of items for India for greater market access, though, is not too big as only around six per cent of goods in the island nation are dutiable; the rest are already duty-free. But as Mauritius is part of a host of FTAs in Africa, India is hopeful that a bilateral trade agreement with the country could open the doors wider to the entire continent.

While Mauritius understands that the pact can’t be very wide as India’s tariffs are relatively much greater, India also accepts that actual tariff cuts have to be offered rather than merely giving a margin of preference over other countries.
With China already prepared to sign an FTA with Mauritius later this year, the pressure on India is greater. Geopolitical reasons for signing a free trade pact with Mauritius are also important as India cannot allow China to have a greater influence there.

Negotiations on the FTA had first begun in 2005, but they were soon suspended as there was no agreement on the definition of enterprise and treatment of shell companies in the chapters on services and investment.