India and Mauritius are close to finalising the proposed bilateral free trade agreement (FTA).
The agreement had got delayed due to apprehensions amongst domestic players in both countries about providing unlimited market access for some items.
The two countries have now decided to go for tariff rate quotas(TRQs) for items where limited preferential access is to be given to protect local interests.
TRQs are import quotas that allows a limited quantity of a specific item into a country.By putting in place TRQs on sensitive items,the FTA partners can make sure that even if import duties are brought down to zero,imports won’t exceed an agreed quantity.
Further,experts have said that once India-Mauritius FTA is in place,it will provide an opportunity to Indian manufacturers to get into the African market through the Mauritius route.
The decision to go for an FTA with Mauritius is also strategic as China has already concluded its negotiations for a free trade pact with the Mauritius and India does not want to be left out.
India’s exports to Mauritius in 2018-19 was worth $1.16 billion while its imports from the country was about $78.64 million.
FTAs are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non tariff barriers on substantial trade between them.