India and Mauritius are giving finishing touches to a landmark free trade agreement (FTA), which is aimed at liberalising norms to boost two-way commerce and investments, said sources familiar with the matter.
India is seeing this deal as a gateway to African countries for its products and a deal could be sealed in the next few weeks, sources told CNBC-TV18.
In an FTA, two trading partners cut or eliminate duties on majority of goods besides liberalising norms to promote services trade and boost investments. According to experts, India may not get a substantial benefit in the goods sector as Mauritius is a small market, but services sectors such as IT and tourism hold huge potential to enhance economic ties.
Interestingly, Mauritius is also holding negotiations for a similar pact with China, with which India has a huge trade deficit. The trade gap was $63 billion in 2017-18. The island nation is the top source of foreign direct investment (FDI) into India. In 2017-18, India received $15.94 billion as compared to $15.73 billion in the previous financial year.
The bilateral trade between the countries increased to $1.1 billion in 2017-18 from $900 million in 2016-17. India exports petroleum products, pharmaceuticals, cereals, cotton and electrical machinery, among others, to Mauritius. The island nation exports to New Delhi include iron and steel, pearls and precious/semi-precious stones.
With inputs from PTI.