India offers $100 million line of credit to Mauritius

India offers $100 million line of credit to Mauritius to facilitate procurement of defence assets

New Delhi’s LoC of $100 million will help Mauritius buy defence assets from India

Credit: iStock photo.

India on Monday signed a free trade agreement with Mauritius, in addition to offering the Indian Ocean island nation a new Line of Credit (LoC) of $ 100 million to help it procure defence assets.

New Delhi also agreed with Prime Minister Pravin Jugnauth’s government in Port Louis to provide a Dornier aircraft and a Dhruv Advanced Light helicopter on lease to Mauritius for two years, in order to help the island nation shore up its capabilities to patrol and monitor its extensive maritime domain more effectively.

“These initiatives underline once again that the security of Mauritius is the security of India; in the prosperity of Mauritius is our prosperity,” External Affairs Minister S Jaishankar said in Port Louis on Monday. He was addressing a joint press conference with Jugnauth.

New Delhi’s LoC of $100 million will help Mauritius buy defence assets from India. The move appears to be a part of India’s endeavours to counter China’s attempts to spread its geo-strategic tentacles in Indian Ocean region.

The India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA) was also inked just weeks after a similar pact was signed by China and the Indian Ocean nation.

The CECPA between India and Mauritius covers 310 export items for India, including food items and beverages, agricultural products, textile and textile articles, base metals and articles made with base metals, electricals and electronic items, plastics and chemicals, wood and articles made with wood, and others. Mauritius will benefit from preferential market access into India for its 615 products, including frozen fish, speciality sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment, and apparel.

“This is, therefore, a significant opportunity for Mauritius to benefit from access to the Indian market,” the External Affairs Minister said. “Just to illustrate some of the benefits, Mauritius will get preferential access for export of 40,000 tonnes of sugar into India at an early time frame. Similarly, there will also be access for the export of 7.5 million pieces of apparel.”

Mauritius will grant service providers of India access to around 115 sub-sectors from the 11 broad service sectors. India has offered Mauritius access to around 95 service sub-sectors.

The two sides agreed to negotiate an Automatic Trigger Safeguard Mechanism (ATSM) for a limited number of highly sensitive products within two years of the signing of the CECPA.

The bilateral trade between India and Mauritius registered a growth of 233 per cent from $206.76 million in 2005-06 to $690.02 million in 2019-20. India’s exports to Mauritius surged 232 per cent from $199.43 million to $662.13 million during the period. India’s imports from Mauritius increased 280 per cent from $7.33 million to $27.89 million.

Though China remains the largest trading partner of Mauritius, India hopes that the new CECPA will give a boost to its bilateral commerce with the Indian Ocean nation.

Jaishankar, who visited Malé before travelling to Port Louis, had on Sunday announced India’s decision to extend a similar LoC of $50 million to Maldives to support defence projects in the archipelago. India on Sunday signed an agreement with Maldives to “develop, support and maintain” a harbour at Uthuru Thila Falhu naval base in the island nation. 

Get a round-up of the day's top stories in your inbox

Check out all newsletters

Get a round-up of the day's top stories in your inbox