India Extends $100 mn Line of Credit for Defence Equipment to Mauritius

The CECPA, signed by India’s commerce secretary Anup Wadhawan and Mauritius foreign secretary Haymandoyal Dillum, is India’s first free trade agreement with any African country

India and Mauritius on Monday, 22 February, 2021 signed a free trade agreement that will make the African island nation a hub for Indian investments in the region, even as New Delhi extended a $100-million line of credit to fund purchases of defence equipment.

Besides the comprehensive economic cooperation and partnership agreement (CECPA), the two countries signed six other pacts, including two for leasing a Dornier aircraft and a Dhruv advanced light helicopter for monitoring the exclusive economic zone of Mauritius.

The agreements were announced following visiting external affairs minister S Jaishankar’s meetings with Prime Minister Pravind Jugnauth and foreign minister Alan Ganoo. Jaishankar handed over 100,000 doses of Covid-19 vaccines commercially procured by Mauritius, which had received another 100,000 doses as a grant last month.

The CECPA, signed by India’s commerce secretary Anup Wadhawan and Mauritius foreign secretary Haymandoyal Dillum, is India’s first free trade agreement with any African country, Jaishankar and Jugnauth told a media interaction in Port Louis.

The agreement will provide concessional access to 310 export items from India, including agricultural products, textiles, base metals and chemicals, while Mauritius will get preferential market access for 615 products, including frozen fish, fresh fruits, beer, alcoholic drinks, and medical and surgical equipment.

The agreement is expected to open up new market opportunities for both sides and provide a framework to explore opportunities on the African continent.

Describing Mauritius as a “gateway between India and Africa”, Jugnauth said: “This landmark agreement is far-reaching and should unleash new and expanded opportunities in trade in goods and services, investment, economic cooperation and technical assistance.”

Jaishankar said the CECPA will “provide a timely boost for the revival of our post-Covid economies and enable Indian investors to use Mauritius as a launch-pad for business expansion in Africa”. The goods given preferential access will allow Mauritius to tap into segments of the Indian market that currently account for global imports of $15 billion, he said.

For instance, Mauritius will get preferential access for the export of 40,000 tonnes of sugar in an early timeframe and 7.5 million pieces of apparel.

Officials said the $100-million line of credit for defence equipment will pave the way for Mauritius procuring a new coastal surveillance system and other hardware. India will lease the Dornier aircraft and Dhruv helicopter “gratis for two years” to shore up Mauritius’ “capabilities to control and monitor its extensive maritime domain”, Jaishankar said.

Jugnauth also said Mauritius values its defence cooperation with India, including in capacity-building, coastal surveillance, and deterrence to piracy and illegal fishing.

Three other agreements covered the setting up of a renal transplant unit at the Jawaharlal Nehru Hospital with Indian support, creating an 8-MW solar farm to help Mauritius achieve its target of generating 35% of total energy from renewable sources by 2025, and cooperation on consumer protection.

Jugnauth said Mauritius and India have a “unique, trusted and enduring relationship” and a “common interest in an open, prosperous and secure Indian Ocean”. Both countries also have converging views on strengthening the rules-based world order and global institutions, including those of the UN, he said.

He said Mauritius is looking for India’s assistance in procuring another 200,000 doses of Covid-19 vaccines in the coming months

Jugnauth said he also discussed the issue of Chagos Islands, which includes the US military base at Diego Garcia, with Jaishankar. The two sides reviewed the “decolonisation process”, the completion of which “will have no implications for the maintenance of the defence operations in Diego Garcia”, he said.

Jaishankar said he assured Jugnauth of “India’s steadfast, principled support” on the issue of the Chagos archipelago as “has been demonstrated in the past”.

In 2019, the International Court of Justice ruled that the UK should end its control of the Chagos archipelago. The UK has said it doesn’t recognise Mauritius’ claim to sovereignty.