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India to sign free trade agreement with Mauritius

India to sign free trade agreement with Mauritius

Tribune News Service

New Delhi, March 27 2005

India will sign a free trade agreement (FTA) with Mauritius during Prime Minister Manmohan Singh’s four-day visit, starting from March 30 to this island country.

The agreement is aimed at strengthening the existing economic cooperation between the two countries. It will liberalise trade in goods and services and even facilitate joint ventures, besides encompassing the existing double taxation avoidance agreement between the two countries.

This will be the first bilateral visit of the Prime Minister after assuming charge in May last year. During the last 10 months, Dr Manmohan Singh has undertaken trips to New York to attend the U N General Assembly Session, Thailand to participate in the BIMSTEC meet and to Laos to attend the Indo-ASEAN Summit.

With a bilateral investment promotion treaty and a double taxation agreement already in place, the island has been a large source of foreign direct investment (FDI) inflow to India - a total of Rs 38,024 crore during the past 13 years.

The FTA is expected to eliminate a major irritant between India and Mauritius since it had been generally perceived that the loopholes in the treaty were robbing the Indian exchequer of valuable tax revenues while keeping a channel open for laundering activities.

Mauritius is the second largest investor in the Indian market and a lot of this is ascribed to the tax breaks that companies availed of.

Analysts said with the FTA, India’s bigger message would be that it wished to bind the region in a bond of free trade agreements that will encompass Sri Lanka, Mauritius and, then, Singapore, leading to an economic win-win situation in these countries.

A working group to draft the FTA had been set in place when the Prime Minister of Mauritius, Paul Berenger, visited India in 2003.

India also provides surveillance assistance to Mauritius’ exclusive economic zone apart from training its defence personnel. Mauritius has also indicated that it will make defence purchases from India, the first being a Dornier aircraft.

Dr Manmohan Singh’s visit is likely to give a boost to the bilateral relations. India is hoping to give an impetus between the two in the field of information technology also.

The Prime Minister is expected to hold wide-ranging talks with his Mauritius counterpart Paul Berenger. Mauritius, with a sizable Indian population, is going to the polls in June.

Apart from the signing of the FTA, Prime Minister will also inaugurate a cyber tower for information technology. India has been assisting Mauritius in the field of IT and several training exchange programmes have been undertaken in the past. Dr Manmohan Singh was earlier scheduled to visit Sri Lanka along with Mauritius but later decided on a one nation tour. He will return on April 2.

 source: The Tribune