India, Mauritius trade pact may include safeguard mechanism related provisions

India-Mauritius trade agreement may include safeguard mechanism related provisions to protect the domestic industry from a sudden or unusual surge in imports of goods, according to sources. The agreement between the two countries came into force on April 1, 2021. After the implementation of such pacts, provisions can be added to the agreement if both sides agree to that.

The sources said a chapter on general economic cooperation is also expected to be included in the pact, which is officially termed as Comprehensive Economic Cooperation and Partnership Agreement (CECPA).

The safeguard mechanism comes into play when there is a sudden increase in imports of any commodity, which can impact domestic industry and under that provision, concessional customs duty on that particular good is replaced with existing taxes, which is applicable to all nations. The mechanism also includes stricter rules of origin to prevent any routing of products from a third country.

The sources said that the finalisation of both these issues – inclusion of safeguard mechanism and general economic cooperation in the pact – would require approval from the Union Cabinet. The commerce and industry ministry has sought views of different ministries on the matter, after which it would approach the Cabinet. India and Mauritius signed the CECPA, a kind of free trade pact, on February 22, 2021.

Several Indian products, including textiles and chemicals, are enjoying the benefit of greater market access at concessional duties in Mauritius under the agreement. The pact covers 310 export items for India, such as food and beverages, agricultural products, textile and textile articles, base metals, electrical and electronic items, plastics and chemicals, and wood.

Mauritius has benefited 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.

The current pact is a limited agreement, which covers trade in goods, rules of origin, trade in services, technical barriers to trade, sanitary and phytosanitary measures, dispute settlement, movement of natural persons, telecom, financial services, and customs procedures. CECPA is the first trade agreement signed by India with a country in Africa.

India’s exports in April-February 2021-22 to Mauritius stood at USD 666.44 million, while imports were at USD 64.83 million. There is a provision for a permanent safeguard mechanism in the India-UAE trade agreement.

Similarly, in the India-Australia economic cooperation and trade agreement, there is a provision for a safeguard mechanism that includes stricter rules of origin to prevent any routing of products from a third country, and it also deals with any unusual surge in imports. It was signed on April 2 this year.