With the African Continental Free Trade Area (AfCFTA) reshaping the continent’s economic landscape, Mauritius’s strategic importance to India is expected to grow.
The relationship between India and Mauritius is rooted in shared history and cultural ties, with a large Indian diaspora in Mauritius forming a natural bond between the two nations. This foundation has been complemented by decades of economic cooperation. India has been consistently ranked as one of Mauritius’s largest trading partners, with bilateral trade reaching $697.4 million in 2023.
A significant milestone in this partnership was the signing of a Comprehensive Economic Cooperation and Partnership Agreement (CECPA), which came into force on 1 April 2021. This not only facilitates trade in goods and services, but also creates a framework for collaboration in high-growth sectors such as pharmaceuticals, information and communication technology, biotechnology and financial services.
Through CECPA, around 310 exports items from India (including agricultural products, textiles and electronics) have got market access at concessional customs duties in Mauritius. Indian service providers got access to around 115 sub-sectors within 11 broad service sectors, including professional services, computer related services, research and development and other business services. Mauritius got preferential access to Indian markets through over 600 tariff lines .
Mauritius as a bridge: The island nation’s role as a conduit to Africa is reinforced by its membership of the AfCFTA, which integrates 54 African nations into a single market of over 1.3 billion people with a combined GDP of $3.1 trillion.
Through AfCFTA, intra-African trade is expected to grow by 52% by 2025. Mauritius’s active role in AfCFTA, combined with the benefits of CECPA, makes it an ideal base for Indian businesses to access Africa’s vast market. The use of English as a language, availability of a skilled workforce and strong IT infrastructure make it particularly attractive for Indian IT and IT-enabled services companies looking to expand their African presence.
Further, Mauritius’s well-established financial institutions provide a reliable perch from which to navigate complex regulatory environments across the continent. The country’s preferential trade agreements within African regional blocs such as COMESA (Common Market for Eastern and Southern Africa) and SADC (Southern African Development Community) further strengthen Indian companies’ access to African markets.
An economic transformation that spells investment opportunities: Mauritius has undergone a significant transformation over the years, emerging as a financial hub. Its policies, such as tax incentives, streamlined regulations and infrastructure development, have created a business-friendly environment that has attracted foreign direct investment inflows of approximately $340 million in the first half of 2024.
Indian companies like Sun Pharma has established vaccine production facilities in Mauritius to serve African nations, while Indian information technology firms have set up software development hubs to cater to the growing African tech market.
Cross-border financial flows have expanded significantly since the implementation of the CECPA. Indian banks and fintech companies have partnered with Mauritian firms to develop innovative financial solutions tailored for African markets.
There is synergy between Mauritius’s financial expertise and India’s technological innovation that can foster a dynamic ecosystem to support trade, investment, economic growth and various south-south collaborations.
Maritime security and India’s Sagar vision: Beyond economic collaboration, Mauritius is integral to India’s Sagar vision: Security and Growth for All in the Region. Launched in 2015, Sagar underscores India’s commitment to ensuring maritime security, stability and prosperity in the Indian Ocean Region.
Mauritius, situated at a strategic location in the western Indian Ocean, is a key partner in advancing India’s maritime diplomacy. Defence cooperation forms a significant part of this partnership.
India has provided Mauritius a $100 million defence line-of-credit, which underscores the depth of this relationship. These measures enhance Mauritius’s ability to monitor its maritime domain and secure vital trade routes, aligning with India’s broader objective of countering Chinese influence in the Indian Ocean Region.
A shared vision for the future: Mauritius’s economic strategies and alignment with India’s objectives underscore its pivotal role in shaping the future of India-Africa trade and cooperation. The nation’s emphasis on innovation, skill development and public-private partnerships also aligns well with India’s growth and Africa strategy.
In Mauritius, India has a stable and reliable partner in an important part of the world that provides Indian businesses easy access to African markets. This partnership, bolstered by shared cultural ties and aligned economic goals, ensures mutual benefits and long-term growth.
By leveraging Mauritius’s unique position, India is not only securing its strategic and economic interests, but also contributing to the broader region’s prosperity. This partnership exemplifies the power of collaboration, paving the way for a future of shared growth, stability and opportunities in the Indian Ocean Region and Africa.
These are the author’s personal views.
The author is professor, Indian Council for Research on International Economic Relations (ICRIER)
#Mauritius #offers #India #gateway #strategic #cooperation #Africa
