Mauritius textiles, sugar to get duty-free India entry

BALACLAVA, Mauritius, May 17 (Reuters) Mauritius will be able to exploit India's vast market and export its threatened sugar and textile products free of duty under a new trade pact between the two countries, officials said today.

The tiny Indian Ocean island faces major losses in textile and sugar earnings due to erosion of trade preferences to lucrative western markets as a result of global trade liberalisation.

Indian trade officials, who are in the final stages of negotiating a preferential trade agreement (PTA), say the pact would earn Mauritius more than 30 million dollar and help offset losses in textiles and sugar revenues.

''India is very keen that Mauritius should get substantial access to the huge Indian market and we want this agreement to give results,'' said M V P C Sastry, joint secretary from India's ministry of commerce and industry.

''(This will be) in terms of increasing employment opportunities for the Mauritian people, reducing poverty and generating more economic growth,'' he told journalists.

Sastry said India wanted to give Mauritius market access in items of export interest such as sugar and its by-products and textiles.

Seventy per cent of Mauritius' exports are in the textiles sector and the island is the seventh largest exporter of sugar in the world.

Under the PTA, which is expected to be signed next month, Mauritius will be able to export one million pieces of textile and clothing duty-free to India.

In addition, two million more pieces of textiles and clothing can be exported duty-free to India provided the source materials of yarn are imported from India.

Mauritius will also be able to export 15,000 tonnes of refined sugar -- which fetches premium prices on the global market -- duty-free to its giant neighbour across the Indian Ocean.

Under preferential tariffs, India has also agreed to allow Mauritius to export 50,000 litres of rum and Mauritius will permit India to export 50,000 litres of wine.

Officials say they hope that the PTA will eventually become a free trade agreement and they will begin negotiations on this six months after the PTA becomes effective.

India's exports to Mauritius reached 6.46 billion rupees (208.8) in 2005, making it Mauritius' fourth largest supplier after China, South Africa and France.

Mauritius exports to India totalled 260 million rupees (8.4 million dollar).

While Mauritius, located off the southeast coast of Africa with a population of 1.2 million, is a small market for India, Indian business figures say it can act as a gateway between India and Africa.

Mauritius belongs to two regional economic blocs - COMESA and SADC - that provide preferential access to a large number of African countries with a market of over 200 million people.

India is interested in exporting pharmaceuticals, agricultural machinery, automobiles and spare parts to Mauritius and the rest of Africa, officials said.

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