BALACLAVA (Mauritius): 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 on Wednesday.

The tiny Indian Ocean island faces major losses in textile and sugar earnings due to erosion of trade preferences in 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), said the pact would earn Mauritius more than $30 million and help offset losses in textiles and sugar revenues.

"India is keen that Mauritius should get substantial access to the huge Indian market and we want this agreement to give results,'' M. V. P. C. Sastry, Joint Secretary from India's Ministry of Commerce and Industry, told journalists. Mr. 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 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 neighbour across the Indian Ocean. India has agreed to allow Mauritius to export 50,000 litres of rum under preferential tariff and Mauritius will permit India to export 50,000 litres of wine.

Officials said they hoped the PTA would eventually become a free trade agreement and they would begin negotiations on this six months after the PTA becomes effective.

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

Mauritius exports to India totalled 260 million rupees. 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. — Reuters

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