The India-Mauritius trade deal could include safeguard mechanism provisions to protect the domestic industry from a sudden or unusual surge in imports of goods, sources say.

The agreement between the two countries entered into force on April 1, 2021. After the implementation of these covenants, provisions can be added to the agreement if both parties agree.

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

The safeguard mechanism comes into play when there is a sudden increase in imports of any product, which may impact the domestic industry and under this provision, preferential customs duties on that product particular are replaced by the existing taxes, which are 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 finalization of these two issues – the inclusion of the safeguard mechanism and general economic cooperation in the pact – would require the approval of the Cabinet of the Union.

The Ministry of Trade and Industry has sought the opinion of different ministries on the matter, after which it would contact the Cabinet.

India and Mauritius signed the CECPA, a sort of free trade pact, on February 22, 2021.

Several Indian products, including textiles and chemicals, enjoy expanded market access at preferential tariffs in Mauritius under the agreement.

The pact covers 310 export items for India, such as food and beverages, agricultural products, textiles and textile articles, basic metals, electrical and electronic articles, plastics and chemicals and wood.

Mauritius has benefited from preferential access to the Indian market for its 615 products, including frozen fish, specialty sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic beverages, soaps, bags, medical and surgical equipment and clothing.

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, telecommunications, financial services and customs procedures.

The CECPA is the first trade agreement signed by India with an African country.

India’s exports in April-February 2021-22 to Mauritius stood at $666.44 million, while imports were $64.83 million.

The India-UAE trade agreement contains a provision for a permanent safeguard mechanism.

Similarly, in the economic and trade cooperation agreement between India and Australia, there is a provision providing for a safeguard mechanism which includes stricter rules of origin to prevent any movement of products from a third countries, and also deals with any unusual increase in imports. It was signed on April 2 of this year.