Mauritius is actively seeking Indian Small and Medium Enterprises (SMEs) to establish operations on the island, leveraging the duty-free export advantages offered by the African Growth and Opportunity Act (AGOA). This initiative aims to boost trade between India and Mauritius, particularly benefiting from AGOA’s provision for duty-free access to the US market. High Commissioner of Mauritius to India, Haymandoyal Dillum, highlighted the opportunity for Indian businesses to capitalize on AGOA. Speaking at a Bharat Chamber of Commerce event in Kolkata, Dillum underscored the potential for Indian industries to harness AGOA’s benefits. He specifically encouraged the leather industry to consider Mauritius as a strategic location for expanding their operations. This move could provide a competitive edge in the US market, especially as the sector faces challenges in traditional markets like the US and Europe due to post-pandemic economic shifts.
West Bengal’s leather industry, which contributes about Rs 6,000 crore to the state’s economy, is particularly relevant in this context. This sector, which relies heavily on imports of raw hides from African nations, is facing a downturn in traditional export markets. Mauritius’ proposal offers a promising alternative by potentially enhancing value-added processing within its borders. The AGOA program, which was established in 2000 to foster economic growth and trade between the US and eligible African countries, is set to expire in 2025. Mauritius is advocating for its continuation, emphasizing its significance in promoting trade.
In addition to trade incentives, Mauritius is also focusing on strengthening its economic ties with India through local currency transactions. The island nation is currently testing a trading mechanism involving the Indian Rupee and the Mauritian Rupee. This initiative aims to simplify and enhance bilateral trade by reducing reliance on third-party currencies. The central banks of both Mauritius and India are monitoring the progress of this system closely.
Furthermore, Mauritius banks have initiated Vostro accounts with Indian banks, which facilitate easier and more efficient financial transactions between the two countries. A Vostro account is a type of account that a domestic bank holds on behalf of a foreign bank, allowing for transactions in the domestic bank’s currency. To complement these financial developments, Mauritius adopted the Unified Payments Interface (UPI) in February, integrating a modern payment system that further supports seamless transactions between Mauritius and India. This adoption signifies Mauritius’ commitment to enhancing economic integration and trade facilitation with India.
