India and Mauritius signed a USD 100 million Defence Line of Credit agreement on Monday. It was a part of several understandings, including the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) that was signed between the two countries during the ongoing visit by External Affairs Minister S. Jaishankar.

India decided to change its trading relationship with Mauritius after it found that the earlier double taxation avoidance (DTA) treaty with the island nation was being misused for routing illegal money into India.

The new CECPA was signed by Indian Commerce secretary Anup Wadhawan and Ambassador Haymandoyal Dillum, Secretary of Foreign Affairs, Regional Integration and International Trade, Government of Mauritius in Port Louis on Monday in the presence of Prime Minister of Mauritius and Indian External Affairs Minister S. Jaishankar.

In fact, tax advantage that India gave made Mauritius the supplier of largest foreign direct investment into the country. Even since then, various loopholes in the earlier trading system have been plugged.

CECPA is the first trade agreement signed by India with a country in Africa. The pact is a limited agreement, which will cover Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Financial services, Customs Procedures and Cooperation in other Areas. The trade agreement provides for an institutional mechanism to encourage and improve trade between the two countries.

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