"I am glad to say that we will move the process forward with respect to discussion on free trade agreement and later on to comprehensive economic partnership agreement," Mauritius Foreign Minister Arvin Boolell told reporters in New Delhi.
The visiting minister said that trade and economic relations between the two countries are constantly gaining momentum.
The agreement, if signed, would liberalise trade in goods and services and facilitate investments.
With a bilateral investment promotion treaty and a double taxation agreement already in place, the island nation has been the largest source of foreign direct investment inflow to India.
In 2011-12, Mauritius contributed 38 per cent in the country's total FDI of $36.5 billion.
India received $9.94 billion FDI from Mauritius during the period.
The bilateral trade between the nations in 2010-11 stood at a modest $818 million.
India is negotiating over a dozen free trade pacts with countries like Australia, New Zealand, Indonesia and Canada.
Image: A view of Port Louis, capital of Mauritius | Photograph: Rediff Archives
Have exchanged information with India in 170 cases: Mauritius
IMAGES: World's 10 remarkable infrastructure projects
Sebi to issue guidelines soon on e-IPOs
'Sachin is 39 and should be allowed to choose'
Did Pranab Mukherjee play a role in the Netaji mystery?