Mauritius is calling for amendments to its Double Taxation Avoidance Convention with India, following a decline in FDI post-2016 revisions. The need to revamp the Comprehensive Economic Cooperation and Partnership Agreement is emphasized. Ongoing talks aim to resolve trade and taxation issues, while Mauritius seeks parity with Singapore and promotes itself as an investment gateway to Africa.
Mauritius is advocating for amendments to its trade agreement with India, particularly the Double Taxation Avoidance Convention (DTAC), as stated by Foreign and Trade Minister Dhananjay Ramful. Speaking to PTI Videos, he emphasized the necessity of revisiting the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) to reestablish Mauritius as a prime investment intermediary, citing a notable decline in foreign direct investment (FDI) from the island to India since the 2016 treaty revision.
The discussion regarding amendments to the DTAC remains ongoing. Minister Ramful indicated that two main issues must be resolved before a protocol can be signed, thus highlighting the presence of certain unresolved matters in the current negotiations. He announced that a second session of the joint committee is scheduled to convene, focusing on both the CECPA and the DTAC to tackle trade imbalances and taxation matters.
Since the year 2000, Mauritius has invested a cumulative total of $175 billion in FDI into India, constituting 25 percent of India’s overall FDI inflows. Nevertheless, following the 2016 amendment aimed at curbing tax avoidance, the FDI from Mauritius dropped drastically from $15.72 billion in 2016-17 to $6.13 billion in 2022-23. Despite this contraction, Mauritius remained India’s third-largest source of FDI for the fiscal year 2022-23.
For the fiscal year 2023-24, FDI equity inflows from Mauritius showed a recovery, amounting to $7.97 billion, making it the second-largest FDI source for India behind Singapore. In the first quarter of 2024-25, these inflows further totaled $3.21 billion, indicating a positive trend.
Furthermore, Minister Ramful expressed the desire for parity with Singapore regarding investment opportunities, asserting the aim to receive comparable or improved consideration. He also represented Mauritius as a strategic platform for Indian investors, highlighting its potential as a gateway to Africa’s vast consumer market of 1.3 billion individuals. He encouraged Indian investors to utilize Mauritius as a crucial investment conduit to the continent.
The Indian High Commissioner to Mauritius, Anurag Srivastava, remarked that significant agreements are anticipated to be signed during Prime Minister Narendra Modi’s forthcoming two-day state visit, aimed at enhancing economic relations between the two nations.
In summary, Mauritius is seeking critical amendments to its tax agreement with India to restore its investment status, following significant declines in FDI after the 2016 treaty revisions. The upcoming joint committee session will address pressing trade and taxation issues while Mauritius aims to compete effectively with Singapore as a preferred investment destination. The island nation continues to advocate its role as a strategic entry point for Indian investments in Africa, which are projected to increase amid enhanced bilateral cooperation.
Original Source: www.business-standard.com
