Mauritius Proposes Amendments to Double Taxation Agreement with India

Mauritius seeks amendments to its Double Taxation Avoidance Convention with India, as FDI inflows from Mauritius to India have dramatically decreased since 2016. Foreign Minister Dhananjay Ramful emphasized the need to revise CECPA to restore Mauritius’ investment appeal. A joint committee session is planned to discuss trade and taxation issues, with an aim to achieve parity with Singapore and enhance Mauritius’ role as a gateway to Africa.

Mauritius is advocating for amendments to its trade arrangements with India, particularly the Double Taxation Avoidance Convention (DTAC), as stated by Foreign and Trade Minister Dhananjay Ramful. In a PTI Videos interview, he emphasized the importance of revisiting the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) to reestablish Mauritius as a favored conduit for foreign direct investment (FDI). The decline in FDI inflows from Mauritius to India since the treaty revision in 2016 is concerning.

The minister mentions that discussions regarding the DTAC amendment are ongoing. He noted that two key issues remain unresolved, which must be addressed before a protocol can be signed. A forthcoming session of a joint committee will focus on both the CECPA and DTAC to tackle trade imbalances and taxation concerns. Ramful acknowledged a downturn in exports from Mauritius to India, highlighting the importance of this renegotiation.

Since 2000, Mauritius has invested a cumulative total of $175 billion in FDI into India, constituting 25% of India’s total FDI inflows. Nevertheless, the 2016 amendment aimed at curbing tax avoidance has led to a fall in FDI from Mauritius, with a significant drop from $15.72 billion in 2016-17 to $6.13 billion in 2022-23. Despite this trend, Mauritius remains India’s third-largest FDI source as of 2022-23 and has seen a rebound to $7.97 billion for the fiscal year 2023-24.

Additionally, Minister Ramful expressed a desire for Mauritius to have equivalent treatment as Singapore in investment considerations. He asserted that Mauritius aims to regain its position as a prime investment destination by reminding Indian investors of its potential as a strategic gateway to Africa’s large consumer market. Ramful encouraged Indian businesses to utilize Mauritius as a platform for investment.

The Indian High Commissioner to Mauritius, Anurag Srivastava, conveyed that significant agreements are anticipated during Prime Minister Narendra Modi’s upcoming visit, which aims to strengthen economic relations between the two nations.

In conclusion, Mauritius’ efforts to amend the DTAC with India reflect its intent to strengthen economic ties and revive its role as a major investment conduit. The discussions surrounding amendments to the CECPA and the emphasis on treating Mauritius comparably to Singapore are pivotal for enhancing investment flow. The strategic positioning of Mauritius as a gateway to Africa further emphasizes its potential in attracting Indian investment, which is expected to grow with new agreements during upcoming diplomatic engagements.

Original Source: www.business-standard.com