Mauritius seeks to amend its trade agreements with India, focusing on the DTAC and CECPA, due to a steep decline in foreign direct investment since 2016. Minister Ramful highlights the importance of restoring Mauritius’ investment appeal and asserts the need for equal treatment with Singapore. Additionally, Indian investments in Mauritius have exceeded $200 million, with expectations for growth as both nations enhance their economic ties.
Mauritius is advocating for revisions to its trade agreements, including the Double Taxation Avoidance Convention (DTAC) with India, as expressed by Foreign and Trade Minister Dhananjay Ramful. He noted the necessity to reassess the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) to regain the nation’s status as a primary investment conduit, especially given the substantial drop in foreign direct investment (FDI) from Mauritius to India since the treaty’s alteration in 2016.
The amendment to the DTAC remains under negotiation. Minister Ramful indicated that specific issues must be resolved before signing the protocol, suggesting ongoing complexities within the discussions. Additionally, he announced that a subsequent meeting of the joint committee would occur to review both the CECPA and the DTAC, addressing the persistent trade imbalances and taxation matters.
Mauritius has contributed an impressive $175 billion in FDI to India since the year 2000, representing 25 percent of the country’s total FDI. However, there has been a notable decline in these investments, dropping from $15.72 billion in the period 2016-17 to just $6.13 billion in 2022-23 due to the 2016 amendment focused on preventing tax evasion. Despite this downturn, Mauritius retained its position as India’s third-largest FDI source in 2022-23, and FDI from the island saw a recovery in the fiscal year 2023-24, increasing to $7.97 billion.
Minister Ramful expressed the desire for Mauritius to achieve parity with Singapore regarding investment considerations. He reiterated the island’s strategic role as a conduit for Indian investors looking to access Africa’s vast market of 1.3 billion consumers. He encouraged Indian businesses to leverage Mauritius as a platform to facilitate and incentivize their investments in Africa.
The commitment of Indian companies is reflected in their investment of over $200 million in Mauritius over the past five years, with expectations for this figure to rise given strengthened bilateral frameworks. Furthermore, Indian High Commissioner to Mauritius, Anurag Srivastava, stated that significant agreements between the two nations are anticipated during Prime Minister Modi’s upcoming two-day state visit, commencing on March 11, which aims to bolster economic relations.
In summary, Mauritius is taking active steps to amend its trade agreements with India, particularly the DTAC, to revitalize its investment appeal. Despite a decrease in FDI following the 2016 treaty changes, initiatives to restore bilateral economic cooperation and the promotion of Mauritius as an investment gateway to Africa aim to enhance mutual economic growth. Continued discussions and upcoming agreements between the two governments are pivotal in this endeavor.
Original Source: www.business-standard.com
