Mauritius seeks amendment in double taxation avoidance convention with India: Foreign Minister

Port Louis: Mauritius is pressing for amendments to its trade agreement, including Double Taxation Avoidance Convention (DTAC) with India, Foreign and Trade Minister Dhananjay Ramful said.

In an interview with PTI Videos at his office in Port Louis, he underscored the need to revisit the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) to restore Mauritius’ position as a preferred investment conduit, as foreign direct investment (FDI) inflows from the island nation to India have declined sharply since the treaty’s revision in 2016.

“Amendment in DTAC is still under discussion. Two issues, I think, need to be sorted out. From what I’ve been told, once this is sorted out, then they will sign the protocol,” he explained, hinting at unresolved sticking points in the negotiations.

The minister announced that a second session of the joint committee will convene soon to revisit both the CECPA and the DTAC, aiming to address trade imbalances and taxation issues.

“We have signed the CECPA, the comprehensive free trade agreement with India. And, there is a dip from the Mauritius side. We don’t export that much to India,” Ramful told PTI Videos.

Since 2000, Mauritius has channeled a cumulative USD 175 billion in FDI into India, accounting for 25% of India’s total FDI inflows. However, following the 2016 amendment, which introduced measures to curb tax avoidance, FDI inflows from Mauritius have plummeted from USD 15.72 billion in 2016-17 to USD 6.13 billion in 2022-23.

Despite this decline, Mauritius remained India’s third-largest FDI source in 2022-23. For the fiscal year 2023-24 (April–March), FDI equity inflows from Mauritius rebounded to USD 7.97 billion, elevating it to the second-largest source of FDI into India after Singapore. For the first quarter of 2024-25 (April–June), inflows stood at USD 3.21 billion.

Ramful also emphasized Mauritius’ demand for parity with Singapore. “We want to make sure that we get the same or better consideration, if not the same, that is being given to Singapore,” he stated, signaling the country’s intent to reclaim its edge as a top investment hub.

Beyond taxation, Ramful pitched Mauritius as a strategic gateway for Indian investors targeting Africa’s 1.3 billion consumers. “Indian investors should also take the opportunity of using Mauritius as a platform, as a gateway to invest in Africa… Mauritius is there as a platform where we can facilitate and provide incentives,” he said.

The Indian companies have already invested over USD 200 million in Mauritius in the last five years, a figure Ramful hopes will grow with enhanced bilateral frameworks.

In an interview with the PTI Videos, Indian High Commissioner to Mauritius Anurag Srivastava, on Sunday said India and Mauritius are likely to sign “significant agreements” during Prime Minister Narendra Modi’s two-day state visit starting March 11 to advance economic ties.