Since the time when the diplomatic relation between India and Mauritius was established in 1948 and when Mauritius became an independent nation in 1968 to the present day, the “bond” between the two sovereign states has always been ‘Special’ due to the historical and cultural link between the 2 countries.
Besides the historical and cultural relationship between Mauritius and India, both countries are developed close economic ties through various bilateral agreements for trade and investments. Post-independence, several Indian Public Enterprises had established their presence in Mauritius such as the Bank of Baroda, the Life Insurance Corporation, State Bank of India Since then, the Governments of both countries had constantly engaged in nurturing that bilateral cooperation by signing line of credit financing, signing of a Double Taxation Agreement (DTA) between Mauritius and India in 1983, Investment Promotion and Protection Agreement etc, to name a few.
However, the boost to that cooperation has been Mauritius’s emergence as a financial centre in 1992 which coincided with the opening of the Indian economy coupled with the Mauritius/ India Double Taxation Agreement. The benefits of routing investment into India via Mauritius were considered to be so obvious that between 1997 and 2002 Mauritius became the major foreign investor into India. A rank which Mauritius has proudly maintained till now.
Like all relationship, the collaboration between Mauritius and India was set to evolve as well. Thus, in 2016, the DTA between Mauritius and India was amended but this did not sign the death of Mauritius as a route for investments into India. New tax planning opportunities and in particularly, on the debt funding through preferential interest rate under the revised DTA, has emerged.
The relationship between Mauritius and India goes beyond a DTA and will further strengthen, with India offering a grant equivalent to Rs 12.7 billion to support five vital projects. The five major projects are: The Metro Express light rail project, costing Rs 9.9 billion; a New Supreme Court building at a cost of Rs 1.1 billion; Rs 500 million for the provision of tablets to primary students; construction of 1,000 housing units costing Rs 700 million and a new ENT hospital for Rs 500 million. These projects “will be game changers in five sectors which are crucial to our development, namely public transportation, education, health care, social housing and the judiciary.” The light rail project, on the cards for decades, seems to have finally reached the end of the tunnel.
Furthermore, Mauritius is on the verge of concluding the Comprehensive Economic Cooperation Partnership Agreement (CECPA) with India. This is required to further boost trade and investment relations. It is proposed that a Mauritius-India Infrastructure Development Fund be set up for the mutual benefit of both countries and for investment in the region. Both countries also want to work towards a Triangular Cooperation (India-Mauritius-Africa) that can leverage on Mauritius wide network of bilateral and multilateral cooperation arrangements in the region. This will enable both India and Mauritius to tap new markets and promote greater cross border investments in Africa. By doing so, India will be able to emerge as a key partner in the government’s New Africa Strategy. Other areas of collaboration will be in the field of film making, with the emergence of a Mauritian Film Industry high on the agenda; a further boost to the ICT sector with new value-addition investment; a Pharmaceutical Village is also in the pipeline, with the objective to cater for local needs and that of the region.
Given that Mauritius has positioned itself as a hub bridging Asia and Africa, it offers promising prospects of triangular cooperation between India and Mauritius and African countries such as South Africa, Kenya, Senegal, Ghana, etc. Mauritius being multilingual has the advantage of acting as a facilitator to Indian companies especially to Francophone countries thereby offering immense possibilities of cooperation.
To conclude, the Indian economy is growing at a fast rate and its outward looking strategy to invest abroad fits well with Mauritius as an IFC of repute and substance. This partnership has stood the test of time and no doubt, will thrive further to the benefit of both countries.