Mauritius today expressed hope to remain one of the biggest investment routes to India post revision of the bilateral tax treaty, as the two nations move ahead with talks on trade liberalisation pacts.
After meeting Finance Minister Arun Jaitley, Mauritian Minister of Finance and Economic Development Pravind Kumar Jugnauth said the negotiations on Preferential Trade Agreement (PTA) and Comprehensive Economic Cooperation Partnership Agreement (CECPA)are moving ahead.
“In fact, there is now a delegation from Indian side visiting Mauritius. There has been a preliminary draft agreement which will need to be further looked up and discussed.
“We are looking forward that through that agreement we can extend opportunities for both Mauritius and India. We have to increase trade and investment,” he said.
When asked if FDI inflows to India from Mauritius will reduce following revision of the bilateral Double Taxation Avoidance Convention (DTAC), Jugnauth expressed hope that the island nation will continue to “play the role of the biggest investment route to India” because it benefits both the nations.
“We need to monitor the situation and we will review and discuss as and when there is necessity,” the visiting minister added.
He said the two countries have successfully agreed for changes and the protocol on DTAC has already been signed.
“We are looking now how to consolidate the relationship between India and Mauritius,” he said.
After long-drawn negotiations, the amendment to the 1983 DTAC was signed by India and Mauritius in May. With the changes, India can impose capital gains tax on investments routed through Mauritius.
For two years starting April 1, 2017, capital gains tax would be levied at 50 per cent of the prevailing domestic rate and after that, full rate would be applicable.
Mauritius accounted for 33 per cent of the total FDI inflows to India during April 2000 to March 2016.
Jugnauth also expressed hope that India would support Mauritius in number of major projects it was implementing.