Mumbai, 22nd November, 2016 (GPN) : The initial treaty was the double taxation avoidance, it was helpful to both Mauritius as well as India because many investments were coming to India through Mauritius.
The relations between India and Mauritius have always been very strong and I see no reason that it will be otherwise. It will be very strong we are doing everything to make it stronger,” Mauritius Prime Minister Sir Anerood Jugnauth told on a luncheon meet with business leaders organized by All India Association of Industries (AIAI) in association with Indo-Mauritius Chamber of Commerceand World Trade Centre, Mumbai.
The initial treaty was the double taxation avoidance, it was helpful to both Mauritius as well as India because many investments were coming to India through Mauritius. Even now, as negotiations are underway, Mauritius is hopeful of remaining the largest source of foreign investments into India even under the new treaty, Jugnauth stressed.
The Prime Minister of the Island nation said economic and diplomatic ties between the two nations have been on an upswing and pointed out that there are already lots of investments by Indian people so he does not see any reason why it should not continue. Jugnauth, further said that they had no other option but to negotiate with India after the Indian government decided to put an end to the decades old treaty, however, we are still negotiating to have something new to replace it. The old treaty was obviously beneficial but to us and since it is not there we are losing the benefit that we were making as I said we had no other option.
Jugnauth replied about the impact of the abolition of the old treaty would have on the country’s economy, the Prime Minister said, “Mauritius is still having its financial centre which has not been affected to much extent and we are trying to diversify. We are also trying to make up for whatever loss the centre is facing. We have to live up to reality (abolition of the treaty), we can’t do otherwise.” Jugnauth said the country is trying to diversity and at the same time negotiating for new treaty.
“We have already said it to Prime Minister Narendra Modi that it (the new treaty) should not be less favourable than the treaty that India would be making with other countries which they used to have in the treaty before. India would do everything not to make us lose therefore we are still negotiating. I can’t say what will be the final result.”
As per the protocol, India would be taxing on capital gains arising from sale/transfer of shares acquired on or after April 1, 2017. The protocol protects investments in shares acquired before 1st April, 2017, that is existing investments made before 1st April, 2017 have been grandfathered and will not be subject to capital gains taxation in April next, Jugnauth added.
According to statistics, foreign Investments in India from Mauritius has been around 33% since 2000 and in FY 2016, it was 21%. The foreign funds owned over 28% in the Sensex and Nifty stocks.
Mauritius Prime Minister Jugnauth said that the government was offering various incentives for film industry to promote, as we have all the infrastructure and one of the best locations to use for producing films.
Vijay G. Kalantri, President – All India Association of Industries (AIAI) in his welcome address said that various taxes, holidays and investments for global corporation, film development for giving boost to SME Sector in the recent budget by financial services and also to specially encourage excellent idea on the Pharmaceutical Sector in order to export to African market.
Kalantri said that besides this, the Second Sector which Mauritius envisages to develop is the gold sector which India already has enough capabilities in terms of designs and workmanship. This will encompass a wide spectrum of high value-added activities, ranging from refinery of gold, producing gold bars, setting up top end jewellery processing units, vault facilities and to trading of gold and bullions on the new commodity exchange. The exchange is also supposed to facilitate trade in diamond and other precious metals.
In the automotive sector, and Indian Delegates has already visited Mauritius and has expressed an interest in setting up several manufacturing projects in Mauritius, one of which is the production of bicycles and motorcycles. This project aims mainly at exports to the African market and has the potential for creating a significant number of jobs, Kalantri added.
The meeting was attended by various Industrialists, Bankers, K. Napaul – Consul General of Mauritius, Lady Sarojini Jugnauth – Spouse of Rt Hon’ble Prime Minister of Mauritius, Cabinet Chief – Medha Gunputh and others.
