Mauritius says India top-priority partner for funds flow

NEW DELHI: Mauritius has said it has high regards for India and was its 'top-priority' partner when it comes to channelising flow of global investments, but wants its competitiveness to remain intact in terms of tax treaties.

The island nation off the African continent coast accounts for more than one-third of foreign investments coming through FDI ( Foreign Direct Investment) and FII ( Foreign Institutional Investments) routes to India.

Many global investors prefer to channelise their Indian investments through Mauritius due to the tax benefits coming out of the DTAA (Double Taxation Avoidance Treaty) between the two countries and favourable regulations in the island nation.

"The foreign investors select Mauritius for routing their Indian investments because of the good relationship between the two countries and India as a top-priority partner in this regard," Mauritius' securities market regulator Financial Services Commission's CEO Clairette Ah-Hen told PTI here.

Ah-Hen was on a visit to India along with the country's financial services industry body Global Finance Mauritius (GFM) CEO Nikhil Treebhoohun and Mauritius' Board of Investment's Assistant Director Harvesh Seegolam.

Mauritius' competitiveness should not be undermined when it comes to renegotiating the treaty with India, they said referring to the new Tax Information Exchange Agreement being worked out between the two countries.

The officials further stressed that the existing DTAA between the two countries was good enough to take care of all the concerns, including those related to round-tripping and money laundering.

Mauritius has also been often accused of being a conduit for black money to and from India. However, Ah-Hen said that Mauritius is "extra careful" when dealing with funds going to and coming from Indian entities, as compared to those of other countries.

"We have high regards for India and given the importance given by Mauritius to it, we are much more serious when funds are going to India... If the funds are going to say China or Africa, we do not have to do that. But, there are special conditions for India and we make sure that these are fulfilled," she said.

"... There are special conditions, which we have named 'Indian Conditions', for funds found to be linked to entities of Indian origin both in terms of inflows and outflows through Mauritius," the FSC Chief said.

Breach of 'Indian conditions' can lead to revocation of business license to operate out of Mauritius, Ah-Hen said.

Besides, Mauritius is more than eager to share details with India about persons and companies suspected of financial irregularities and complies to all such requests, except those found to be plain 'fishing expeditions' or involving legal implications, she added.