April 2015 \ World News \ Diaspora—Southern Indian Ocean
Binding India and Mauritius

India in March further cemented its ties with Mauritius with the commissioning of an India-built coast guard patrol vessel, a day after inking five agreements and announcing a USD 500 million line of credit, as Prime Minister Narendra Modi—stressing the strategic importance of the Indian Ocean region—pressed for a strong grouping of the region’s nations.

Mr Narendra Modi, who arrived from Seychelles on March 11, 2015, is the first Indian prime minister to visit three Indian Ocean Region countries at one go. He travelled to key neighbour Sri Lanka on March 13, 2015. His five-day three-nation visit came amid China’s moves to increase its footprint in the key region, through which a large chunk of the world trade, including in oil, passes.

Mr Modi also strongly emphasised upon the close people-links between the two countries by his visit to the Ganga Talao temple, where he offered oblations at the Shiva temple. He also visited the Aapravasi Ghat where the Indian indentured labourers had arrived 100 years ago and delivered the talk at a civic reception at the Mahatma Gandhi Institute. He praised the contributions of the Indian-origin people who form 70 percent of the country’s population.

In his speech at the National Assembly, Mr Modi said the destinies of both nations were “linked by the currents of the Indian Ocean”. Addressing the National Parliament of Mauritius, Mr Modi assured that both sides would work to avoid the “abuse” of the double taxation avoidance convention and that India will “do nothing to harm this vibrant sector of one of our closest strategic partners”. Both sides have been negotiating to amend the Indo-Mauritius tax treaty amid India’s apprehensions that it was being misused to route unaccounted money and evade taxes through round-tripping.

Round-tripping is usually referred to routing of domestic investments through Mauritius to take advantage of the Double Taxation Avoidance Agreement (DTAA) between the two countries. Mauritius is one of the top sources of foreign direct investments (FDI) into India. Mr Modi also said that Mauritius has always maintained that there has been no concrete evidence of any such misuse and that it has strict checks and balances in place. However, the uncertainties over the tax pact have adversely affected investment flows between the two nations.

On March 11, 2015, Mr Modi held talks with his Mauritian counterpart Anerood Jugnauth and both sides inked five agreements, including one to tap the rich marine resources of this Indian Ocean island nation. India also offered USD 500 million concessional Line of Credit to Mauritius for key infrastructure projects.

Among his numerous engagements on March 12, 2015 was the commissioning of the India-built patrol vessel, Coast Guard Ship Barracuda, the first such vessel to be exported by India. Mr Modi and Jugnauth participated in the event.