India offers $500 mn credit to Mauritius, inks five pacts

Prime Minister, Narendra Modi meeting the President of Mauritius, Rajkeswur Purryag, in Mauritius on March 11.

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SME Times News Bureau | 12 Mar, 2015
India signed five pacts with Mauritius and also offered USD 500 million concessional line of credit for key infrastructure projects as Prime Minister Narendra Modi met his Mauritian counterpart Anerood Jugnauth in Port Louis on Wednesday.

The five agreements signed between the two countries included one to tap the rich marine resources of the Indian Ocean island nation of Mauritius.

Modi, who arrived here earlier in the day from Seychelles, said Jugnauth and he had "discussed our shared interests in a safe and secure Indian Ocean and a stable and prosperous Indian Ocean Region. We value the leadership by Mauritius in this area".

He noted that India and Mauritius have built a relationship of "matchless strength and character".

Modi said that India would quickly build a petroleum storage and bunkering facility in Mauritius.

The two countries had last year inked a MoU for Indian Oil Corporation (IOC) and Mangalore Refinery and Petrochemicals Limited (MRPL) to set up oil storage terminals in the island country.

The terminals are expected to boost trade in petroleum products in the region and improve the supply of oil in Mauritius.

The project would also help in the re-export of petroleum products to the different islands across the Indian Ocean as well as to Africa. The cost of the project is estimated ton be over USD 130 million.

Mauritius' State Trading Corporation imports about 1.2 million tonnes of petroleum products, but has no storage tanks.

Modi also offered support for setting up a second cyber city in that country. India had helped to build the first cyber city in Mauritius a decade ago. "Its remarkable success reflects the strategic foresight of Mauritius in diversifying its economy," said Modi.

The MoU for the improvement in sea and air transportation facilities at Agalega Island of Mauritius provides for setting up and upgrade of infrastructure for improving sea and air connectivity at the Outer Island of Mauritius.

Modi said that the agreement on the development of the Agalega Island "is a major stride in our cooperation in infrastructure sector. It demonstrates the depth of our mutual confidence".

He stated that the two sides would continue their dialogue on revising the Double Taxation Avoidance Convention, which is based on "preventing abuse of the Convention, while enabling Mauritius to benefit fully from this arrangement".

"However, I have assured Prime Minister (Jugnauth) that we will do nothing to harm this critical sector of one of our strongest strategic partners in the world. I also conveyed our deep appreciation for the support and cooperation offered by Mauritius on information exchange on taxation," he said.

Negotiations to amend the India-Mauritius tax treaty have been hanging fire for a long time amid India's apprehensions that it is being misused to route unaccounted money and evade taxes.

There have been allegations of “round-tripping”, or the 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.

Jugnauth, in his speech, said that the commissioning of the Indian-built Coast Guard Ship “Barracuda” on Thursday would mark a new high in their cooperation.

Both leaders discussed the setting up of a specialised cancer hospital in Mauritius, discussed plans for water treatment, and to make Mauritius into a cyber island, according to Jugnauth.

The CGS Barracuda is the first naval ship to be built by India for a foreign nation. The USD 58.5 million ship has been built by defence PSU Garden Reach Shipbuilders and Engineers Limited (GRSE) in Kolkata.

The two countries inked an MoU in the field of ocean economy that provides for mutually beneficial cooperation for exploration and capacity development in the field of marine resources, fisheries, green tourism, research and development of ocean technology, exchange of experts and other related activities", according to an official statement.

The Indian prime minister noted that the agreement on cooperation in ocean economy was an important step in the bilateral scientific and economic partnership.

The two sides also inked an agreement for importing Indian mangoes, for cultural cooperation during 2015-18 and on cooperation in the field of traditional system of medicine and homeopathy.

On Thursday, Modi will be chief guest at the Independence Day celebrations in Mauritius.

He will address the Mauritian parliament on March 12 and will visit the Ganga Talao and Appravasi Ghat, both of which are associated with the arrival of Indian indentured labour to Mauritius. He will also visit the Mahatma Gandhi Institute.