New Delhi, Feb 16 () : Mauritius has offered zero customs duty to Indians setting up businesses in the island. This will also give India preferential access to Europe and African markets since Mauritius has a tax treaty with these countries.
Sayyad Abd-Al-Cader Sayed Hossen, Minister for trade spoke to his Indian counterpart Anand Sharma ahead of the meeting between the two countries to review the tax treaty. There has been widespread complaints from market regulator SEBI that most of the investments that flow from Mauritius are from companies with only a post box number. These companies which do not pay any tax set up shop in India or invest in stocks but have not any investment in the country of origin.
Many of the intelligence agencies suspect that these investments are companies that are sending black money hoarded abroad by Indians and some companies after registering in the island are coming to India to escape from paying tax. A review of the tax treaty was on the cards. India’s demand is that only those companies who have invested in Mauritius should be eligible for the tax treaty.
Common market for Eastern and Southern Africa (COMESA) and the duty-free quota (DFQ) regime with EU with Mauritius will give Indian business easy and cheaper access to these markets. Minister Anand Sharma has proposed a textile park in the island to step up exports to African countries. Mauritius is a free port and a hub for African countries.
Yet another move is to float a joint business council between two countries. This move is to create more business activities and sort out any issues. This was mooted by Anand Sharma to further strengthen the business ties. The island nation offers excellent warehousing and transshipment facility for exporters. In 2011-2012 trade between two countries grew by 68% and it is expected to cross the last year limit.