New Delhi: Mauritius is ensuring transparency in the financial services sector and there are no shell companies there, Mauritian minister Soomilduth Bholah has said as he pitched the island nation as the platform for Indian companies to tap the African market. In an exclusive interview with PTI in the national capital, Bholah said that Mauritius is looking for investments from India, which he described as an economic powerhouse.
Mauritius always promotes good governance and focused on transparency. The country would love to learn from India in each and every sector, the Mauritius Financial Services and Good Governance Minister said. The island nation, which has a long standing strong bilateral ties with India, is mainly looking for collaborative opportunities in the fintech space.
"It is a pleasure to be in India. I would say that while India is important for Mauritius, Mauritius is also important for India, especially in the financial services sector," he said. In response to a query on perception that there are concerns in certain quarters about the funds coming in from Mauritius, the minister said it is only a perception.
"It is only a perception... I can confirm that there are no shell companies in Mauritius. We are compliant with OECD (norms). "We are ensuring that there is transparency... we are promoting transparency and this is what we want to inform anybody who has an iota of that perception," he said. Mauritius is also a significant source of Foreign Portfolio Investments (FPI) coming into the Indian securities market and there were concerns about illegal routing of funds through shell companies.
The minister noted that the island nation has aligned its financial sector with international norms, including the OECD norms and FATF recommendations. The Financial Action Task Force (FATF) leads global action to tackle money laundering, terrorist and proliferation financing. The Organisation for Economic Co-operation and Development (OECD) is an international organisation and a key body on international taxation matters.
Official data show that Mauritius was the third largest source of Foreign Direct Investment (FDI) for India with an inflow of USD 6.13 billion in 2022-23. Mauritius International Financial Centre (IFC) acts as a hub for international banks, legal firms, corporate services, investment funds and private equity funds.
"(We are looking for investments) from India to Mauritius. We act as a platform between India and Africa, particularly and we have to show that to the Indian investors that we have progressed with regard to the ease of doing business," Bholah said. Highlighting various business aspects, the minister said Mauritius has various investment promotion and protection agreements and state of the art arbitration centre.
"The attraction is that we have a skilled workforce, we are bilingual, (through us) reach out to African countries. We have a good banking system, telecommunication and infrastructure here. These are (among) our forte," he said. According to India's external affairs ministry, cumulative FDI worth USD 161 billion came from Mauritius to India in the two decades from 2000-2022, and the amount was 26 per cent of the total FDI inflows into India.
However, since signing of the amended Double Taxation Avoidance Convention (DTAC) in 2016, FDI inflows from Mauritius have dropped from USD 15.72 billion in 2016-17 to USD 6.13 billion in 2022-23, as per the ministry. "We are not a competitor, we are more like a collaborator. This is what we want to tell India and Indian authorities... we look forward to more collaborations instead of competition (in the financial sector)," Bholah said.
Mauritius and India have a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) that came into force in April 2021. Under the CECPA, India's exports to Mauritius amounted to USD 1.1 million in 2021, USD 1.8 million in 2022 and USD 1.7 million in 2023 (Jan-Aug) comprising mainly textiles, quartz slabs and spices.
Mauritian exports to India under CECPA stood at USD 1 million in 2022 and USD 3.7 million in 2023 (Jan-Aug), comprising mainly medical devices and apparel. 15, as per the external affairs ministry. Currently, a high-level business delegation from Mauritius is on a ten-day visit to India and will be visiting the national capital, Chennai, Hyderabad and Mumbai.
"We are meeting so many stakeholders to enhance our collaboration and to show that we are here for India to go to Africa... I believe that it is wise for Indian investors to go through Mauritius platform rather than go individually and it will be beneficial for Indian investors," the minister said. The delegation, part of the Mauritius International Financial Centre (IFC) will conclude its visit on March 23.
After the visit of its mission to Mauritius in January, the International Monetary Fund (IMF) said the Mauritian economy rebounded strongly from the pandemic. "Advancing structural reforms, including by sustaining compliance with Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) standards, improving governance, reducing skill mismatches in the labour market, and fostering digitalisation and climate-resilient infrastructure investment is key to supporting private sector investment and promoting economic diversification," IMF's Mariana Colacelli said in a statement in February.
