India And Mauritius Pursue CEPCA Talks

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

23 August 2005

After a first round of Indo-Mauritian talks in New Delhi earlier in the month on implementation of the recently signed Comprehensive Economic Cooperation Partnership Agreement (CEPCA), a second round has been set for 9th and 10th September in Port Louis.

Mauritian foreign secretary Anand Neewoor and his Indian equivalent, S N Menon, are focusing on the measures necessary to ensure that the CEPCA will come fully into effect in 2006. The Indian government hopes it will encourage domestic entrepreneurs to invest both in Mauritius and across the whole region.

"This agreement outlines the contours of a new era of commercial co-operation between our two countries", says Anand Neewoor, who led the Mauritian delegation in New Delhi. Experts from the two countries identified four axes around which the agreement will be elaborated: commerce, investment, economic co-operation and technical assistance to help make Mauritius a centre of excellence.

The Minister said he was hoping for rapid progress, although there were technical issues which needed careful study.

As a first step, the parties had identified a list of products which will benefit from preferential commercial treatment, and three committees had been set up in Mauritius to cover the main areas of co-operation: the commerical dossier is under the presidency of Asad Bhuglah, head of the Policy Unit of the Ministry of International Commerce; the investment dossier has been given to Gérard Sanspeur, Director of the Board of Investment; and Guy Wong So, Director of Economic Development will be responsible for economic co-operation.

The Indian-Mauritian CEPCA, which is primarily aimed at liberalising trade in goods and services and facilitating joint ventures, also encompasses the existing double taxation avoidance agreement between the two countries, seemingly fire-proofing it against further attacks from India's CBDT.

Mauritius is in competition with Singapore, with which India recently signed a similar CEPCA. The India/Singapore CECA encompasses trade in goods, trade in services, investment protections and other features. Mutual Recognition Agreements will eliminate duplicative testing and certification of products in specific sectors, and co-operation chapters will encourage and facilitate bilateral cooperation in several sectors. The CEPCA process also encompassed a review of the existing Avoidance of Double Taxation Agreement between India and Singapore. Direct comparison of the two DTAAs is far from simple, but it seems that the Mauritian treaty may retain some advantages in the area of capital gains.

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