India – Mauritius Relations

General Studies Paper -2

Context: Recently, the Prime Minister of India and Mauritius jointly inaugurated an airstrip, jetty, and 6 other projects to ensure maritime security and connectivity to Mauritius’ Agalega islands.

About the India and Mauritius Relations

• India and Mauritius share a deep and historical bond, with Indian origin people comprising nearly 70% of the island’s population.
• The relationship between the two nations is rooted in shared history, culture, and democratic values.

Historical Ties:

• The first Indians were brought to Mauritius from the Puducherry region in 1729 to work as artisans and masons.
• Under British rule, about half a million Indian indentured workers were brought to Mauritius between 1834 and the early 1900s.
• About two-thirds of these workers permanently settled down in Mauritius.

Diplomatic Relations:

• India established diplomatic relations with Mauritius in 1948, even before the independence of Mauritius.
• India was represented by an Indian Commissioner in British-ruled Mauritius between 1948 and 1968 and thereafter, by a High Commissioner after Mauritius became independent in 1968.

Economic Cooperation:

• India and Mauritius signed a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) in 2021.
• Under the CECPA, India and Mauritius would provide preferential access to a number of items like surgical equipment, medicine, and textile products that would cater to market requirements on both sides.
• Bilateral tradehas been disproportionately in favour of India. (For the FY 2022-2023, Indian exports to Mauritius was USD 462.69 mn, Mauritian exports to India was USD 91.50 mn and Total trade was USD 554.19 mn).
• It has grown by 132% in the last 17 years, from USD 206.76 million in 2005-06 to USD 554.19 million in 2022-23.
• FDI:Cumulative FDI worth USD 161 billion came from Mauritius to India in the two decades from 2000 – 2022 (26% of total FDI inflows into India).
• FDI inflows from Mauritius have dropped from USD 15.72 bn in 2016-17 to USD 6.13 bn in 2022-23, with Mauritius becoming India’s third largest source of FDI.
• Indian Public Sector Undertakings (PSUs) in Mauritius:At present, 11 Indian PSUs are in Mauritius which include Life Insurance Corporation, Indian Oil (Mauritius) Limited, State Bank of India (Mauritius), Rail India Technical and Economic Service (RITES) etc.

Defence Cooperation:

• India is the preferred defence partner of Mauritius for acquiring platforms/equipment, capacity building, joint patrolling, hydrological services, etc.
• Indian defence officers are deputed to the Mauritian Defence Forces. An Indian Navy officer heads the Mauritian National Coast Guard; an Indian Air Force officer commands the Police Helicopter Squadron and an Indian Naval Officer heads the Mauritius Hydrography Services.
• In February 2021, India extended a Line of Creditof USD 100 mn to Mauritius for procuring defence products, under which Mauritius has already sourced a Passenger Variant Dornier aircraft and an Advanced Light Helicopter Dhruv.
• SAGAR:India recalled that it was in Mauritius, during 2015 that India’s maritime cooperation vision of SAGAR – ‘Security and Growth for All in the Region’ was outlined.

Others:

• India has traditionally been the ‘first responder’ for Mauritius in times of crisis, including during the recent Covid-19 and Wakashio oil-spill crisis.
• Mauritius has become the first country to join India’s Jan Aushadhi initiative which will benefit the people of Mauritius by providing better quality Made-in-India generic medicines.
• RuPay cards and UPI connectivity between two countries were established.

Associated Challenges and Concerns

• Tax Treaty Misuse:The Double Taxation Avoidance Agreement (DTAA) between India and Mauritius had been a point of concern due to its potential misuse for illicit activities like money laundering and round-tripping of funds.
• It led to amendments in the treaty in 2016 and the implementation of the General Anti-Avoidance Rule (GAAR) in 2017.
• Chagos Archipelago Dispute:It is an issue of sovereignty and sustainable development before the United Nations.
• In 2019, India voted at the U.N. General Assembly in support of the Mauritian position on the issue.
• Security Concerns:With Mauritius emerging as an important maritime entity in the Indo-Pacific region, security concerns are paramount.
• India and Mauritius have a strong defence partnership, but maintaining and enhancing this partnership in the face of evolving regional dynamics can be challenging.
• Logistical and Bureaucratic:While India and Mauritius have a robust development partnership, the ongoing implementation of various infrastructure projects and the delivery of promised assistance can pose logistical and bureaucratic challenges.

Conclusion

• The relationship between India and Mauritius is multifaceted and has grown stronger over the years. The two nations continue to work together in various fields, including infrastructure, FinTech, culture, and more.
• The special ties between India and Mauritius are a testament to their shared history, cultural affinities, and mutual respect.