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India and Mauritius close to economic treaty


India and Mauritius close to economic treaty

February 12, 2007

PAILLES, Mauritius (Reuters) — Mauritius and India are finalising a comprehensive economic pact and discussing their existing tax agreement, officials said on Monday at the start of a trade fair on the Indian Ocean island.

The Comprehensive Economic Cooperation and Partnership Agreement (CECPA) will include deals on goods, services, investment, and economic cooperation, officials said.

"Almost the entire text of the CECPA has now been finalised, with the exception of one or two points, on which the two sides remain in touch," a source at the Indian High Commission in Port Louis said in an e-mailed response to Reuters’ questions.

"The CECPA is intended to be a truly comprehensive document and will provide an over-arching framework for strengthening (economic links) over the next few decades," he said.

The two countries are also discussing a double tax avoidance treaty, which has made Mauritius a top source of foreign investment into India, the high commission official said.

Critics say the agreement is a way for Indian companies to avoid paying capital gains tax in India.

Rajesh Jeetah, Mauritius minister of industry and commerce, told Reuters that Mauritius had asked India for duty-free access for a million pieces of high value-added textiles and Mauritian rum.

In the first nine months of 2006, Mauritius bought goods worth more than 9.3 billion Mauritius rupees ($278.9 million) from India, compared with total Mauritian exports of just 273 million ($8.2million) to the south-Asian economic powerhouse.

With a market of just 1.2 million people, Mauritius is also attractive to Indian businessmen for its strong cultural similarities, and its membership of African trade blocs.

 source: NDTV