Interview – Indian High Commissioner HE Shri Anup Kumar Mudgal

“Our relationship transcends politics, economics, or other developments

* ‘The revised India-Mauritius DTAC provides certainty and predictability to the financial services sector on both sides’

His Excellency, Shri Anup Kumar Mudgal, is due to leave Mauritius shortly after completing his term as High commissioner of India to Mauritius. While at the general public’s level, relations couldn’t have been better, what with our existing strong cultural ties or the decision of the Indian government to accord an even better status to PIO card holders by changing it into the Overseas Citizens of India as decided by India’s Prime Minister, Shri Narendra Modi, concerns have been raised in Mauritius’ business sector about the recent revisions to the Double Taxation Avoidance Agreement between the two countries. Many in the sector feel that Mauritius has lost in the revision process. We asked Shri Mudgal whether things had really taken a turn for the worse between the two countries. He doesn’t think so, holding out that the recent revisions to the Treaty have increased certainty for investors and that there are many other considerations, notably a “balanced and forward-looking solution” and that Mauritius “is not disadvantaged”. He considers that our bilateral relation depends on several other factors – political, economic social, cultural and educational – than the capital gains tax at the root of current controversy about changes brought to the DTAA and that they remain strongly embedded between the two countries.

* It’s too bad, isn’t it, that the revision of the Mauritius-India DTAA, which has generated considerable controversy locally, has come up at this particular point in time when you have almost reached the end of your term of appointment as High Commissioner of the Republic of India to Mauritius, almost sidelining the milestone achievements that have accrued in the relations between our two countries?

I don’t see it that way at all – in fact, as you must be aware, the consultative dialogue process for revision of the India-Mauritius DTAC has been underway for years – the recent Protocol is the long overdue outcome of that process, and in fact we are extremely satisfied that we have arrived at such a balanced and forward-looking solution, that finally provides certainty and predictability to the financial services sector on both sides.

* The latest Moody’s observations on the revised treaty to the effect that it “credit negative” given that Mauritius’ “financial centre will be a less attractive platform for investing in India than it used to be” are at variance with the Indian point of view. Moody’s is in effect echoing what the Mauritian authorities have been saying down the years. What has changed now which would suggest that the Indian government would not be willing anymore to accommodate the concerns of this country?

To the contrary, the India-Mauritius DTAC has been an important instrument that has served both countries well over the years, and it will continue to do so, now that it better meets the requirements of the fast changing global scenario. As the offshore business community itself knows, the financial services sector is constantly evolving. There is an across the board move towards a more transparent, compliant, and substantive framework for modern financial products and services, including a move towards source-based taxation of capital gains. Neither Mauritius nor India can afford to get left behind in this definite process.

The uncertainty as a result of the prolonged negotiations was proving detrimental to this sector. It is precisely in view of our very special bilateral relationship that all steps were taken during the negotiations to ensure that Mauritius is not disadvantaged in any way, and that sufficient safeguards and provisions are provided for the transition period. These amendments will not only make the DTAC more robust and sustainable in the long term, but also pave the way for a new era of India-Mauritius financial sector engagement.

We must remember that the DTAC provisions on capital gains are only a small part of the many factors that have contributed to our special relationship in this sector. The other benefits of the DTAC will remain. This, coupled with the inherent advantages of the Mauritian Financial Centre and its well-established financial and governance eco-system, will make Mauritius an even more competitive and dependable destination for investors.

* Notwithstanding the official discourse in favour of the consolidation of the Indo-Mauritius relationship in all domains, it has been argued that ‘that relationship cannot escape the inevitable adjustments resulting from the new role and ambitions which India is setting for itself in the new emerging World Order’. From the Indian perspective, does it look as if history as well as affective and cultural affinities will henceforth have less weight in that relationship? Need Mauritius have any apprehension on this score?

I do not see why – in fact the new ‘emerging world order’ you speak of only makes our unique partnership even more relevant and essential. As multi-cultural, pluralistic democracies, we share a common vision for inclusive and sustainable socio-economic development of our people. Our bilateral partnership does exactly that, extending to every imaginable aspect of governance – political, economic, social, cultural or educational. Prime Minister Shri Narendra Modi, during his visit here last year on the occasion of your National Day, reiterated this when he outlined the future vision for this extraordinary relationship, anchored firmly not only in our historical and cultural ties, but also by our common commitment and interest in ensuring peace and prosperity in our shared neighbourhood.

* While Mauritius’ ties with India have remained strong, there is a feeling that recent developments have not helped to strengthen them further. Take for example the soft loan of nearly 20 billion rupees to Mauritius for the financing of the Light Rail Transit system, which was thereafter abandoned by the new government which took over in December 2014. Do decision-makers in India feel this switch as a rebuff to our traditional excellent relationships?

There is never any question of ‘rebuff’ among friends and brothers! India has been a steadfast partner in the socio-economic development of Mauritius from the very beginning, be it capacity and institution building or iconic landmarks such as the Cyber City and SVICC. This support and assistance is never prescriptive – it is always based entirely on the priorities and needs of the Mauritian people, as articulated by its Government. India will remain proud to be associated with any priority projects chosen and identified by your government.

* In the present global situation of generally low economic growth, including among Emerging Economies, India with a rate of growth of 7.5% in 2015 is shining out as an exception to this depressing global state of affairs. To sustain this pace, Indian entrepreneurs would surely link up even more closely with the rest of the world. How does Mauritius fit in this picture?

You are right, the positive Indian economic growth story means that Indian business are constantly looking for opportunities around the world – and Mauritius no doubt has immense potential to be a part of this process. Mauritius is uniquely placed to develop as hub not only for Indian Ocean trade, but also as a ‘gateway’ to reach the tremendous economic and business opportunities in Africa. This is a forward-looking and progressive, investor-friendly country with well-developed and modern infrastructure and communication facilities. Indian entrepreneurs and public sector undertakings are very aware of this, and are constantly reaching out and exploring these opportunities.

* Last year, the Indian government hosted an India-Africa Summit with a view to bring the countries together into a special relationship. What have been the achievements so far on this new chapter of India’s wish to develop a closer proximity with Africa?

The longstanding India-Africa partnership is built on a strong legacy and has a deep historical foundation. It is based on abiding principles of equality, mutual benefit, and complementarities. India’s engagement with Africa ranges from capacity and institution building, technology transfer, infrastructure development, peace keeping, to vibrant cultural linkages. The 2015 India-Africa Forum Summit (IAFS) you mention was in fact the third such Summit in the IAFS framework, and provided an excellent platform for further strengthening and renewing these bonds.

We were honoured that Prime Minister Sir Anerood Jugnauth headed the Mauritian delegation at the Summit. Several landmark initiatives were announced during the Summit, including a new dedicated line of credit for priority projects, and 50,000 new scholarships and training/skilling opportunities. Efforts are also being undertaken to implement sector specific initiatives in fields such as health, agri-business, medium and small scale enterprises, hydrocarbons, higher education, etc.

* Has Mauritius been considered as being able to play a role in this move, given our proximity with the African continent and our perennial affinities with India, on the other hand?

Mauritius has tremendous potential to develop as a ‘Gateway to Africa’. Many Indian entrepreneurs and public sector undertakings have already recognised this and are successfully using Mauritius as a platform for reaching African markets. Mauritius is also home to one of the flagship IAFS initiatives, the Pan-African E-Network, which links Mauritius, mainland Africa and India in telemedicine and distance education modes.

* On a personal level, you must have experienced, we presume, the warmth of our people’s feelings towards India and her citizens. What are the good impressions you will carry with you about factors that could consolidate the mutual good feeling between our two countries?

Every Indian is enamoured with Mauritius – but to truly appreciate the unique and extraordinary nature of the India-Mauritius relationship, it does help to spend some time here, which I was fortunate enough to do. I carry back with me precious memories of a beautiful country and even more beautiful people, who mirror the values and ideals that we so cherish in India. This relationship is one that transcends politics, economics, or other developments. It is rooted in our common heritage and our common vision for the future. This is why, for me, it is most important that the legacy of this relationship is passed on to our next generation – it is the youth of our two countries who will carry this beautiful story forward.

* Published in print edition on 20 May 2016

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