Sushma Swaraj assures Mauritius on bilateral tax treaty

India told Mauritius that it will not take any decisions that will "adversely impact" bilateral relations while reassuring the country that amendments to the bilateral tax treaty would be made only after considering the legitimate interests of both sides.

This was conveyed by External Affairs Minister Sushma Swaraj during her meetings with top leadership of Mauritius including President Rajkeswur Purryag and Prime Minister Navinchandra Ramgoolam.

She assured them that "India was in the process of reviewing the Double Taxation Avoidance Agreement (DTAA) and will not do anything to that will adversely impact the island nation's ties with India," official sources told PTI.

Swaraj, who is here on a three-day visit, also said that enhanced bilateral relations between the two countries will benefit people-to-people contacts. She recalled that the first batch of Indians had arrived in Mauritius on November 2, 1834.

Earlier, terming the India-Mauritius double taxation avoidance convention an important agreement between the two countries, External Affairs Ministry spokesperson Syed Akbaruddin said both countries would ensure that their "legitimate interests" would be secured in any new agreement.

"Discussions on this are an ongoing issue and once these are ready and there is agreement between the two countries, we will then move to the next step of amending it.

"We have an agreed format in which all issues on this matter are being discussed. Given the nature of our close bilateral relations and ties, we are confident that we will take into account each other's concerns and interests while making any changes to it," the spokesperson said.

A proposed revision of the tax treaty has been hanging fire for a long time amid differences between the two countries. India has been seeking to make the agreement stronger to check any possible round tripping of Indian funds through the island nation.

Mauritius has been one of the biggest sources of FDI into India, which attracted inflows of $77.77 billion FDI from the country between April 2000 and January 2014.

In 2012-2013, India exported goods worth $1.31 billion and imported goods worth $28.49 million. India's exports to Mauritius comprise largely petroleum products.