Mauritius, a business-friendly platform for India

In the context of the Independence Day of India, which is commemorated on the 15th of August, Business Magazine unveils the current and future opportunities that Mauritius offers to Indian firms as well as the potential limiting factors.

Several Indian companies intend to use Mauritius as a springboard to expand in other countries of the Indian Ocean region or even Africa. The Chief Manager of New India Assurance, S. Vaideswaran, stated to Business Magazine that “with SADC and COMESA concepts coming up, we would definitely expand our presence in this part of the world, and surely Mauritius will be the nucleus for this process.”

Furthermore, Fortis Healthcare, after its successful first foreign venture with Clinique Darné in Mauritius in 2009, has extended its reach in India, Australia, New Zealand, Singapore, Hong Kong, Vietnam, Canada, Dubai, and Sri Lanka.

A gateway to Africa

“In April 2012, we ventured in a hospital in Kampala, Uganda, making it our first on the African mainland”, pointed out the Chief Operating Officer (COO) of Fortis Clinique Darné, Dr Simmardeep Singh Gill. The venture into Uganda has been undertaken in partnership with the Mauritian CIEL Group. On the strategic reasons that motivated Fortis Healthcare to enter our island, Dr. Simmardeep Singh Gill explained that “for centuries Mauritius has been known as the key of the Indian Ocean, but we perceive Mauritius as the gateway to Africa. Moreover, the advantageous Double Tax Avoidance Agreement (DTAA), incentivising Indian investment though Mauritius also contributed to Fortis Healthcare coming to Mauritius. The fact that the government has VAT exemption on medical equipment made a lot of sense to us being in the healthcare business to come over here.”

“Back in 2008, Fortis Healthcare being the fastest growing healthcare company in India, it initiated its global aspirations. And the fact that we chose Mauritius to be our first international foray says so much about its business friendliness. It offers a business-friendly platform; a foreign investor can settle hassle-free in Mauritius and be operational in just 3 days.”

Another contributory factor has been the progressive removal of trade barriers over the years. “We should be proud that these measures have incentivised BPO and Healthcare players to come set up on the island”, added the COO of Fortis Clinique Darné.

Dr Simmardeep Singh Gill, CEO of Fortis Clinique Darné

Their technical expertise and dedication helped Indian companies enter the global arena. Indian Companies are welcome in every part of the world and are counted amongst the best in the business. Indian companies are fundamentally strong, which helps them in sustaining through the difficult times of global economic crisis.

Talking about the services they offer to Indian expatriates, MTML’s CTO, Rajesh Rai pointed out: “MTML offers all kinds of services and packages to suit all segments. One of them relates to a special international long distance calls package wherein anybody can call to India at only Rs 1.50/min with a monthly fee of Rs 250/. This is very popular among Indian expatriates and even this is much sought after by Mauritians.”

Close diplomatic ties with India

Ranjan Kumar Mohapatra, the Managing Director of IndianOil (Mauritius), is highly praiseworthy about “the legal and economic environments in Mauritius. These are conducive for business development and promote inclusive growth. The country also provides a level playing field to all players.”

Going back over the coming to Mauritius of his company, he told Business Magazine that “Indian Oil Corporation, the parent company, was also looking towards expanding its horizons. The economic, political and security conditions prevailing in Mauritius are excellent for investment. Thanks to the close diplomatic ties between Mauritius and India, support of the Government of Mauritius and many other major stakeholders in Mauritius coupled with untiring efforts of the-then officials of Indian Oil that this young entrant, conceptualised in 2000, came into reality with starting of physical operation in 2004.”

Dr Simmardeep Singh Gill of Fortis Clinique Darné put forward that “everyone feels at ease in Mauritius thanks to the investment protection, support structures, cultural diversity…” If initially Indian companies established wholly-owned offices or subsidiaries in Mauritius, in the recent years, a growing number are using the joint venture mode with local firms. India’s Religare Global Asset Management Inc. last year acquired 40% of IPRO, a company providing financial solutions to its clients by focusing on three markets: India, Mauritius and Africa.

“Our presence in Africa through our office in Botswana offers Indian investors the opportunity to invest in Africa. Mauritius’ double tax avoidance treaty network offers substantial and unique advantages to Indian investors going into Africa”, told Cédric Lacaze, Head of Fund Management at IPRO.

Mauritius being the only financial services centre being a member of all the major African regional organizations, such as the African Union, SADC, COMESA and Indian Ocean Commission (IOC), Indian expatriates living in Mauritius may use these axes to invest in Africa.

MTML is thus exploring various possibilities of business in the African region in the field of telecommunication.

S. Vaideswaran of New India Assurance found it regrettable that “in the press, both in India and Mauritius, there is a lot of misgivings / misinformation regarding double taxation agreements, DTAA.”

Labour cost, a barrier for Indian companies

“Once these misgivings / misinformation are cleared, I am sure more and more companies could set shop in both the countries. India and Mauritius have traditionally shared a strong social, political, cultural and economic relationship and this can be used as a foundation for a ‘win-win’ situation for both the countries.”

However, according to Dr. Simmardeep Singh Gill of Fortis Clinique Darné, the differential in labour costs remains an obstacle. “We cannot forget that labour cost is much dearer in Mauritius in comparison to India, translating into a costly barrier to entry for many Indian companies.”

A point of view shared by Cédric Lacaze of IPRO who also stressed the fact that “compared to India, Mauritius by far is a small market with limited opportunities. There is also a growing concern that Mauritius lacks necessary skilled workforce to cope with growing demand in specific sectors. There is a disconnection between the education system and employability.”

India Oil Corporation sets up its operations in Mauritius after considering the economic, political and security conditions prevailing here.