India and Mauritius have signed a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) that provides an institutional mechanism to encourage and improve trade between the two countries.
India decided to change its trading relationship with Mauritius after it found that the earlier double taxation avoidance (DTA) treaty with the island nation was being misused for routing illegal money into India.
In fact, tax advantage that India gave made Mauritius the supplier of largest foreign direct investment into the country. Even since then, various loopholes in the earlier trading system have been plugged.
The new CECPA was signed by Indian Commerce secretary Anup Wadhawan and Ambassador Haymandoyal Dillum, Secretary of Foreign…