20 May 2016

Mrinal Roy: Is the private sector’s business model rent driven?

Is the country suffering from the crippling mindset of dependence on profitable rent provided by preferential market access and guaranteed export quotas of yore or the exceptional conditions granted under the 1983 DTAA?

Some operators highly dependent on the rent provided by the Double Taxation Avoidance Agreement (DTAA) as well as the opposition hell-bent on faulting government on everything are up in arms against the revision of DTAA. Painting a picture of gloom and doom, the opposition, the partisan press and those who have been pontificating on DTAA for years wearing different hats are pillorying government and implicitly India’s alleged intransigence, pursuant to the review of DTAA.


It must be said that the generous and unique provisions of DTAA granted by India and signed in 1983 have well benefitted Mauritius and operators in the global business industry for 33 years to date. They have allowed Mauritius to develop its financial services industry into a pillar of the economy contributing some 5% to the GDP, a share of which is India related. In essence, DTAA has served both countries well...

We should recall that some business savvy and forward-looking operators invested in integrated production units, state of the art equipment and highly automated textile mills in anticipation of the end of the Multi-Fibre Agreement (MFA) on 1 January 2005. Taking advantage of their valuable acquired expertise and experience in their core apparel, knitwear or garments business, they reviewed their marketing strategy, inducted skilled foreign labour and delocalised part of their production to maintain their competitiveness in more difficult market conditions and grow their business. Without the safety net of the MFA, those operators who did not do so could no longer compete with much cheaper exports from China, India, Bangladesh or Vietnam and went under...

Mauritius Times

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