India's Geosynchronous Satellite Launch Vehicle (GSLV-F09) carrying GSAT-9 communications satellite blasts off from the Satish Dhawan Space Centre in May, 2017

India may not like to rule out the proposal completely, as it is wary of China offering a similar know-how to Mauritius

New Delhi: Mauritius has sought India’s help on satellite technology in a bid to emerge as a civilian satellite launch centre, it is learnt. The island nation’s proposal has caught New Delhi by surprise.

Countries hardly ever share proprietary technologies like space and India is no exception.

The proposal is unusual for India, which is negotiating two unconnected but high stake cooperation agreements with Port Louis. One is a plan to set up an offshore oil reserve for India in Mauritius. The other is a free-trade agreement. In that backdrop, India may not like to rule out the satellite technology sharing proposal completely, as it is wary of China offering a similar know-how to Mauritius.

E-mails sent to the Mauritius High Commission in connection with the development remained unanswered. There was no response to phone calls either.

The Indian Space Research Organisation (ISRO) currently has a framework agreement with Mauritius, as it has with almost 40 other countries and space agencies. But those are meant to only share the knowledge from space research.

“Specifically, developing countries look to India for assistance in building up their capabilities to derive benefits of space technology. The scope of international cooperation has become wider and diverse, as ISRO has made tremendous progress in recent times,” ISRO notes as part of its international cooperation mandate.

But sharing technology for space launch vehicles is quite different, sources said. Mauritius has long seen itself as a force multiplier for the African continent, lying about 2,000 km from the nearest beachhead. A space launch capability can signal a renewed interest among the African countries to do business with the nation that had long established itself as a tax haven.

That position that has now come under pressure.

The IMF’s latest Article IV consultation with Mauritius has concluded the country is going to face increasing fiscal pressure.

“The vibrant Global Business Sector faces pressure from international anti-tax avoidance initiatives. Fiscal space is limited, fiscal risks are increasing, and there are signs of building inflationary pressures,” the report concludes.

The last of these tax treaties Mauritius had was with India since 1982. Under it, a Mauritius resident got a capital gains tax exemption on transfer of Indian securities. At one stage, almost 40% of the foreign investment into the Indian stock market was through investment vehicles with a Mauritius address. However, both New Delhi and Port Louis have decided to end the tax arbitrage at the end of this financial year. From April 1, 2019, India would charge capital gains tax on full domestic rates.

“To achieve advanced economy status, the government intends to pursue an ambitious growth strategy anchored on significant public investments in infrastructure”, the same IMF report said. Investment in space technology is part of the strategy as it is meant to provide an overwhelming infrastructure support, sources pointed out.

The facilities developed by ISRO, which recently sent up 104 satellites in one launch, could be shared with other countries, but not for building a rival launching pad, the sources pointed out.

The struggle for bases in the region has intensified. Earlier this year, India signed up with Oman for access to its port of Duqm. This port, strategically close to Gwadar and Chabahar along with the Assumption Island being developed in Seychelles and Agalega in Mauritius, provide India a ring of bases to maintain a strong presence in the Indian Ocean. Not accepting Mauritius’ proposal on space technology could put some of these gains under cloud.