Governance & Social Justice
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Science & Technology
- GS 2 || International Relations || India &its Neighbors || Indian Ocean Geopolitics
Why in news?
In the Seychelles, India was recently selected as the Tax Expert and Partner Administration for Tax Inspectors without Borders (TIWB).
About Tax Inspectors without Borders:
- It was introduced in 2015 by the UNDP and the OECD.
- Its goal is to assist developing countries in strengthening their national tax administrations by increasing audit capability and sharing this information with other countries.
- It aims to boost developing nations’ tax administrations by passing on technical know-how and skills to their tax auditors, as well as exchanging general audit practices and disseminating knowledge products.
- It makes specialist audit help available in areas such as transfer pricing, thin capitalisation, advance pricing agreements, anti-avoidance rules, consumption taxes, high-net-worth persons, pre-audit risk assessment and case selection, and audit investigatory procedures.
- It excludes assistance with customs matters, as well as policy advice, legislative amendments, (re)negotiations, international tax treaties, and litigation..
- Selected specialists will work directly with local tax officials on current audits and audit-related concerns involving foreign tax matters, as well as general audit techniques applicable to individual situations.
Understanding India- Seychelles Relation:
- Since 1976, when the Seychelles acquired independence, India and the Seychelles have had diplomatic relations. India has had a resident high commissioner in Seychelles since 1987, and Seychelles established a permanent mission in India in 2008.
- The two countries’ relations have been friendly and amicable, with regular high-level exchange trips between them. These ties have spanned a variety of fields, including defense, culture, trade, and technical collaboration.
Significance of Seychelles for India:
- Project on Access to Africa and the Pan-African e-Network:Seychelles connects India to East African countries with which it has historically had socioeconomic links and is now a significant market for Indian businesses.
- Seychelles is a part of the Pan African e-Network project between India and the African Union, which aims to connect the African Union’s 53 member nations to India and each other via a satellite and fiber optic network.
- The project aims to facilitate access to and knowledge transfer between India and African countries, particularly in the medical and educational fields.
- Indian Diaspora: The Indian Diaspora, primarily of Tamil and Guajarati heritage, accounts for 8% of the population of the Seychelles.
- India and the Seychelles have a long history of similar sociocultural links.
- Furthermore, the Indian diaspora has a strong presence in Seychelles and has helped to strengthen diplomatic connections between the two countries.
- Indo-French Maritime Cooperation:
- In the Seychelles, France has a long history and a powerful diaspora. In addition, France and the Seychelles have strengthened their security collaboration. France has contributed assistance in the development of capabilities and the management of marine security concerns.
- In the Indian Ocean Region, India and France share mutual interests, and Seychelles can serve as a vital hub for India-France maritime cooperation.
- Trade and Energy Security:
- Seychelles is strategically placed near the oil sea lanes and oil producing nations, ensuring trade and energy security. For India’s foreign trade and energy security, these sea lanes are critical.
- Economic Relations:
- In 2010-11, trade between India and the Seychelles was barely US$40 million, with India’s trade balance significantly in its favor.
- Tourism, fishing, petroleum exploration, communications and information technology, computer education, and pharmaceuticals have all been mentioned as sectors where the two countries may cooperate economically.
- In 2010, and again in 2012, both countries inked a bilateral agreement to promote investment. It was given a $50 million line of credit and a $25 million grant by India.
- Trade and Commerce: India is a significant trading partner for Seychelles, with total trade valued at around $34.6 million USD.
- TATA and Ashok Leyland operate local bus service in the capital, and Indian enterprises have been involved on the island nation since 1978.
- Seychelles’ mobile network is operated by Airtel, an Indian mobile network. Seychelles financial services are produced by Polaris Software Lab, an Indian software business.
- Between 2015 and 2016, Indian exports to Seychelles accounted for about 0.02 percent of overall Indian exports (USD 32.56 million). The total value of imports was USD 1.17 million.
- Strategic footing in the Indian Ocean Region:
- India’s listening post in Madagascar, as well as Assumption Island in the Seychelles and Agalega in Mauritius, are strategically vital in the Indian Ocean Region.
- With the establishment of a naval facility in the region, India will be able to efficiently monitor the activities of foreign navies in the Indian Ocean.
- Furthermore, the expanding Chinese presence in the Indian Ocean Region emphasizes the importance of having a strong presence in the region, which Seychelles provides. A naval outpost on the Seychelles’ Assumption Island will aid India in containing China’s growing footprint in the region.
Problems and Roadblocks in India:
- Seychelles’ internal problems:
- Due to a series of failures, the Assumption Island Project has been halted.
- The largest setback came when a copy of the Detailed Project Report (DPR) was posted on YouTube, raising questions about the deal’s origins.
- To allay fears that the island would be sold to India and become embroiled in the Indo-China dispute, the arrangement was revised. The amended agreement included clarifications on the facility’s non-use for military objectives.
- However, protests against the agreement continued, and it was met with a lot of political opposition. As a result, the Seychelles Parliament did not ratify the agreement.
- Diplomacy with a Chequebook:
- India, unlike China, does not have the economic clout to deploy its resources as the latter has done with its Belt Road Initiative and other operations in Africa and South Asia.
- The China Factor:
- The Indian Ocean Region has recently grown more contentious. Bangladesh, the Maldives, Myanmar, Sri Lanka, and Pakistan have all signed diplomatic, military, and commercial agreements with China.
- India is concerned about China’s encirclement plan, known as the “string of pearls” effort.
- China’s developing connections with Seychelles have raised concerns in India, which is attempting to contain China’s rising clout in the Indian Ocean region.
- The Indian government’s aid to the Seychelles in the areas of defense, human capacity building, tourism, and infrastructure is part of the SAGAR (Security and Growth for All in the Region) initiative, which aims to ensure a free, open, and inclusive Indian Ocean region.
- Project Mausam, which aims to revive India’s traditional maritime connections and cultural links with nations in the Indian Ocean Region, includes the Seychelles. This strengthens India’s position as a formidable counterweight to China’s expanding influence in the region.
- To maintain its presence in the Indian Ocean Regime, India has engaged diplomatically, economically, and strategically with Seychelles and other island nations through a variety of programs.
Mains oriented question:
What is Tax Inspectors without Borders? What is its importance? (200 words)