What’s Behind India’s $680 million Aid to Mauritius?

Of the $680 million (Rs 32 billion) made available to Mauritius by India on September 11, 2025, $215 million will be in grants and $440 million in loans that will likely have to be repaid with interest.

This $680 million “aid” would be the largest ever granted by India to an African country. Yet Mauritius has only 1.2 million inhabitants compared to other African countries! Even for Mauritius, this $680 million represents a huge windfall, equivalent to 14% of budgeted revenues for 2025-2026. It is true that these loans will be disbursed over several years.

The conditions of this aid, such as the duration and interest rate, are not known. Nor are other conditions, such as which private companies will benefit from infrastructural project contracts covered by these loans. However, it is almost certain that Indians contractors will be imposed as was the case with the Metro project.

Of the $100 million granted by India to Mauritius in February 2021 to finance defense projects, 75% was to go to Indian contractors even if the quality of the products was not always up to scratch, like the helicopters. Financing from other countries such as China also contains these kinds of conditions.

Spying on Chinese?

Regarding the surveillance equipment in our Exclusive Economic Zone and especially the hydrographic studies that will be carried out jointly, some claim that they will serve Indian interests more than Mauritian ones as it is suspected that the Indian military is interested in the movements of Chinese submarines in the Indian Ocean.

However, this and the fact that it is Indian companies that would benefit from contracts could explain why a large portion of the funds – 48% – will be in the form of grants.

It is true that some projects will directly benefit Mauritians, such as the expansion of a hospital or the purchase of Indian electric buses, but many of the other projects seem neither necessary nor urgent. Examples: the construction of a hospital and a veterinary school – Mauritius does not really have a large livestock population – but above all the construction of new roads, including the M4 motorway at a cost of $212 million, which, according to environmentalist Sébastien Sauvage, will benefit a vast private real estate project.

Financing imports of luxury products

If India will benefit the most from this aid, one wonders why Mauritius is going into such debt when the country is already burdened by a public debt of $14 billion, or 90% of GDP. “Do you know why,” an economist tells us, “Mauritius is indebted so much to foreign countries and institutions even to finance local projects?” His response: “These dollars are also and above all used to finance our excessive imports, including luxury goods.” We are reminded that $3.6 billion was sold by the Bank of Mauritius between 2014 and 2024. “Almost all of these dollars come from loans that Mauritius has taken out with ‘friendly’ countries like India.”

Thus, behind the official statements to the effect that this aid of $680 million is the result of the “centuries-old cultural link between the two nations, … a link not only of partnership, but of kinship” are hidden the commercial and security interests of India and … the (short-term) balance of Mauritius.