Mauritius tops the list of FDI sources for India
Mauritius has become the largest contributor to foreign direct investment (FDI) in India, bringing in $9.03 billion during the last financial year. The country’s share was around 29% of the total FDI inflow of $30.09 billion received between April 2014 to March 2015, said the latest data released by the Department of Industrial Policy and Promotion (DIPP). Singapore, which was the largest source of FDI to India during 2013-14, came second this time. However, the total FDI worth $6.74 billion from Singapore during last fiscal was the highest ever from that country since 2006-07, the data said. Analysts attribute the increasing foreign investments in India from Mauritius to tax treaty between the two countries. The Double Taxation Avoidance Agreement (DTAA) between India and Singapore has also come under the scanner amid allegations that many investors misuse the agreement and deliberately route their funding to India through Mauritius to evade taxes. The two countries are also working on to prevent the misuse of DTAA. During Prime Minister Narendra Modi’s visit to Mauritius in March this year, both the sides had agreed to continue their discussion on the matter. The World Trade Organisation (WTO) in its recent review of Indian trade policies said that Mauritius has been the largest source of FDI in to India, followed by Singapore, between 2010-11 and 2013-14. “It would appear that part of these large flows may result from the advantages of the tax treaty between Mauritius and India, which may make it attractive for investors to route their investment through Mauritius to take advantage of the preferential provisions, which include exemption from capital gains tax,” the WTO said in its review document. India witnessed an increase of 27% in its overall FDI inflow from $24.2 billion in 2013-14 to $30.09 billion last year, the government data shows. Apart from Mauritius and Singapore, other top five FDI sources during the last fiscal included the UK, Japan and Netherlands.
June 08, 2015 | 7:43 pm IST.