A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major and mature economies like the UK and France. Why?
✓ Correct answer: b) India has double taxation avoidance agreement with Mauritius
ExplanationIndia receives significant FDI from Mauritius primari- ly due to the Double Taxation Avoidance Agreement (DTAA) between the two countries.DTAA is a tax treaty that prevents individuals/entities from being taxed twice on the same income.It promotes cross-border investments by offering tax relief.Historically, this agreement allowed Mauritius-based investors to route investments into India with tax benefits, leading to higher FDI flows compared to countries like the UK and France.India has DTAA with several countries, including Mauritius, Singapore, USA, UK, Germany, Japan, Canada, France, Australia, Netherlands, China, and Bangladesh.India does not have DTAA with Afghanistan, Iraq, and Pakistan.137
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