Foreign investment in India

Notes

• Mauritius remains a significant source of Foreign Direct Investment (FDI) for India, contributing $6.6 billion (11.2% of total FDI) in 2025-26.
• Cumulative FDI from Mauritius between April 2000 and March 2026 reached $186 billion, representing nearly 25% of total inward FDI.
• The India-Mauritius Double Taxation Avoidance Agreement (DTAA), signed in 1982, has been the primary framework for bilateral investment flows.
• The 2016 Protocol introduced source-based taxation of capital gains on shares, shifting Mauritius from the top source of FDI to the second or third largest.
• The 2024 amendment introduced the Principal Purpose Test (PPT), allowing India to deny tax benefits if the primary objective of an investment structure is tax avoidance.
• The PPT amendment aims to prevent the use of shell companies for treaty shopping while ensuring genuine investment flows.
• India's economic fundamentals, including market size, ongoing reforms, and digital transformation, are cited as key drivers for sustained investor confidence.
• India aims to achieve a $5 trillion economy by the 2028-2029 fiscal year, necessitating significant capital inflows.

Part of a longer story

This is day 11 of 15 in U.S. policy on imports linked to forced labour, which has been running since 15 July 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

• U.S. report on trade transshipment Before
• FDI relaxations and investment After
• The whole story 15 entries