SINGAPORE REPLACES MAURITIUS AS TOP FOREIGN INVESTOR IN INDIA
It has been reported that foreign direct investment (FDI) into India grew by 8% to USD 24.3 billion, last year.
Singapore has replaced Mauritius as the top source of foreign direct investment into India, with about 25% of FDI inflows in 2013-14.
During the last financial year, India attracted USD 5.98 billion in FDI from Singapore, whereas it was USD 4.85 billion from Mauritius, according to the data of the Department of Industrial Policy and Promotion (DIPP).
It is worth noting that the Double Tax Treaty with Singapore incorporates a Limitation of Benefit (“LoB”) clause which is considered to strengthen the requirement for substance at Singaporean entities to qualify for Treaty benefits.
FDI inflows from Mauritius have started drying up on fears of the impact of General Anti Avoidance Rules (GAAR) and possible re-negotiation of the tax avoidance treaty.
The Indian GAAR aiming to control tax avoidance by investors routing their funds through tax havens, is expected to come into effect from 1st of April 2016.