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Satabdee Banerjee1
and Verena Tandrayen-Ragoobur2
1 Department of Commerce, Netaji Nagar Day College, Kolkata, West Bengal, India
2 Department of Economics & Statistics, University of Mauritius, Reduit, Mauritius
Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-Commercial use, reproduction and distribution of the work without further permission provided the original work is attributed.
India and Mauritius have important historical and cultural ties, and trade, investment and strategic exchanges between them. India is the sixth-largest investor in Mauritius, while Mauritius is the third-largest investor in India. However, because of the Double Taxation Avoidance Agreement (DTAA) with India and the concurrent lack of a capital gains tax in Mauritius, a sizeable amount of the capital flows from India to Mauritius were essentially round-tripping or fiscal evasion of taxes on Indian money. The majority of Indian businesses that do business in Mauritius do not have any manufacturing or trading facilities. In light of this, the current work makes an effort to conduct a qualitative case study utilising primary and secondary data to follow the development of the strategic investment ties between India and Mauritius through money migration, after the DTAA was amended in 2016. After 2018, China has surpassed India in terms of volume of capital investment into Mauritius, with Singapore emerging as the largest provider of foreign direct investment (FDI) inflows into India. The study observes that this shift in trend is not the result of only the treaty being amended but also the tax morale of the respective countries as well as the invasive economic policy of China. Whatever legal changes are made, if human avarice is not restrained, dishonest people will always find clever ways to circumvent the law to further their agendas.
Double Taxation Avoidance Agreement (DTAA), fiscal evasion of taxes, foreign direct investment (FDI), India–Mauritius investment ties, qualitative case study
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