Foreign direct investment (FDI) equity inflows into India increased by 30% to $21.6 billion in the first half of FY2016-17. The services sector, which includes financial, banking, insurance and others, accounted for almost one-fourth of the FDI equity inflows during the period. The computer software and hardware sector received $1 billion in FDI, registering a 66% fall compared with the same period last year. In April-September 2016, Mumbai-registered companies received FDI worth $10.2 billion which is higher than what they received in the whole of FY2015-16.
Foreign investors channelled a higher share of their investments into India through Singapore compared with Mauritius in the financial year ended March 31, 2016, for the second time in the last three years. While the momentum was captured previously, latest official statistics show this continued well into the end of the year.
This is partly due to the big quantum of international investors’ money flowing into Indian e-commerce and internet sector at large.
In the last financial year, FDI equity inflows from Singapore touched $13.6 billion. The money routed through Singapore was more than what came through Mauritius and the US put together last year.
Singapore enjoys a double taxation avoidance agreement (DTAA) like Mauritius. Mauritius has for long been the favourite route for investments in India for foreign portfolio investors, but had been facing flak from Indian taxmen over the loose ends in the treaty that led to leakage in tax due in India. Last month, India and Mauritius agreed to amend the three-decade old treaty in a bid to plug some of the loopholes.
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