In a three-year period, the small island nation of Mauritius was the highest foreign direct investor in the Indian textile and apparel sector, accounting for a little less than 50 percent of the FDI inflows into the Indian textile sector.
In the period between fiscal years 2011-12 and 2013-14, the Indian textile industry received FDI from Mauritius totalling to $215.12 million or a little less than 50 percent of the total FDI inflows into the sector.
In the three-year period, the Indian textile and apparel industry attracted overall foreign direct investment amounting to US $466.94.
According to information available on the PIB website, in fiscal year 2011-12, the Indian textile sector got an investment of $164.19 million. In 2012-13, FDI flow fell to $103.89 million, however surged to $198.86 million in 2013-14.
According to a tax treaty between India and Mauritius, capital gains can only be taxed in Mauritius and with only 3 percent in capital gains tax; hence, Mauritius is the most attractive conduit for investments into India.
Next on the list is Singapore, which poured in FDI amounting to $62.37 million in the period under review. It was recently reported that Singapore has displaced Mauritius as the number-1 FDI investor across all sectors in India.
Incidentally, Singapore too has signed a ‘Double Taxation Avoidance Agreement’ with India.
Switzerland follows with $25.62 million, followed by Luxemburg with $25.25 million, Caymen Islands another tax haven with $24.14 million, Austria with $22.06 million, Japan with 21.57 million, USA with $18.12 million and UAE $13.97 million.
In the three-year period, 35 in all countries invested in the growth story of the Indian textile and apparel sector, which is the second biggest globally after China.