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UPSC 2010: A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major and mature economies like UK and France. Why?
(a)India has preference for certain countries as regards receiving FDI
(b)India has double taxation avoidance agreement with Mauritius
(c)Most citizens of Mauritius have ethnic identity with India and so they feel secure to invest in India
(d)Impending dangers of global climatic change prompt Mauritius to make huge investments in India
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Not attemptedCorrect Answer: (b) India has double taxation avoidance agreement with Mauritius
Investors route funds via Mauritius because the India–Mauritius Double Taxation Avoidance Agreement (DTAA) exempts capital-gains tax in India for Mauritian-resident companies; this fiscal advantage makes Mauritius the largest conduit of FDI. There is no official country-preference, ethnic link or climate motive involved. ([gktoday.in](https://www.gktoday.in/analysis-of-upsc-civil-services-2010-gs-paper-part-ii/))
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Frequently Asked Questions
What is the correct answer to this UPSC 2010 Indian Economy question?▼
The correct answer is option (b): India has double taxation avoidance agreement with Mauritius. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this External Sector & Balance Of Payments question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2010, GS Paper 1, as Question 30. It falls under Indian Economy > External Sector & Balance Of Payments.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from External Sector & Balance Of Payments?▼
UPSC has asked 49 questions from External Sector & Balance Of Payments (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.