Mauritius Financial Services Minister Jyoti Jeetun highlighted India's economic resilience and the importance of the amended DTAA in ensuring genuine investment flows. Mauritius has contributed $186 billion in FDI to India since 2000.

  • Mauritius accounted for $186 billion of FDI into India between April 2000 and March 2026.
  • The amended Double Taxation Avoidance Agreement (DTAA) aims to curb tax evasion via shell companies.
  • India aims to become a $5 trillion economy by fiscal year 2028-2029.
  • The Principal Purpose Test (PPT) will now be strictly applied to ensure investment substance.

In a significant statement regarding bilateral economic relations, Jyoti Jeetun, the Minister of Financial Services and Economic Planning of Mauritius, affirmed that India continues to be a premier destination for global capital. She noted that India's robust economic fundamentals, vast market size, and rapid digital transformation are key drivers of investor confidence.

Historically, Mauritius has played a pivotal role in fueling India's growth. From April 2000 to March 2026, Mauritius facilitated approximately $186 billion in Foreign Direct Investment (FDI) into India, representing nearly a quarter of the total FDI inflow during that period. In the 2025-26 fiscal year alone, Mauritius contributed $6.6 billion, ranking as the second-largest source of FDI after Singapore.

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Why This Matters

BozokMedia analysis shows that the evolving regulatory landscape between India and Mauritius is crucial for maintaining the quality of capital. As India pursues its ambitious goal of becoming a $5 trillion economy by 2028-2029, the nature of investment must shift from mere tax routing to genuine economic contribution.

India's primary economic ambition and ongoing reforms continue to underpin strong global investor confidence.

A major focus of the recent diplomatic and economic engagements has been the amendment to the Double Taxation Avoidance Agreement (DTAA). For years, concerns existed regarding 'shell companies' using Mauritius to route investments solely for tax benefits. To plug these loopholes, the 2024 amendment introduced the Principal Purpose Test (PPT).

The PPT empowers Indian tax authorities to deny tax benefits if the primary purpose of an investment structure is to evade taxes. Following concerns from the industry, the Mauritian Cabinet ratified this protocol in July 2026, providing much-needed clarity and certainty for legitimate investors.

Historical Background

The India-Mauritius tax relationship dates back to 1982. A landmark shift occurred in 2016 when a protocol allowed India to impose capital gains tax on certain shares. This was followed by the 2024 amendments designed to align with global standards of transparency, ensuring that the partnership remains constructive and economically substantive.

Did You Know?: Mauritius has been a cornerstone of India's FDI landscape for over four decades, acting as a strategic bridge for global capital.

Frequently Asked Questions

1. What is the Principal Purpose Test (PPT)?
It is a rule that allows tax authorities to deny treaty benefits if the main reason for a transaction or structure is to obtain a tax advantage.

2. What is India's economic goal?
India is working towards reaching a $5 trillion economy by the 2028-2029 fiscal year.