Mauritius retreats from top 3 source countries for FPI in India

New Delhi: Luxembourg and Singapore have overtaken Mauritius as the source countries for Foreign Portfolio Investments (FPIs) in India, now ranked second and third respectively. Data from PrimeInfobase shows that as of June 30, Mauritius has fallen to fourth place. Changes in tax treaties and increased scrutiny by regulators have reduced foreign money flowing through Mauritius.

Experts say changes in the Double Tax Avoidance Agreement between India and Mauritius in 2016, the implementation of the tax exemption from April 2017 and India's ratification of the treaty to curb base erosion and profit shifting have all made the Mauritius route undesirable.

Luxembourg accounts for 7.37% of India's FPI investments, with assets under custody of Rs. 3.78 trillion, while Singapore Rs. 3.77 trillion with assets under custody holding 7.34% stake. In 2022, the figure was 7.34% (Rs 3.03 trillion) for Luxembourg and 7.07% (Rs 2.92 trillion) for Singapore. Assets under Custody Rs. The US is in first place with 21.5 trillion.

Mauritius has taken a significant hit, with assets under custody in the past year falling to Rs. 4.29 trillion down to Rs. 3.01 trillion has been reached. Its share has also decreased from about 10.4% to 5.86%.

In June 2020, FPI inflows to India accounted for 11.3% and Rs. Mauritius was second with assets under custody of Rs 2.93 trillion. In recent months, several global custodian banks are said to have classified Mauritius as a 'high risk jurisdiction'.

FPI investment in India

order	the country	June quarter	order	the country	June quarter
-	-	2022	-	-	2023
1	America	16.1	1	America	21.5
2	Mauritius	4.3	2	Luxembourg	3.8
3	Luxembourg	3.0	3	Singapore	3.8
4	Singapore	2.9	4	Mauritius	3.0
5	UK	2.3	5	UK	2.9
6	other	12.6	6	other	16.4

( All figures in Rs. lakh crore)