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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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(b) India has comprehensive Double Taxation Avoidance Agreements (DTAA) with 23 countries. This means that there are agreed rates of tax and jurisdiction on specified types of income arising in a country to a tax resident of another country. Under the Income Tax Act 1961 of India, there are two specific provisions, Section 90 and Section 91, which provide specific relief to taxpayers to save them from DTAA. Section 90 is for taxpayers who have paid the tax in a country with which India has signed DTAA, while Section 91 provides relief to taxpayers who have paid tax to a country with which India has not signed a DTAA. Thus, India gives relief to both kind of taxpayers Mauritius by itself is a low tax counting.

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