Singapore displaces Mauritius as top FDI source

Singapore has displaced Mauritius as the top source of foreign direct investment (FDI) in India during the first half of this fiscal.

Figures compiled by the Department of Industrial Policy and Promotion show that during April-September, India attracted $6.69 billion (Rs 43,096 crore) FDI from Singapore and $3.66 billion (Rs 23,490 crore) from Mauritius. FDI from Singapore has more than doubled from $2.41 billion in the year-ago period.

According to experts, the Double Taxation Avoidance Agreement (DTAA) with Singapore has provided comfort to foreign investors based there to invest in India as the limitation-ofbenefit clause is not applicable to companies which have paid their tax in Singapore. On the other hand, the Narendra Modi government has stepped up pressure on Mauritius to stop accommodating companies with merely post-office addresses in the island nation which were being used for round-tripping of black money.

FDI from Singapore during the first six months of the current financial year is also more than what it had invested in India for the whole of 2013-14 ($5.98 billion). India had attracted $6.74 billion foreign investment during 2014-15. Sectors that attracted highest foreign investment during April-September 2015 include computer software and hardware ($3.05 billion), trading ($2.30 billion), services and automobile ($1.46 billion each) and telecommunications ($659 million).

Foreign investment is crucial for India, which needs about $1 trillion by March 2017 to overhaul infrastructure such as ports, airports and highways and boost growth. Mauritius on Friday assured India that it would not allow shell companies to operate from its soil.