Mauritius has emerged as the biggest investor in India. In its latest report, the Reserve Bank of India (RBI) said that the island nation in the Indian Ocean has strengthened trade ties with India in the last few years to become the largest investor. The UN Conference on Trade and Development’s (UNCTAD) FDI Statistics Division on Investment and Enterprise, too, supported the RBI’s claim, saying that Foreign Direct Investment (FDI) stock – or the combined net value of foreign investments in an economy – would be a good measure to understand the historical trend of FDI.
According to the UNCTAD division, an analysis of India’s inbound and outbound FDI stock shows the importance of Mauritius in foreign investments linked to the South Asian country. As of 2012, companies based in the small island country had FDI stock of USD 58 billion in India – the highest for any country. As far as the FDI from India is concerned, four of the 10 most preferred destinations from India – Singapore, Mauritius, Jersey and Cyprus – are perceived as tax havens.
As per the report prepared by the UNCTAD division, the total volume of FDI stock in India was USD 21, 8130 million in 2012, while India’s FDI stock abroad was USD 79,857 million. Apart from Mauritius (USD 57, 727 million), countries that contributed to FDI stock in India were: the UK (USD 35,595 million), the US (USD 32,562 million), Singapore (USD 17,654 million), Japan (USD 15,470 million), Germany (USD 12,561 million), Switzerland (USD 11,145 million), the Netherlands (USD 10,476 million), France (USD 3,776 million) and South Korea (USD 3,074).
On the other hand, the top 10 countries, which attracted investments from India in 2012, were: Singapore (USD 21,481 million), Mauritius (USD 12,355 million), the Netherlands (USD 11,134 million), the US (USD 7,066 million), the UAE (USD 3,874 million), Jersey (USD 3,138 million), the UK (USD 2,158 million), Bahrain (USD 1,921 million), Russian Federation (USD 1,841 million) and Cyprus (USD 1,673 million).
The UNCTAD data clearly show that India attracted FDI mainly from the developed Europe (USD 84,033 million), Africa (USD 57,985 million), North America (USD 33,024 million), Asia (USD 24,975 million), and Latin America and the Caribbean islands (USD 1,452 million). Other countries invested USD 16,665 million in the South Asian nation as of 2012.
However, India invested mainly in Asia (USD 28,766 million), Europe (USD 22,103 million), Africa (USD 13,261 million), and Latin America and the Caribbean (USD 3,235 million). The volume of India’s investment in other countries was just USD 4,238 million. By investing USD 57, 727 million in India and attracting an investment of USD 12,355 million from it, Mauritius becomes a major trading partner of the South Asian nation.