Nearly 60% of India’s outward FDI goes to ‘tax havens’, reflecting strategic potential of these countries
According to tax and investors, Indian companies are increasingly benefiting from low -productive judicial zones abroad to channel foreign investments to increase their global assets.
An analysis Hindu The data obtained from the Indian Reserve Bank, which closely follows foreign investments by Indian companies, shows that approximately 56% of such investments in 2023-24 are commonly called Singapore, Mauritius, United Kings, United King, United Kingdom and Switzzerland.
In other words, in 2023-24, a total of 3,488.5 Crore outward foreign direct investment (DYY) by India, approximately 1,946 Crore went to this low tax jurisdiction.
In fact, only three of these countries-Singapore (22.6%), Mauritius (10.9%) and the UAE (9.1%) -2023-24 made up more than 40%of India’s external FDI.
In addition, this trend seems to have increased intensity in the current financial year. In the first quarter, these low tax judicial regions constituted 63% of India’s total outside the DYM.
However, countries around the world, including India, tried to reduce the tendency of companies that shift profits to these tax paradises, while experts said that choosing these low tax judges is not only a tax problem, but a strategic necessity for Indian companies.
Grant Thornton Bharat, Riaz Thingna, said, “If Indian companies invest outside India, it makes sense to spend them from a company established in one of these judicial fields,” he said.
He said that if an Indian company wants to establish a subsidiary in Europe, the USA or another country, it will help them buy strategic investors in Singapore or through a special purpose in the field of a similar judicial.
“These judicial zones are more flexible in the daily transfer of funds and investments,” he said. That is, often, these investments are not only made to avoid taxes, avoid or reduce. They are usually done because these judicial zones form platforms for investment in third countries. “
First level
O Indian tax partner Vaibhav Luthra also announced that RBI data did not provide the final investment place, but only showed the first foreign investment level.
According to Mr. Luthra, these low tax or “tax savings” judicial powers not only provide a tax advantage, but also provide tax stability. In addition, they come with other advantages for Indian companies that want to invest abroad.
“Most of the time, for a fund collecting or for an investor, they usually like to come to the fields of judicial areas,” he said. In addition, having an asset protects the Indian parent company. “
Mr. Thingna also drew attention to the tendency of foreign companies to choose a low -efficiency judicial authority to create a joint venture instead of India.
“If the Indian company is looking for a strategic partner, a strategic partner from another country will be happier to the presence of a Singapore or a similar judicial field, because of our DYD regulations, taxation and various other elements,” he said.
RBI data also points to this trend. The latest data on foreign investments, July 2025, show that joint initiatives make almost 60% of the investments made by Indian companies in low -efficiency judicial regions.
Tariff result
Mr. Thingna believed that the US high tariffs on imports from India could encourage Indian companies to invest abroad if they continued.
“Outside India, there may be many companies that will establish subsidiaries and other organizations that will escape the more harsh tariffs in India,” he said. “This has not yet happened because the tariffs are new, but it could be.”
Published – 14 September 2025 06:58
