By: Rajnish Tiwari

According to a recent report appearing the Hindu Busines Line (6th Sept. 2011) Mauritius has emerged as the top desitination for Indian foregin direct investments. The official data suggest that Indian FDI outflows to Germany have gone down by as much two-thirds…

„Mauritius has again emerged as the hot destination for Indian corporates investing abroad. The US and Singapore seem to be loosing their attraction.

„The Finance Minister Mr Pranab Mukherjee, in a written reply in the Rajya Sabha on Tuesday, said that Mauritius, the US and Singapore have regained the top three places in attracting Indian capital but with one difference. Mauritius has registered very healthy growth, but investment in the US and Singapore has come down in comparison to the previous year. United Arab Emirates (UAE) has also registered positive growth, but investment in the Netherlands has come down to half while to Germany it is down to nearly one third.“ […]

(Read the complete report on the Hindu Business Line)

It must, however, be noted that a significant portion of outward FDI projects of Indian firms takes place by roping in subsidiaries already located aborad so that those investments are not necessarily captured by official data. Moreover, it is not improbable that a significant portion of the FDI to Mauritius is actually routed further to other countires in order to take advantage of favourable taxtaion treaties. Nevertheless, we cannot deny that Indian investments to Germany have, in recent past, neither kept pace with the overall development of Indian outward FDI nor with the growth level of the Indo-German bilateral trade relations. Nonetheless, the investment activity has remained encouraging, the offical figures not withstanding.

On the issue of recent developments and challenges in Indian outward FDI to Germany also see:

Tiwari, R. (2011): Investment Destination Germany: Chances & Challenges for Indian Firms, in: Business Guide Germany India 2011/2012, pp. 96-97, Berlin: Wegweiser.