IMPACT OF DOUBLE TAXATION AVOIDANCE AGREEMENTS IN INDIA’S FDI INFLOW

Foreign Direct Investment (FDI) plays a vital role in India’s economic development by promoting growth, employment, and technological advancement. Double Taxation Avoidance Agreements (DTAA) are designed to eliminate double taxation and encourage cross-border investments. This study examines the impact of DTAA on FDI inflows into India, with a focus on Mauritius and Singapore as major investment routes. The research is based on secondary data collected from DPIIT and RBI sources for the period 2010–2023. Analytical tools such as comparative analysis, mean, and CAGR are used to evaluate trends. The findings show that FDI inflows from these countries increased significantly before DTAA amendments due to tax benefits. However, after the amendments, inflows declined, indicating reduced tax-driven investment routing. Despite this, total FDI inflows into India remained stable and showed long-term growth. This suggests that DTAA amendments affected the structure rather than the volume of investment. The study concludes that DTAA plays both a promotional and regulatory role in India’s FDI environment.