Based on a census that it undertook, a report by India’s central bank, the Reserve Bank of India, said, “Mauritius was the largest source of foreign direct investment (FDI) in India (21.8 percent share at market value) followed by the U.S.A., the U.K., Singapore and Japan, while Singapore (19.7 percent) was the major overseas direct investment destination (ODI), followed by the Netherlands, and the U.S.A.” The census yields comprehensive information on the market value of foreign liabilities and assets of Indian companies arising from FDI, ODI and other investments. Historically foreign investors who expect capital gains from the ultimate sale of their stake prefer to invest via this tiny island nation due to a favored tax deal between India and Mauritius.
Other key findings of the census were:
- Of the 18,667 companies that participated in the census, 17,020 had FDI/ ODI in their balance sheets in March 2017
- “96 percent of the responding companies were unlisted in March 2017 and most of them had received only inward FDI; unlisted companies had a higher share of FDI equity capital compared to listed companies”
- Over 80 percent of the 15,169 companies that reported inward FDI were subsidiaries of foreign companies (single foreign investor holding over 50 percent of the total equity)
- Non-financial FDI companies had a much higher share in total foreign equity participation compared to financial FDI firms.
- “The ratio of market values of inward to outward direct investment, increased to 4.3 in March 2017 from 3.6 a year ago; equity participation accounted for 94 percent and 79 percent shares in inward and outward FDI, respectively,”
- The manufacturing sector accounted for nearly half of the total FDI at market prices; information and communication services and financial and insurance activities were the other major sectors that attracted FDI.
- Total sales, including exports, of foreign subsidiaries in India increased by 18.7 percent during 2016-17 whereas their purchases, including imports, increased by 20.1 percent.
