A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major and mature economies like UK and France. Why ?

1. The question asks why a significant amount of Foreign Direct Investment (FDI) into India originates from Mauritius, often exceeding flows from larger economies like the UK and France. 2. Option (A) is incorrect; while India may have strategic partnerships, FDI policy is generally based on broader economic considerations rather than specific country preferences for routing investments. 3. Option (B): India has a Double Taxation Avoidance Agreement (DTAA) with Mauritius. For many years, this treaty provided significant tax advantages, particularly regarding capital gains tax, for investments routed through Mauritius into India. Companies (including those from the UK, France, US, etc.) could set up subsidiary entities in Mauritius to invest in India and benefit from the treaty's provisions, making Mauritius a popular conduit for FDI. This is the primary reason for the high FDI figures from Mauritius. 4. Option (C): While there are historical and cultural ties (ethnic identity), these are not the main drivers for the large volume of routed financial investments compared to the tax advantages. 5. Option (D): Global climatic change concerns are unlikely to be the reason for routing investments through Mauritius into India. 6. The DTAA (Option B) provided the most significant incentive for routing FDI through Mauritius for a long period (though the treaty has been amended in recent years to curb treaty shopping).