Singapore is the second largest source of foreign direct investment (FDI) for India, but the country wants to renegotiate the bilateral agreement with New Delhi to be able to compete with Mauritius which represents nearly 40% of FDI in India .
According to Indian press reports, the visit of Lee Hsien Loong would focus in particular on investment. Singapore would therefore remove the clause on 'Limitations of Benefit' (LoB) that impose conditions as a minimum expenditure made by a company in Singapore. This, even Arvin Boolell, Minister of Foreign Affairs, had accepted the incorporation of the clause on limitation of benefits in the tax treaty between India and Mauritius.
But, regarding the positioning of Mauritius to attract Indian investment, the task will be a little harder. Singapore remains the most popular destination for foreign direct investment by Indian companies, which invested $ 500 million in May, beating the United States, the United Kingdom, Hong Kong, UAE, Philippines and Maurice.
Of the 467 Indian companies have invested abroad, only 24 chose Maurice. Approximately 138 companies have invested in manufacturing. In the service sector, nearly 100 Indian companies put their money in foreign companies. As many as 68 Indian companies have invested abroad in sectors such as wholesale and retail, hotels and restaurants.
According to data from the Reserve Bank of India, India has invested $ 23 billion in Singapore from 2000 to 2012. While the current Indian investments in Mauritius were $ 13.56 million in December last.