RBI Data Reveals Nearly 60% of India's Outward FDI Flows into Low-Tax Jurisdictions
An analysis of Reserve Bank of India (RBI) data for 2024-25 shows that approximately 56% of India's outward Foreign Direct Investment (FDI) is directed toward low-tax jurisdictions, commonly known as tax havens. Countries like Singapore, Mauritius, and the UAE alone account for over 40% of the total outward FDI. Experts suggest that while these destinations offer tax advantages, Indian firms also use them as strategic platforms for global expansion and to attract international investors. The trend has intensified in the current fiscal year, with low-tax jurisdictions accounting for 63% of total outward FDI in the first quarter.
Key Points
- Singapore, Mauritius, and the UAE are the top destinations for Indian outward FDI.
- Out of ₹3,488.5 crore in outward FDI, about ₹1,946 crore went to low-tax jurisdictions.
- Firms use these jurisdictions for tax efficiency and as hubs for investing in third countries.
- High tariffs in markets like the U.S. may further drive Indian companies to set up subsidiaries abroad.
Exam Facts
- 56% of outward FDI in 2024-25
- Singapore (22.6%), Mauritius (10.9%), UAE (9.1%)
- Total outward FDI ₹3,488.5 crore
- RBI Data for July 2025
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