India signs revised tax treaty with Mauritius 

Ending The DTAA has its backdrop to November 2015 G20 summit when every country agreed for early adoption of 14 point recommendations of the Summit and India coming as one of the early decision makers is a good sign. And it’s not surprising when we are most favorable in EMs with fall in global commodity pricing and when we are surpassing China in growth rate. It confirms our long term vision towards effective financial policy in international investors community. The impact of-course is there on Fund/ Asset Managers, Institutional Funds and companies as 34% of total FDI comes from Mauritius.

when we calculate the impact we have two perspectives Short term and long term In short term, It may affect the rupee and market may take a hit moderately due to negative sentiments but that’s the general reaction. Also not just Mauritius we will be losing money flowing in from Singapore and we will have to see developments on that front as well. But given all this, These repercussions will be absorbed when we look at the bigger picture or long term analysis as It clearly means we will have a large bunch of inflows through these "institutions" in FY17 which is a big boost coupled with higher TAX income for the Government. Not That, after recent Panama papers incident we actually will filter the "shell" companies and if it’s all genuine than we are having rebate as an option for them. Not just companies, NRI's/ Individuals also access the same routes to invest in India and we can grab a untapped source of Income for the government.

Equity markets will have it course and we are still in a primary bullish trend and we may have a moderate hit in short term but in FY17 we may witness a large inflow of funds, that's for sure.

By Mustafa Nadeem, CEO, Epic Research Pvt. Ltd.