Tax havens account for highest increase in FDI inflows

Foreign direct investment (FDI) inflows from tax havens such as Cayman Islands, the Bahamas and Liechtenstein have jumped leaps and bounds in the last one year, official data showed.

While FDI from Cayman Islands sharply rose 1,640% on year in 2017-18, in absolute terms the FDI inflow was $1.2 billion from $71 million in 2016-17, as per a Lok Sabha question answered by the commerce and industry ministry on Monday.

Bahamas showed a 475% rise in foreign inflows but the increase was from $0.24 million to $1.38 million in FY18. For Liechtenstein, the 392% increase was from $2.04 million in FY17 to $10.04 million last fiscal.


Overall, there was a 3.17% rise in FDI inflows into India at $44.8 billion in FY18 from $43.4 billion in FY17.

The FDI increase from Mauritius was 1.3% to $15.9 billion from $15.7 billion in FY17.

“Though Luxembourg, Switzerland and Ireland are not strictly tax havens, their favourable tax environment has given them this reputation,” said an expert on investment issues.

Luxembourg showed a 54.69% rise in FDI but that from Switzerland was flat at $514 million.