Forget Mauritius, for now

To be fair to minister of state for finance SS Palanimanickam, his statement in Parliament that India was considering a review of the Double Taxation Avoidance Agreement with Mauritius was a mere reiteration of a well-known official position. But given the uncertain times we live in, this spooked the markets enough for them to fall 200 points. If the Mauritius agreement costs India $600mn in taxes each year, to quote the figure most often cited, it is difficult to argue the treaty shouldn’t be revoked, more so since there is little evidence tax breaks are the fundamental drivers of investment. 

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