India has received a draft proposal from Liechtenstein for a Double Taxation Avoidance Agreement (DTAA) and is examining it, a senior external affairs ministry official said on Monday.
“This is in the domain of the finance ministry so experts will look at how it could help us advance economic engagement,” secretary (west) Sibi George said during a special briefing on the October 25-28 visit of Liechtenstein’s Prince Alois to India. His spouse Princess Sophie and a high-level official as well as a business delegation comprising top industry leaders, are accompanying him.
A DTAA is a bilateral treaty between India and another country to prevent the same income from being taxed in both nations. India has such agreements with more than 90 countries.
Liechtenstein has expressed interest in having this agreement with India as part of its efforts to further boost trade and investment, he said. Cumulative FDI inflows from Liechtenstein to India amount to $110 million. “The Liechtenstein side views a DTTA as an enabling framework to provide greater predictability and legal certainty for investment by their companies in India,” George said.
India currently has a tax information exchange agreement with the European country.
Prime Minister Narendra Modi held a bilateral meeting with the visiting prince where both sides discussed ways to boost bilateral trade and investment, focusing on expanding cooperation in advanced manufacturing, technology, innovation, financial services, agriculture, space, education, and skills development, George said.
This is Alois’ fifth visit to India, following his most recent trip for the AI Impact Summit in February.
The visit offers an important opportunity to boost economic ties through greater government-to-government and business-to-business engagement, he said. “The visit assumes special significance as it is taking place during the commemoration of the first anniversary of operationalisation of the India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA),” George said. The agreement sets a target of $100 billion in investment from EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland) and the creation of 1 million direct jobs in India over a 15-year period. “Its effective implementation can help expand trade and investment ties and create new opportunities for businesses in both countries, along with job creation in India.”
Bilateral engagement has steadily expanded to new areas of cooperation, but there is considerable scope to further strengthen partnership in technology, innovation, and skill development, George said.
“Discussions also included exploring opportunities for cooperation in skill development and vocational education, including through institutional partnerships, expertise exchange, and industry linkages. There was a clear emphasis on advancing the 3Ts-trade, technology, and talent-to deepen bilateral cooperation,” he added.