Correct Option (b):
India has a Double Taxation Avoidance Agreement (DTAA) with Mauritius. This agreement historically allowed investors routing funds through Mauritius to avoid capital gains tax in India. Mauritius, being a low-tax jurisdiction, became a preferred conduit for foreign investment into India, leading to a significant portion of FDI originating from there.
Incorrect Options:
Option (a): India does not have a formal policy of preference for specific countries regarding FDI inflows. Foreign Direct Investment policies and regulations are generally applied uniformly to all investing nations, subject to international agreements.
Option (c): While cultural and ethnic ties may exist between citizens of Mauritius and India, these do not constitute a primary driver for the large volume of FDI. Investment decisions are predominantly based on economic factors, regulatory frameworks, and tax efficiency.
Option (d): There is no established correlation or evidence to suggest that impending dangers of global climatic change in Mauritius prompt significant investments in India. Investment decisions are typically driven by economic returns, market access, and regulatory stability, not by climate-induced relocation of capital in this manner.