TREATY DESIGN, REVENUE SOVEREIGNTY AND INVESTMENT FACILITATION: A CRITICAL EVALUATION OF INDIA'S DOUBLE TAXATION AVOIDANCE AGREEMENTS, WITH SPECIAL REFERENCE TO THE INDIA–MAURITIUS TREATY

Double Taxation Avoidance Agreements (DTAAs) occupy a central position in the building of international tax law and in the investment strategy of capital-importing economies. This paper undertakes a critical evaluation of India’s treaty framework, examining the rationale for entering into DTAAs, their reconciliation with the domestic income-tax regime, and the structural weaknesses through which treaty benefits are diverted from their future beneficiaries. The study adopts a doctrinal and analytical methodology, drawing on secondary sources, statutory provisions and judicial statements, and employs the India–Mauritius treaty as an extended case study. The analysis finds that treaties enhance certainty, protect cross-border investment and strengthen administrative co-operation, but that the same instruments, when drafted without suitable anti-abuse safeguards, facilitate treaty shopping, double non-taxation and erosion of the source-country tax base. The paper concludes that India’s interests as a capital-importing developing economy are better served by a source-oriented treaty policy associated with the United Nations Model Convention, supported by anti-abuse provisions and periodic renegotiation clauses.

Keywords: double taxation; DTAA; treaty shopping; double non-taxation; India–Mauritius treaty; foreign direct investment; model conventions