Round Tripping via Mauritius: How Indian Money Returns Home

Round Tripping via Mauritius: How Indian Money Finds Its Way Back Home 🇮🇳

Money has an interesting way of travelling — sometimes it goes abroad only to come right back home looking “legit.” This global financial dance is what experts call #RoundTripping — when Indian cash is sent overseas and then reinvested back into India through foreign direct investments (FDI) or private equity (PE) routes under seemingly clean paperwork.

It sounds lawful on paper — and sometimes it actually is. But in several high-profile cases, this same structure has been used to disguise black money as white.

Let’s break it down, simply.

💡 What Exactly Is Round Tripping?

Round tripping happens when funds generated in India — often through cash-based or opaque transactions — are moved offshore, only to be brought back as foreign investments.

The reinvestment happens through legal channels like #FDI, #FPI, or Private Equity (PE) funds, complete with paperwork that makes the money look like it came from abroad.

In reality, it’s the same Indian money — now wearing a suit and tie of legitimacy.

🌴 Why Does Mauritius Play a Starring Role?

Mauritius has become a global hub for routing investments into India — second only to Singapore.
Till FY2023, Mauritius contributed nearly $8 billion in FDI to India.

So, why Mauritius?

1. Tax Treaties – India and Mauritius have a Double Taxation Avoidance Agreement (DTAA) that, for years, made capital gains from Indian investments tax-free in India.

2. Ease of Incorporation – Setting up offshore entities there is quick, low-cost, and discreet.

3. Network of Trade Agreements – Mauritius enjoys strong trade and investment treaties across the world, giving investors multiple cross-border advantages.

4. Regulatory Comfort – Indian regulators often recognize Mauritius-based entities as credible institutional investors (especially for #FPIs).

Simply put, Mauritius became the favourite doorway to send money out and bring it back in.

🕵️♂️ The Big Names Linked to Mauritius Round Tripping

Over the years, several high-profile cases have highlighted how the Mauritius route has been allegedly used for #moneylaundering and #taxevasion:

1. Mahadev App Case – Approx. ₹400 crore reportedly routed through offshore entities.

2. NDTV Case – Allegations of shell company structures and ₹403 crore routed via Mauritius.

3. Sahara Group – Nearly ₹5,000 crore moved through Mauritius-based firms.

4. Ravi Narayan (Infotech Parks) – Alleged routing of several thousand crores using PE and real estate structures.

Each of these cases followed the same five-step playbook — let’s see how that works.

🔄 Step-by-Step: How Round Tripping Actually Happens

Here’s the simple version of how round tripping operates:

1. Generate Cash in India – From business profits, undeclared income, or unaccounted sales.

2. Move Money Abroad – The most common routes:

   • Crypto transfers (modern form of hawala)

   • Shell company payments under fake invoices

   • Over-invoicing imports to send excess money overseas

3. Create an FPI or PE Fund in Mauritius – The offshore entity now becomes a “foreign investor.”

4. Reinvest in India as FDI – The same funds come back as “legitimate” investments in startups, media, or real estate.

5. Show Compliance Under FEMA – On paper, it looks like a fully legal foreign investment with audited documentation.

That’s how Indian black money often re-enters India — all while ticking the boxes of #FEMA and #FDIcompliance.

⚠️ What Should Investors and Businesses Be Careful About?

While Mauritius-based investments can be completely legal, they come under intense scrutiny from Indian regulators like #ED, #SEBI, and #RBI.

If you’re genuinely using Mauritius or any offshore route for business expansion, make sure you:

• Have transparent fund trails

• Use recognized banking and FPI channels

• Follow #FATCA, #FEMA, and #GAAR guidelines

• Get proper legal vetting before accepting or routing funds

Always remember — once an investigation starts, “I didn’t know” doesn’t hold up in court.

🧾 Final Thoughts

Mauritius isn’t the villain here — intent is. The same laws that help legitimate global investors enter India are sometimes exploited to wash money.

Understanding this ecosystem helps honest businesses stay compliant and ahead of regulatory traps.

If you’ve ever come across companies raising funds via Mauritius — think twice, and ensure every rupee has a clean passport. 🌍

🧾 Shunyatax Global says that financial clarity starts with informed decisions. We provide end-to-end tax filing, auditing, bookkeeping, NRI services, business setup in Dubai, and  investment planning for individuals and businesses.

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