India and Liechtenstein Eye Tax Pact to Supercharge Investments
India and Liechtenstein explore a Double Taxation Avoidance Agreement to boost investment and economic ties under the TEPA framework.
India and Liechtenstein are moving toward a strategic financial alignment as both nations discuss a proposed India Liechtenstein DTAA (Double Taxation Avoidance Agreement). This move is designed to eliminate the burden of double taxation, providing a clearer and more predictable legal landscape for businesses and investors looking to operate across both borders.
The discussions took place during the high-profile state visit of Hereditary Prince Alois of Liechtenstein to India. In a joint statement, both nations confirmed that Liechtenstein has already submitted a draft of the agreement, which India is now prepared to evaluate.
Strengthening the Economic Bridge
The push for a tax treaty is not an isolated event but a critical step in deepening bilateral trade. Both countries recognize that legal certainty and transparency in tax matters are essential for facilitating smoother economic exchanges and encouraging long-term corporate commitments.
This initiative aligns with the broader goals of the India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA), which became effective in October 2025. The TEPA is an ambitious framework with a massive target: mobilising USD 100 billion in investments into India over the next 15 years, with the goal of creating one million direct jobs through EFTA member countries.
Key Sectors for Future Collaboration
Beyond tax laws, India and Liechtenstein have identified a wide array of high-tech and industrial sectors where they can collaborate. These include:
- Advanced Manufacturing: Precision industries, machinery, and machine tools.
- Cutting-Edge Tech: Artificial Intelligence (AI) and space-related industries.
- Infrastructure & Health: Construction technologies, medical technology, and clean energy solutions.
- Finance: Enhanced cooperation in financial services.
Current Investment Landscape
While the potential for growth is vast, Liechtenstein already has a footprint in the Indian market. According to MEA Secretary (West) Sibi George, the cumulative foreign direct investment (FDI) inflows from Liechtenstein to India have reached USD 110 million.
Several prominent Liechtenstein-based entities are already operating within India, including:
- Hilti Corporation
- Savannah Seeds
- LGT (Financial services group)
What Happens Next?
The draft agreement is currently in the hands of the Indian government. Secretary Sibi George noted that the document will be meticulously examined by experts within the Ministry of Finance to ensure it aligns with India's economic interests.
Both nations have expressed a strong desire to maintain the momentum generated by Prince Alois' visit, urging industry associations and businesses to engage in partnerships and business missions to turn these diplomatic discussions into concrete economic results.