India, Liechtenstein working to fast-track double taxation avoidance pact

India and Liechtenstein are working to expedite a Double Taxation Avoidance Agreement (DTAA) that could strengthen investment flows into India, with the European country sharing a draft that will be examined by the Finance Ministry, a senior Ministry of External Affairs (MEA) official said on Tuesday.

Prime Minister Narendra Modi and Liechtenstein’s Hereditary Prince Alois, the country’s acting head of State, who is on an official visit to India from October 25-28, discussed ways to deepen cooperation in trade and investment, science and technology, innovation and skill development.

The talks focused on implementing the India-EFTA Trade and Economic Partnership Agreement (TEPA). “The visit provides an important opportunity to promote economic ties by greater G2G and B2B engagements. The visit assumes special significance as it is taking place during the commemoration of the first anniversary of operationalisation of India-EFTA TEPA,” MEA Secretary (West) Sibi George said at a media briefing.

On the proposed DTAA, George said Liechtenstein sees it as an enabling framework offering greater predictability and legal certainty for its companies investing in India. This matters because TEPA envisages $100 billion in investment from EFTA countries over 15 years and the creation of one million jobs in India.

“We have received a draft DTAA from Liechtenstein. We would be examining it. This is in the domain of Ministry of Finance. Experts will look at it to see how it will help us to have further economic engagement. Liechtenstein side has expressed its interest in having this agreement with India as part of their efforts to further enhance their investments and business with India,” George said.

Liechtenstein’s cumulative investment in India stands at $110 million, which officials see as leaving considerable room for growth. Bilateral trade totalled about $3.3 million in FY26, with India’s exports less than $1 million.

India exported electric heating resistors, organic compounds (including cefadroxil, ibuprofen, nifedipine and ranitidine), parts of non-electric furnaces and ovens, and vacuum pumps. It imported precision instruments and machinery.

The Prince is accompanied by a business delegation that includes Hilti, Savannah Seeds and LGT. Hilti’s new manufacturing facility in Vadodara is an export-oriented unit expected to ship around 95 per cent of its production, the official said.

Savannah Seeds’ hybrid varieties and seed technologies could help improve agricultural productivity, particularly in rice, as TEPA is implemented. LGT, a global wealth management group, has established a presence in India through a subsidiary.