India-France DTAA Changes: P-notes Face Higher Dividend Tax

• Proposed changes to the India-France Double Taxation Avoidance Agreement (DTAA) may reduce the attractiveness of P-notes issued from France.
• The dividend tax for French investments holding less than 10% equity in an Indian company could increase from 10% to 15%, directly impacting P-note investors.
• France is currently a preferred jurisdiction for P-notes due to capital gains tax exemption and protection from anti-avoidance rules (GAAR).
• The proposed changes could make India's GIFT City a more attractive alternative for routing investments.
• P-notes allow foreign investors to invest in Indian markets without direct registration, with France being a major issuer.

Why It Matters: India-France tax changes threaten P-note appeal, impacting foreign investment.