India-Luxembourg Virtual Summit: Key Facts
On November 19, 2020, India and Luxembourg held the first stand alone summit in two decades.
The countries appreciated the launch of four Luxembourg satellites by Indian Space Research Organization in 2019. India welcomed Luxembourg’s decision of joining International Solar Alliance. Luxembourg has agreed to extend its full support to India during its term in United Nations Security Council (2021-22).
Why is Luxembourg important to India?
- Luxembourg is the third largest source of Foreign Portfolios after US and Mauritius. The country accounts to 8.5% of FPI of India.
- Luxembourg is the world’s most important financial centres of the world. Indian companies are raising huge capital through the Global Depository Receipts on Luxembourg Stock Exchange.
Luxembourg is the second richest country in the world. The average GDP per capita of Luxembourg is 79,593 USD. The country is rich because the majority of the population is working in Germany, France and Belgium but living in Luxembourg. Therefore, France, Germany and Belgium are the major trading partners of the country. Also, the financial sector of Luxembourg is huge.
Why is financial sector in Luxembourg big?
Luxembourg attracts as much FDI (Foreign Direct Investment) as that of the United States in spite of holding just 6 lakh citizens. Around 4 trillion USD of FDI comes into the country. This is mainly because, the country is a big tax haven. (Tax Haven is a country where taxes are levied at very low rates).
Luxembourg is one of three major Tax Havens of the European Union. The other two are Ireland and Netherlands.
The diplomatic relations between the countries was established in 1947. The bilateral trade between India and Luxembourg between 2000 and 2015 was at 1,383 million USD. Luxembourg has invested in software, chemicals and automobiles in India.
Category: International Current Affairs