Under the new rules, French companies holding at least 10% in an Indian entity will pay a 5% tax on dividends, down from 10% earlier. For minority French shareholdings of under 10% in Indian companies, however, dividend tax will rise from 10% to 15%. Reuters was first to report the details of the planned tax treaty in December. The move could impact France-based foreign portfolio investors that owned $21 billion worth of shares in Indian companies as of January 2026, according to Indian share depository data. If a country has an MFN clause with India under a treaty, it would typically start claiming lower tax rates if New Delhi strikes more favourable tax terms later with another OECD nation.

Source: Economic Times February 23, 2026 14:13 UTC