A
A bilateral agreement to eliminate customs duties on pharmaceutical imports
B
Routing investments through a third country solely to exploit favorable tax treaty provisions
C
Direct government procurement of foreign sovereign bonds
D
Shifting domestic manufacturing units to Special Economic Zones for export rebates
Correct answer: (b) Routing investments through a third country solely to exploit favorable tax treaty provisions
Explanation
Option B is correct because treaty shopping involves routing investments through an intermediary jurisdiction solely to take advantage of favorable tax treaty provisions between countries. Options B, C, and D describe entirely unrelated economic and trade activities.
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.