April 3, 2023
India’s plans to establish an International Finance Service Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City) in Gandhinagar have received a major boost.
The GIFT-IFSC is seen as a groundbreaking financial reform that supports India’s more liberal approach on capital account convertibility. The IFSCA has received authority under the Special Economic Zone Act (SEZ Act) through the Union Budget 2023 to avoid double regulation.
The GIFT City project, which houses the first and only IFSC in India, was first suggested by Prime Minister Narendra Modi in 2007 when he was the Chief Minister of Gujarat. The Union Finance Minister Nirmala Sitharaman announced the project’s expansion plans in the recent budget, highlighting the objectives for national progress and GIFT City’s crucial contribution to India’s success story.
The Global Financial Centres Index, London Report (March 2022) ranked GIFT City’s IFSC first among 15 worldwide centers, indicating the expanding prominence of the IFSC.
The Union Budget 2023 includes a single-window IT system for IFSCA, SEZ authorities, GSTN, RBI, SEBI, and IRDA registration and clearance.
Tapan Ray, MD and Group CEO of GIFT City, believes that the policy support outlined by the Union government will accelerate the expansion of GIFT City and make it a thriving global financial hub for domestic and international businesses. The finance minister has recommended revising the IFSCA Act to include mandatory arbitration clauses, ancillary service rules, and a provision to prevent duplicate regulation under the SEZ Act.
In conclusion, the GIFT-IFSC has become a high concentration of financial institutions, which provide specialized financial services to residents and non-residents in an environment that fosters financial innovation and makes cross-border transactions easier.
