The Union Budget has proposed several measures to enhance business activities at the Gujarat International Finance Tec-City – International Financial Services Center (GIFT IFSC).
These include delegation of powers under the SEZ Act to the International Financial Services Centers Authority (IFSCA) to avoid dual regulation, setting up a single-window IT system for registration and approval from IFSCA, SEZ authorities, Goods and Services Tax Network (GSTN) Is. Permitting acquisition financing by Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDAI), as well as IFSC banking units of foreign banks.
As per the budget proposal, a subsidiary of EXIM Bank will be set up in GIFT IFSC for business refinance and the IFSCA Act will be amended to have statutory provisions for arbitration, ancillary services and to avoid dual regulation under the SEZ Act.
The measure also includes recognizing offshore derivative instruments as valid contracts, Finance Minister Nirmala Sitharaman told Parliament. “For countries looking for digital continuity solutions, we will facilitate the establishment of their data embassies at GIFT IFSC,” she said.
In a note on the Budget, law firm Cyril Amarchand Mangaldas said that as far as GIFT IFSC is concerned, it is proposed to exempt income distributed by IFSC banking units to non-resident offshore derivative instruments (ODI) holders in the hands of ODI holders. ,
“Transfer of ODI in the hands of non-residents has already been exempted,” the firm said.
Ketki Mehta, Partner – GIFT Citi, Cyril Amarchand Mangaldas said, “With regard to GIFT IFSC, Budget 2023 will help in doing business by streamlining the process through setting up of a single-window clearance system for various inter-regulatory approvals and procedures The emphasis is on ease. and providing a solution to the dual law.
“This will encourage many private entities to consider GIFT IFSC with renewed vigour,” he added.