GIFT City Achieves Major Milestones: Surpasses 1,000 Registrations and $100 Billion in Banking Assets, Eyes Global Financial Hub Status

Gujarat International Finance Tec-City (GIFT City), under the International Financial Services Centres Authority (IFSCA), has marked substantial achievements within five years of its inception. It has registered over 1,000 entities and amassed more than $100 billion in banking assets. The hub has expanded its operations to encompass over 35 diverse business segments, moving beyond its initial focus on banking, insurance, and capital markets. Experts, including Dipesh Shah, executive director of IFSCA, believe GIFT City is now ready to compete with established global financial centers such as Dubai International Financial Centre (DIFC) and Singapore. The city is actively attracting foreign companies, including firms from Silicon Valley, interested in direct listings on exchanges like NSE International Exchange, which recently reported its highest-ever monthly turnover of $103 billion. V Balasubramaniam, MD & CEO of NSE International Exchange, noted that these listings fill a crucial gap for mid-sized companies. Experts also highlighted the positive regulatory environment fostering financial innovation, with calls for extending the current 10-year tax holiday and clarifying tax regulations for outbound investment funds. IFSCA's policy autonomy and globally aligned regulations facilitate easier entry for foreign firms and allow products not permitted in the domestic market.

Impact This development signifies robust growth and increasing maturity of GIFT City as an international financial hub. It highlights the successful efforts of IFSCA in attracting foreign investment and fostering diversification beyond traditional financial services. The development is expected to enhance India's position in global finance, create job opportunities, and potentially boost related economic sectors. The increasing attractiveness for foreign companies, including those from Silicon Valley, suggests growing confidence in India's financial infrastructure and regulatory framework. Rating: 8/10

Difficult Terms IFSCA: International Financial Services Centres Authority - the unified regulator for financial services in International Financial Services Centres (IFSCs) in India. GIFT City: Gujarat International Finance Tec-City - India's first operational smart city and IFSC, designed to be a global financial and IT hub. IFSC: International Financial Services Centre - a jurisdiction that provides financial, banking, insurance, and capital market services to non-residents and residents. DIFC: Dubai International Financial Centre - a financial free zone in Dubai, United Arab Emirates. Direct listings: A process where a foreign company offers its shares directly to investors in another country without listing on its home exchange. IPOs: Initial Public Offerings - the first time a company offers its shares to the public. Turnover: The total value of transactions completed during a specific period. GIFT Nifty: An index representing the performance of the Nifty 50 index traded in GIFT City. Barometer: A gauge or indicator of trends or conditions. Emerging-market perspective: A viewpoint or approach focused on the specific characteristics and opportunities of developing economies. Tax holiday: A period during which a company is exempt from paying certain taxes. Union Budget: The annual financial statement presented by the government of India. Outbound schemes: Investment funds or schemes that invest money outside of India. Trust taxation framework: A tax regime applicable to trusts. Safe-harbour norms: Provisions that protect taxpayers from penalties if they meet certain conditions, providing certainty in tax regulations. Policy autonomy: The ability of a regulatory body to make its own decisions and set its own policies independently. No-objection certificate (NOC): A document that certifies the issuer has no objection to the activity specified. Private credit ratings: Ratings provided to privately held companies or debt instruments not traded publicly. Zero-day expiry contracts: Financial derivatives that expire on the same day they are initiated. Global Access Provider framework: A proposed regulatory framework to facilitate access to overseas assets for GIFT City entities.