GIFT City Surges Ahead: 1,000+ Registrations, $100 Billion Assets, and Strong Trading Volumes Mark Progress Towards Global Financial Hub Status

GIFT City, India's ambitious international financial services center, is making substantial strides towards its goal of becoming a global financial hub. Dipesh Shah, Executive Director at the International Financial Services Centres Authority (IFSCA), revealed that GIFT City has surpassed 1,000 registrations, a dramatic increase from just 129 since the authority's establishment. The banking asset size within GIFT City has reached $100 billion, a significant shift from previously sourcing most lending from outside India. The financial center now accommodates 35 diverse business segments, including alternative investment funds and FinTech firms. The stock exchange in GIFT City recorded a monthly turnover of $103 billion, demonstrating robust market activity.

Further highlighting the growth, V Balasubramaniam, MD and CEO of NSE International Exchange, stated that its subsidiary, MSC International, holds over 99% market share. Derivatives trading and open interest have seen substantial increases, with open interest reaching $22 billion, a key liquidity measure. He noted that NSE International Exchange's open interest is four to five times that of India's domestic market.

Experts also discussed the evolving ecosystem. Revati Kasture, CEO of CareEdge Global IFSC, emphasized the crucial role of rating agencies in completing the financial ecosystem, noting an opportunity for Indian agencies to emerge in this space currently dominated by US firms. Tushar Sachade, partner at PwC, pointed out the importance of policy, suggesting a longer tax holiday certainty of 15-20 years for businesses operating in GIFT City to foster sustained growth.

Impact: This news indicates significant progress in developing a competitive international financial center within India. It suggests increased foreign investment, growth in India's financial services sector, and a potential reduction in capital outflow for financial activities. The continued expansion of GIFT City could enhance India's global financial standing and provide opportunities for domestic financial institutions and service providers. Rating: 7/10

Difficult Terms: IFSCA: International Financial Services Centres Authority - The regulatory body overseeing financial services in India's International Financial Services Centres (IFSCs) like GIFT City. FinTech: Financial Technology - The use of technology to deliver financial services and products. Alternative Investment Funds (AIFs): Pooled investment vehicles that collect funds from sophisticated investors or institutions to invest in specific assets like private equity, venture capital, or hedge funds. Derivatives: Financial contracts whose value is derived from an underlying asset, index, or interest rate, such as futures and options. Open Interest: The total number of outstanding derivative contracts (futures or options) that have not yet been settled or closed out. Liquidity Measure: A metric used to assess how easily an asset can be bought or sold in the market without significantly affecting its price. Risk Management Markets: Markets where financial instruments and strategies are used to mitigate or hedge against potential financial losses. Financial Ecosystem: The network of financial institutions, markets, instruments, services, and regulations that collectively facilitate financial transactions and economic activity. Issuers: Entities, such as companies or governments, that issue financial instruments (like stocks or bonds) to raise capital. Depositors: Individuals or entities who place money into a bank or financial institution for safekeeping and potential interest earnings. Trustees: Individuals or entities entrusted to hold and manage assets or enforce the terms of an agreement for the benefit of others. Rating Agency: Companies that assess and provide opinions on the creditworthiness of borrowers (corporations, governments) and assign credit ratings. Tax Holiday: A period during which a business is exempt from paying certain taxes, often offered as an incentive for investment or establishment.