Bharatpedia

GIFT City

Revision as of 13:16, 31 December 2022 by 103.241.225.183 (talk) (→‎Administration)


Gujarat International Finance Tec-City (GIFT City) is central business district under-construction in Gandhinagar and Ahmedabad in Gandhinagar district in Gujarat, India. It is India's first operational greenfield smart city and international financial services center, which the Government of Gujarat promoted as a greenfield project. GIFT City, an emerging global financial and IT services hub and a first-of-its-kind in India, is designed to be at or above par with globally benchmarked business districts. GIFT City presents us with a one-time opportunity to create a “Delaware-like island” that while being under Indian control, can provide entrepreneurs and investors with the best of both worlds.

GIFT City
City
Gujarat International Finance-Tec City
Night view of Gift City
Night view of Gift City
GIFT City is located in Gujarat
GIFT City
GIFT City
Location in Gujarat, India
GIFT City is located in India
GIFT City
GIFT City
GIFT City (India)
Coordinates: 23°09′35″N 72°41′04″E / 23.159626°N 72.684512°E / 23.159626; 72.684512Coordinates: 23°09′35″N 72°41′04″E / 23.159626°N 72.684512°E / 23.159626; 72.684512
Country India
StateGujarat
DistrictGandhinagar
MetroAhmedabad-Gandhinagar Metro
Government
 • BodyGujarat International Finance Tec-City Company Limited
Area
 • Total3.99 km2 (1.54 sq mi)
 • Rank3.58[1]
Languages
 • OfficialGujarati, Hindi, English
Time zoneUTC+5:30 (IST)
Telephone code+91
Vehicle registrationGJ18
Websitegiftgujarat.in

Let India-based entrepreneurs incorporate in Gift City, let them accept investments in any currency from investors around the world (barring those from defined restricted jurisdictions, e.g. neighboring countries, sanctioned countries), let them hold money in USD or INR, let Indian residents be allowed to invest freely. Let them list in the NSE/BSE or on NASDAQ/HongKong or London Stock Exchanges. When entrepreneurs or employees or investors based in India make money, or companies become profitable, just set it up so that they pay their taxes in India, regardless of where they get listed themselves.

Setting up GIFT City as a hybrid location can quickly make GIFT City the preferred choice of entrepreneurs and ensure that the long-term value capture happens in India. Startups across India will be from all corners, and GIFT City can be a great common denominator, while allowing the freedom to leverate the distributed ecosystem of India. Anything domestic will still be in the form of a wholly owned subsidiary, but allow Indian AIFs or overseas investors to invest in GIFT City incorporated companies in INR or USD, pari-passu. One small but important benefit is that all the investment dollars which are currently being held in banks in the US/Singapore will also now be held in the “Indian” banking system, whether in USD or INR.

Location and implementation

The city is located on the banks of the Sabarmati River and is around 12 km (7.5 mi) from Sardar Vallabhbhai Patel International Airport.[2][3][4][5] The city is designed so residents can walk to work, and includes commercial, financial and residential complexes.

The city is connected through 4-6 lane State and National Highways. A metro station is also planned for construction, which would connect GIFT City to the Ahmedabad Metro network, and is expected to be completed by March 2024.[6][7]

The total area for the development of GIFT is 886 acres out of which the SEZ (Special Economic Zone) constitutes 261 acres. The project area under development can hence be classified under the SEZ area and the Non-SEZ area (also known as the Domestic Tariff area or the DTA).[8]

GIFT City has dedicated Multi Services Special Economic Zone (SEZ) for international operations of various services sectors players. Also within the GIFT Multi Services SEZ, GIFT houses India's first International Financial Services Center (IFSC) approved by the Government of India.[8]

For the purpose of implementation of the SEZ, GIFT Company Limited has set up an SPV (Special Purpose Vehicle) (100% subsidiary of GIFTCL) namely GIFT SEZ Ltd, designated as the developer organization of the SEZ. GIFTCL has also set up 5 subsidiary companies for the implementation of specialized infrastructure including Power, Water, ICT (Information & Communication Technology), District Cooling and solid waste management.[5]

History

 
Prime Minister Narendra Modi in 2017 at the India International Exchange inauguration ceremony in GIFT City.[9][10]

On 15 December 2011, The Economic Times reported city officials in GIFT were inviting companies from Singapore that wished to expand but could not do so due to a lack of land in Singapore to open their businesses in GIFT. Investments from banks, private equity companies, insurance companies and asset management companies were considered.[11]

On 26 December 2011, The Times of India reported China's technology giant Huawei was likely to provide technology to GIFT. According to Eric Yu, president, enterprise business of Huawei India, this technology included networks, data centres and surveillance.[12]

On 2 October 2014, NetIndian reported a new World Trade Center would be set up in GIFT City as per an agreement between World Trade Center India Services Council (WTCS) and GIFT City Ltd. It would be completed within four years.[13]

BSE Broker's Forum planned to invest ₹120 crore to build a commercial tower to set up back-office operations. They were allocated 28,000 square metres (300,000 sq ft) to develop the commercial tower with the likelihood of setting up an exchange office.[14]

According to The Times of India on 18 October 2014, the Bangalore-based Brigade Group would invest ₹500 crore over the next few years to develop 100,000 square metres (1.1×10^6 sq ft) of built up area with a future option of investing another ₹600 crore to develop 160,000 square metres (1.7×10^6 sq ft).[15]

In November 2018, The Wire reported the Government of Gujarat State would buy out the 50% stake of beleaguered Infrastructure Leasing & Financial Services (IL&FS) in the GIFT City to minimize delays to the project.[16] In June, 2020, IL&FS concluded sale of its stake in GIFT-City for ₹32 crore equity value to the state government.[17]

According to Business Standard, OPS Fund Services, a subsidiary of OPS Global, Singapore, received a license to open in the International Financial Service Centre at GIFT city.[18]

On 5 December 2019, Business Standard reported that Bank of America opened a Global Business Services Center at GIFT.[19]

On 6 January 2020, Accor opened the first international hotel in GIFT City.[20]

On 20 January 2020, The Economic Times reported GIFT was ready to begin trading in rupee-dollar in the futures market.[21]

In July 2022, JPMorgan Chase, Deutsche Bank and Mitsubishi UFJ Financial Group opened new offices at the International Financial Services Centre.[22] Prime Minister Narendra Modi formally opened Singapore Exchange's futures trading operation "Nifty",[23] and India's first international bullion exchange was opened.[24]

Construction timeline

 
Utility Tunnel at GIFT City

Two 28-floor commercial towers called GIFT One and GIFT Two have been finished. Tendering for the construction of more towers is ongoing.[25] This phase will also include the building of basic infrastructure.[25] India's first city-level district cooling system (DCS) is operational at GIFT City. The first phase of this DCS, with a capacity of 10,000 Ton of refrigeration has been in operation since April 2015; it is designed to reduce the operational cost and avoid the capital cost of implementing individual air conditioners in each building.[26]

Consultants

  • Owner - The Amazing
  • Design and Architecture - East China Architectural Design & Research Institute (ECADI) and Fairwood Consultants India
  • ICT Advisory Services - British Telecom
  • Market Demand Assessment - McKinsey & Company
  • Talent Demand Assessment - Hewitt Associates
  • Environmental Assessment - IL&FS Ecosmart Ltd
  • Process Management - IL&FS Infrastructure Development Corporation Ltd
  • Power Management - ABB Group[27]

Status

As part of Phase-I development, around 780,000 square metres (8.4×10^6 sq ft) of built-up area has already been allotted from the 1,200,000 square metres (13×10^6 sq ft) available for commercial, residential and social use.[28] On 11 September 2019, Tapan Ray, managing director and Group CEO of GIFT City, said the city had attracted around ₹11,000 crore of investment.[29]

Divisions

File:GIFT City Map.jpg
GIFT City Divisions
Zones Area
SEZ - PA 61.1829 Ha (130.5acres)
SEZ - N PA 44.2557 Ha (130.5 acres)
TOTAL (SEZ) 105.4386 Ha (261 acres)
DTA 252.93 Ha (625 acres)
GRAND TOTAL 358.3686 Ha (886 acres)

Administration

The Government of Gujarat formed "Gujarat International Finance Tec-City Company Limited" (GIFTCL) to develop and implement GIFT City through its venture Gujarat Urban Development Company Limited (GUDCL). GIFT City is an 886-acre integrated project that creates 62 million square feet of built-up area, including 67% commercial space, 22% residential space and 11% community space.

GIFT Managing Bodies

  • Gift Power Company Limited
  • Gift Waste Management Services Limited
  • Gift Water Infrastructure Limited
  • Gift ICT Services Limited
  • Gift Collective Investment Management Company Limited
  • Gift SEZ Limited

Utilities

District Cooling System

 
Utility Tunnel GIFT City

India's first city-level district cooling system (DCS) is operational at GIFT City. The first phase of this DCS, with a capacity of 10,000 Ton of refrigeration has been in operation since April 2015; it is designed to reduce the operational cost and avoid the capital cost of implementing individual air conditioners in each building.[30]

Automated Waste Collection

The city plans to collect its solid waste through Automated Waste Collection system through chute system where waste is sucked in pipes at a speed of 90km/hr. It is expected upon completion that the AWS will handle the waste of the entire district, which is expected to be over 400 tonnes per day generated from GIFT City’s 25,000 apartments, 100,000 residents and a working population of over 500,000. The site’s retail zone will also attract between 25,000-50,000 visitors each week.[31][32]Automated waste collection can be combined with biomass energy generation systems, so GIFT will burn waste to generate energy.[33][34]

Intelligent Building Management System

The buildings will be prepared with IBMS that controls different capacities of the building. The IBMS will be associated to central command middle to supply interface between the client and the utility benefit supplier.[35]

Central command and control system

GIFT uses advance of technology in form of unique IoT (Internet of Things) based to monitor and manage city Infrastructure.The city will have a central command and control system. The objectives are (i) Co-ordination and Integration among various service providers & users (ii) Disaster Management & Emergency Services; (iii)Ensuring efficient services to the Users; (iv) Ensuring Safety and Security; (v) Record keeping / documentation.[36][37]

Domestic gas

The tenants will have get to to channeled gas for residential employments, maintaining a strategic distance from the customary barrel framework.[38]

Sewerage and waste water treatment

The city plans to collect its solid waste through Automated Waste Collection system through chute system where waste is sucked in pipes at a speed of 90km/hr. This will lead to minimum human intervention, minimum space requirement and a cleaner city. Waste is to be treated with plasma technology.[39][40]

Water infrastructure

The design vision of the city is to provide potable water in all taps of the city which would be available on demand. Water from the Narmada canal will be stored in an artificial reservoir called Samrudhdhi Sarovar(designed for 15 days drinking water storage) and then conveyed to water treatment plant and then distributed. Water pipeline trunk and secondary network will be configured as a loop system.[41]

Power Supply

The city aims to provide quality and uninterrupted power supply to its citizens by sourcing power from independent sources with dedicated transmission infrastructure and having emergency power arrangements for critical areas of power supply.[42]

Dedicated Utility Service Corridor

The highlight of the city is the Dedicated Utility Service Corridor which is an underground tunnel spread across the city which contains all the utility lines. The utility lines of power distribution, potable water, wastewater, gas, chilled water, ICT fibres and solid waste chute will be channelled through this underground tunnel. This makes it easier to operate and maintain these utility services unlike the conventional practise of digging streets regularly for maintenance of utility line.[43][44]

ICT services

The city aims to provide fibre-optics infrastructure to each and every cabin in the city. It will also develop data centre to provide common ICT infrastructure services.[45]

Integrated Transportation

The city will provide integrated urban transport system with high modal split towards public transport. The inter-city features include transit nodes, pedestrian pathways, travellators and multi-level parking. The city will have Intelligent Transport System(ITES) which would give real-time information about traffic, public transportation and routes within the city. The city will be connected to the neighbouring city of Gandhinagar and Ahmedabad by Bus Rapid Transit and Mass Rapid Transit (Metrorail).[46][47]

Gujarat Maritime Cluster

File:Maritime Cluster.jpg
Gujarat Maritime Cluster

Gujarat Maritime Cluster represents a total maritime business ecosystem that offers a way for shipping businesses to operate anywhere in the world, from one world-class location. It is conceived as a dedicated ecosystem of Ports, Maritime Shipping and Logistics services providers. It will host an array of maritime, shipping industry players and service providers, along with relevant Government regulatory agencies, in Gujarat International Finance Tec-City (GIFT City), Gandhinagar – India’s first International Financial Services Centre.[48] The Gujarat Maritime Board (GMB), has been trying to develop such a cluster through its subsidiary Gujarat Ports Infrastructure and Development Company Ltd (GPIDCL). While the project was conceptualised back in 2007, it received in-principle approval from the state government in 2015.[49]

Overview[50]

The Gujarat Maritime Cluster is coming up in the GIFT (Gujarat International Finance Tec-City) City at Gandhinagar to address logistics of ports and seaways.

  • It is conceived as a dedicated ecosystem of Ports, Maritime Shipping and Logistics services providers.
  • It will host an array of maritime, shipping industry players and service providers, along with relevant Government regulatory agencies, in Gujarat International Finance Tec-City (GIFT City), Gandhinagar – India’s first International Financial Services Centre.
  • The Gujarat Maritime Board (GMB), has been trying to develop such a cluster through its subsidiary Gujarat Ports Infrastructure and Development Company Ltd (GPIDCL).
  • While the project was conceptualised back in 2007, it received in-principle approval from the state government in 2015.
  • Unique institutions at the Gujarat Maritime Cluster:
      • Gujarat Maritime University will be set up.
      • Within this, an Alternate Dispute Resolution (ADR) Centre will be set up.
      • This centre will provide an option to Indian players seeking to avoid availing the services of international alternative dispute resolution hubs which entail huge costs, time, and travel.
      • The cluster is also expected to house the office of the Director General of Shipping.

GMB Ports[51]

The ports under the jurisdiction of Gujarat Maritime Board are grouped into 10 Group of Ports, namely – Magdalla, Bharuch, Bhavnagar, Jafrabad, Veraval, Porbandar, Okha, Jamnagar, Navlakhi and Mandvi.[52]

GMIAC

This will be the first centre of its kind in the country that will manage arbitration and mediation proceedings with disputes related to the maritime and shipping sector. The GIMAC will be part of a maritime cluster that the Gujarat Maritime Board (GMB) is setting up in GIFT City at Gandhinagar.[53][54]

  • Overview:
    • This will be the first centre of its kind in the country that will manage arbitration and mediation proceedings with disputes related to the maritime and shipping sector.
    • The GIMAC will be part of a maritime cluster that the Gujarat Maritime Board (GMB) is setting up in GIFT City at Gandhinagar.[55]
  • Need:
    • India’s Focus on Arbitration: Recently, the Arbitration and Conciliation (Amendment) Act, 2021 was notified, considered as the landmark step towards making India as the hub of International Commercial Arbitration.
      • Arbitration is a kind of dispute resolution method where the disputes arising between the parties are resolved by the arbitrators appointed by them instead of state's legal bodies.
    • There are over 35 arbitral institutions in India, however, none focus exclusively on the disputes related to the maritime sector.
      • With the state continuing to witness a rapid extension in maritime activities and inching closer to becoming a global maritime hub with the implementation of Gujarat Maritime Cluster project, a strong growing and recurring demand is being generated for a specialized facility for maritime arbitration services.
    • The idea is to create a world-class arbitration centre focused on maritime and shipping disputes that can help resolve commercial and financial conflicts between entities having operations in India.
      • The arbitration involving Indian players is now heard at the Singapore Arbitration Centre.
      • Globally, London is the preferred centre for arbitration for the maritime and shipping sector.[56]
  • Benefits:
    • Facilitate faster dispute resolution.
    • Enhance the attractiveness of GIFT Special Economic Zone (SEZ) among the International Maritime Community.
    • Increase the ease of doing business.
    • Reduce burden on courts.

Milestones[51]

  • First Port authority to invite private sector participation through competitive bidding and transparent bidding process
  • First state to announce Port Policy, BOOT Policy and Shipbuilding Policy
  • State with highest number of operational ports and commercial cargo ports
  • Gujarat’s Non-Major Ports (viz. GMB Ports) handled ~31% of the total national maritime traffic in FY 2020-21
  • Gujarat’s Non-Major Ports (viz. GMB Ports) handled the equivalent of ~58% of the total national Major Ports traffic in FY 2020-21
  • Gujarat’s Non-Major Ports (viz. GMB Ports) handled ~67% of the total national Non-Major ports traffic in FY 2020-21
  • India’s first private port at Pipavav
  • India’s largest commercial (private) multipurpose port at Mundra
  • India’s largest captive port at Sikka
  • India’s first two operating LNG Terminals at Dahej and Hazira
  • India’s first dedicated chemical port terminal at Dahej
  • One of the world’s largest ship recycling yard at Alang (Bhavnagar)
  • Only state with “Cradle to Graveyard” ecosystem for ships – Shipbuilding to Ship Recycling
  • State-of-the-art institution for maritime skill building – Gujarat Maritime University
  • India’s first private port at Pipavav
  • India’s largest commercial (private) multipurpose port at Mundra
  • India’s largest captive port at Sikka
  • India’s first two operating LNG Terminals at Dahej and Hazira
  • India’s first dedicated chemical port terminal at Dahej
  • One of the world’s largest ship recycling yard at Alang (Bhavnagar)
  • Only state with “Cradle to Graveyard” ecosystem for ships – Shipbuilding to Ship Recycling
  • State-of-the-art institution for maritime skill building – Gujarat Maritime University
  • India’s first private port at Pipavav
  • India’s largest captive port at Sikka
  • India’s first two operating LNG Terminals at Dahej and Hazira
  • India’s first dedicated chemical port terminal at Dahej
  • One of the world’s largest ship recycling yard at Alang (Bhavnagar)
  • Only state with “Cradle to Graveyard” ecosystem for ships – Shipbuilding to Ship Recycling
  • State-of-the-art institution for maritime skill building – Gujarat Maritime University

Gift IFSC

File:Gift IFSC.jpg
Gujarat International Finance-tech City

Gujarat International Finance Tech-city (GIFT) SEZ is India's first International Financial Services Centre (IFSC) under Special Economic Zone Act, 2005 (“SEZ Act 2005”). It is being developed as a global financial services hub.[57]

Overview

GIFT IFSC aspires to become India’s gateway for inbound and outbound requirements of the international financial services. It aims to attract the top talent in the country by providing the finest quality of life.

Government of India operationalized International Financial Services Centre (IFSC) at GIFT Multi Services SEZ in April 2015. The Union Budget 2016 provided competitive tax regime for the International Financial Services Centre at GIFT SEZ. It is the vision of the Hon’ble Prime Minister that GIFT SEZ International Financial Services Centre emerges as a hub for international financial services activities.

Ministry of Finance, Government of India provided new initiative for undertaking international financial services business in India. The regulators namely Reserve Bank of India (RBI), Securities & Exchange Board of India (SEBI), Insurance Regulatory & Development Authority of India (IRDAI) issued regulations allowing Indian and foreign institutions to open their office in the IFSC.[58]

IFSCA

The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India. At present, the GIFT IFSC is the maiden international financial services centre in India.

The International Financial Services Centres Authority (IFSCA) has been established on April 27, 2020 under the International Financial Services Centres Authority Act, 2019. It is headquartered at GIFT City, Gandhinagar in Gujarat. The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India. At present, the GIFT IFSC is the maiden international financial services centre in India. Prior to the establishment of IFSCA, the domestic financial regulators, namely, RBI, SEBI, PFRDA and IRDAI regulated the business in IFSC.

As the dynamic nature of business in the IFSCs requires a high degree of inter-regulatory coordination within the financial sector, the IFSCA has been established as a unified regulator with a holistic vision in order to promote ease of doing business in IFSC and provide world class regulatory environment. The main objective of the IFSCA is to develop a strong global connect and focus on the needs of the Indian economy as well as to serve as an international financial platform for the entire region and the global economy as a whole.[59]

The IFSCA was established in April 2020 under the International Financial Services Centres Authority Act, 2019. It is a statutory authority established by the Indian Government.[60]

  • It is an authority to develop and regulate financial services, financial products and financial institutions in the International Financial Services Centre (IFSC) in India.
    • Currently, there is only one IFSC being developed in India, Gift City, in Gandhinagar, Gujarat.
  • Before the IFSCA was established, the financial services and institutions were regulated by the domestic financial regulators such as SEBI, RBI, IRDAI, PFRDA, etc.
  • The main goal of the IFSCA is to promote ease of doing business in IFSC and provide a world class regulatory environment.
  • The IFSCA will not only regulate the nature of business which will be transacted in the IFSC but will also be regulating the functioning of the entities involved with transacting business in IFSC.
  • IFSCA is headquartered in Gandhinagar. Its current chairman is Injeti Srinivas.[61]

Tax benefits

Tax Incentives for IFSC Unit

Fiscal incentives [62]
Particulars Units in IFSC Investors
Income-tax
  • 100% tax exemption for 10 consecutive years out of 15 years
  • IFSC Unit has the flexibility to select any 10 years out of 15 years block
  • MAT / AMT @ 9% of book profits applies to Company / others setup as a unit in IFSC - MAT not applicable to companies in IFSC opting for new tax regime
  • Dividend paid to shareholders of company in IFSC
    • From 01 April 2020, dividend income distributed by Company in IFSC to be taxed in the hands of the shareholder.
  • Interest income paid to non-residents on:-
    • Monies lent to IFSC units not taxable
    • Long Term Bonds and Rupee Denominated Bonds listed on IFSC exchanges taxable at lower rate of 4%
  • Transfer of specified securities* listed on IFSC exchanges by a non-resident not treated as transfer - Gains accruing thereon not chargeable to tax in India

*Specified securities include Bond, GDR, Foreign currency denominated bond, Rupee-denominated bond of an Indian company, Derivatives, Unit of a Mutual Fund, Unit of a business trust, Unit of Alternative Investment Fund and Foreign currency denominated equity share of a company

Goods and Services Tax (GST)
  • No GST on services –
    • received by unit in IFSC
    • provided to IFSC / SEZ units, Offshore clients
  • GST applicable on services provided to Domestic Tariff Area
 No GST on transactions carried out in IFSC exchanges
Other taxes duties State Subsidies – Lease rental, PF contribution, electricity charges Exemption from STT, CTT, stamp duty in respect of transactions carried out on IFSC exchanges

Tax incentives available to SEZ Units other than IFSC units[63]

  • Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
  • Exemption from customs duty for all goods imported in the SEZ used for authorized operations
  • Supply of goods or services from Domestic Tariff Area (DTA) to a unit located in SEZ Unit is regarded as a zero-rated supply (irrespective of the currency in which payment is being made).
  • Goods and Services supplied to SEZ regarded as export for customs purpose
  • Goods and Service Tax (GST)
  • Supplies to SEZ are Zero Rated under IGST Act, 2017
  • No GST on services,
    • Received by unit in SEZ/IFSC
    • Provided by SEZ/IFSC units to offshore clients
  • Single window clearance for Central and State level approvals

State Subsidies as per the IT & ITeS Policy

Stamp Duty & Registration / Conversion fee exemption Wherever cost is incurred 100% reimbursement of Stamp Duty and Registration Fee paid
Electricity duty and subsidy on tariff 100 % Reimbursement of Electricity duty and Re. 1 subsidy on power tariff for a period of 5 years.
Reimbursement of Provident Fund contribution by employer
  • 100% of EPF amount paid in case of female employees
  • 75% of EPF amount paid in case of male employees
Lease rental subsidy for every 50 sq ft per employee
  • Up to 20 employees -- Rs. 8 per sq. ft.
  • 20 – 100 employees -- Rs. 5 per sq. ft.
  • Above 100 employees -- Rs. 3 per sq. ft.
Capital Subsidy Capital subsidy @ 25% of capital expenditure for one-time purchase of Computers, networking and related hardware, subject to a ceiling of Rs. 1 crore

*The above incentives provided by the Government of Gujrat are applicable to IFSC and GIFT SEZ Units.

Tax Benefits for Companies[64]

To attract foreign and domestic investment in GIFT, the city’s international financial services centre (IFSC) was declared a multi-service Special Economic Zone (SEZ) in 2015 and the Union Budget 2016-17 provided it with a competitive tax regime. Here are the tax benefits for companies falling under IFSC:

  • Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT) not applicable to companies in IFSC opting for new tax regime.
  • Tax holiday for capital gains for aircraft leasing companies, tax exemption for aircraft lease rentals
  • No GST on services received by these companies, provided to IFSC SEZ units or offshore clients
  • State subsidies such as 100 per cent reimbursement of stamp duty and registration fee, 100 per cent reimbursement of electricity duty and Rs. 1 subsidy on power tariff for five years, 100 per cent reimbursement of employer’s provident fund contribution, and lease rental subsidy for every 50 sq ft per employee
  • National/foreign exchanges set up under IFSC have total tax exemption from Security Transaction Tax (STT), Commodity Transaction Tax (CTT), Dividend Distribution Tax (DDT), Long Term Capital Gain (LTCG), Short Term Capital Gain (STCG).[65]

Operational Benefits:[66]

1. Exemption from currency control regulations to IFSC Units:

Under SEZ Act, a unit set up in IFSC is treated as a non-resident. Even under Foreign Exchange Management Act, 2002 (“FEMA“) units in IFSC enjoy the benefits of a non-resident under exchange control provisions.

2. Liberalized currency control regime for Indian residents:

Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 (“ODI Regulations”) restrict investment by an Indian resident into an overseas firm in the financial services sector. To enable, Indian residents to set-up and invest funds in GIFT City, RBI, vide its Circular dated May 12, 2021 has permitted sponsor contribution from a sponsor Indian party in an Alternative Investment Fund (AIF) established overseas, including IFSC. ===Opportunities for Banking Sector in IFSC:===[67] Indian banks and foreign banks can set up their business units in IFSC and can undertake following activities in IFSC: 1.Asset Business:

  • External Commercial Borrowing (ECB) loans to Indian borrowers. Indian borrowers may prefer loans from IBU because of physical proximity and because of known documentation.
  • Buyers credit facilities to Indian borrowers: Pursuant to RBI directions, Indian branches of banks are not allowed to provide buyers credit facilities to the customers. However, since IBU is an offshore branch, it can provide buyers credit facilities to Indian borrowers.
  • Foreign currency Loans to foreign companies.
  • Foreign currency loans to entities registered in IFSC.
  • Export bill discounting facility to Indian businesses.
  • Financing Aircraft and ship leases and acquisitions.

2.Liability Business:

  • Open foreign currency current, savings accounts for Resident Individual and Non-Resident Individuals as per IFSCA Regulations.
  • Foreign currency deposits from banks, corporates, or retail customers.

3.Exchange operations:

  • Clearing and settlement activities for exchanges in IFSC.
  • Professional clearing services.
  • Custody services for securities (depository receipts) registered in IFSC.

Opportunities for Banking Sector in IFSC:[68]

Indian banks and foreign banks can set up their business units in IFSC and can undertake following activities in IFSC:

1.Asset Business:

  • External Commercial Borrowing (ECB) loans to Indian borrowers. Indian borrowers may prefer loans from IBU because of physical proximity and because of known documentation.
  • Buyers credit facilities to Indian borrowers: Pursuant to RBI directions, Indian branches of banks are not allowed to provide buyers credit facilities to the customers. However, since IBU is an offshore branch, it can provide buyers credit facilities to Indian borrowers.
  • Foreign currency Loans to foreign companies.
  • Foreign currency loans to entities registered in IFSC.
  • Export bill discounting facility to Indian businesses.
  • Financing Aircraft and ship leases and acquisitions.

2.Liability Business:

  • Open foreign currency current, savings accounts for Resident Individual and Non-Resident Individuals as per IFSCA Regulations.
  • Foreign currency deposits from banks, corporates, or retail customers.

3.Exchange operations:

  • Clearing and settlement activities for exchanges in IFSC.
  • Professional clearing services.
  • Custody services for securities (depository receipts) registered in IFSC.

References

  1. ↑ "Gujarat International Finance Tec-City - Global Financial Hub | GIFT Gujarat". Giftgujarat.in. Retrieved 3 January 2017.
  2. ↑ "THE GUJARAT INTERNATIONAL FINANCE TEC-CITY (GIFT)". www.gudcltd.com. Retrieved 2 February 2018.
  3. ↑ "GIFT makes steady progress; witnesses a 'hockey stick growth curve'". www.businesstoday.in. Retrieved 1 November 2018.
  4. ↑ Subramanian, N. Sundaresha (1 February 2018). "More gifts for GIFT City may stop flight of capital to Singapore". The Economic Times. Retrieved 2 February 2018.
  5. ↑ 5.0 5.1 "Developments of Ahmedabad".
  6. ↑ "Gujarat International Finance Tec-City to have its own metro stations". The Times of India. Archived from the original on 5 November 2013. Retrieved 3 January 2017.
  7. ↑ "Ahmedabad- Metro Rail: Work on phase 2 of the project to begin in June 2020; details". The Financial Express. 18 November 2019. Retrieved 23 January 2020.
  8. ↑ 8.0 8.1 Rodrigues, Jeanette; Sircar, Subhadip (29 November 2022). "India's Free-Market Oasis Aims to Take On Singapore and Dubai". Bloomberg News. Retrieved 29 November 2022.
  9. ↑ "PM Modi to inaugurate 16-storey international exchange in Gujarat to rival Singapore, Dubai". India Times. Indo-Asian News Service. 9 January 2017. Retrieved 16 January 2017.
  10. ↑ "PM Narendra Modi launches India's first international stock exchange". India Today. 13 January 2017. Retrieved 16 January 2017.
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  36. ↑ "C-4(City Command & Control Centre)". www.giftsez.com. Retrieved 2 December 2022.
  37. ↑ Nilesh Kumar Purey (20 October 2014). "Gift city command and control center concept and_implementation_chall…". {{cite journal}}: Cite journal requires |journal= (help)
  38. ↑ "IOC to set up unit in GIFT City to help raise capital". The Economic Times. Retrieved 2 December 2022.
  39. ↑ "GIFT gives waste the boot, integrates water and waste management | Smart Cities Council". www.smartcitiescouncil.com. Retrieved 2 December 2022.
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  41. ↑ "Wastewater Recycling, Sewage Treatment | Waterfront Development". www.giftgujarat.in. Retrieved 2 December 2022.
  42. ↑ "Power Distribution Companies | Electricity Distribution Company". www.giftgujarat.in. Retrieved 2 December 2022.
  43. ↑ "Utility Tunnel | Water Treatment Plant | Fire Detection System". www.giftgujarat.in. Retrieved 2 December 2022.
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  46. ↑ "Transport". Giftcity.{{cite web}}: CS1 maint: url-status (link)
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  65. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named :2
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External links

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