The government said on Tuesday that world-class foreign institutions will be allowed to open in Gandhinagar’s GIFT City, free of domestic regulations, to help with the availability of competent workers in the financial services sector.
In addition, Finance Minister Nirmala Sitharaman announced at the presentation of the Union Budget for 2022-23 that an international arbitration centre will be established in the GIFT City to expedite the resolution of disputes under international law.
The Center could be modeled like the Singapore International Arbitration Centre or the London Commercial Arbitration Centre, for example.
Currently, GIFT-IFSC is the maiden international financial services centre in India.
The finance minister said, ”World-class foreign universities and institutions will be allowed in the GIFT City to offer courses in financial management, fintech, science, technology, engineering and mathematics free from domestic regulations, except those by IFSCA”.
The move will facilitate the availability of high-end human resources for financial services and technology, she added.
According to the minister, services for global capital for sustainable and climate finance in the country will be facilitated in the GIFT City (Gujarat International Finance Tec-city.
To further promote the IFSC, she proposed to provide tax exemption on the income of a non-resident from offshore derivative instruments, or over the counter derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship and income received from portfolio management services in IFSC.
This is subject to a specified condition.
”The exemption of income tax would promote various business activities such as ship leasing and financing, offshore fund management and offshore banking activities in GIFT IFSC,” Tapan Ray, MD and Group CEO, GIFT City said.
He, further, said that Union Budget announcements reiterate the commitment of the Ministry of Finance towards energising the regulatory ecosystem at GIFT IFSC (International Financial Services Centre), which will have a huge multiplier effect on the country’s economic growth.
”The setting up of world-class universities without any domestic regulation will facilitate skilled manpower in the financial services space. International arbitration centre will strengthen the dispute resolution mechanism at GIFT IFSC and enhance ease of doing business at GIFT,” he added.
Manoj Purohit, Partner & Leader – Financial Services Tax, BDO India, said that proposal to allow the setting up of world-class financial institutions and universities free from domestic regulations under IFSCA will give a boost to human resources development and expansion in GIFT IFSC.
The International Financial Services Centres Authority (IFSCA) is a unified authority for the development and regulation of financial products, financial services and financial institutions in the IFSC in India.