IFSCA Chairman: Active Outreach to Attract Global Players to GIFT City

Tanushree Jaiswal Tanushree Jaiswal

Last Updated: 13th June 2024 - 04:43 pm

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In its efforts to boost traction and draw more international entities to GIFT City, the regulatory body International Financial Services Centers Authority (IFSCA) has been actively participating in outreach programs with various foreign companies and jurisdictions.

IFSCA Chairman K Rajaraman stated that GIFT City provides numerous benefits to companies in various sectors. As a result, policymakers are consistently engaging in outreach programs with different international companies. “Since GIFT City is a new jurisdiction, we have to keep meeting people and tell them about the benefits,” said Rajaraman, while speaking at an event at BSE on Wednesday.

He further detailed a specific outreach program where the regulatory body engaged in discussions with representatives from Greece's shipping industry. Greece, which controls over 20% of the global merchant fleet capacity, boasts one of the world's largest merchant fleets.

The outreach program with officials from Greece's shipping sector aimed specifically to raise awareness about the opportunities for establishing ship-leasing units at GIFT City.

Interestingly, in the recent past, Great Eastern Shipping Company initiated the establishment of a ship leasing unit at GIFT City. On March 15, the company's board approved the creation of a subsidiary with an authorized share capital of ₹50 crore to set up a ship leasing unit at the Gujarat-based IFSC.

Meanwhile, a recent statement from IFSCA indicated that the anticipated growth in Indian trade from $1.6 trillion to approximately $4 trillion by 2030 is expected to generate a significant demand for shipping services.

“There are lot of benefits that GIFT IFSC provides for ship leasing companies like streamlined regulatory processes, robust legal framework, ease of doing business, competitive cost, availability of skilled talent, tax incentives, and others,” said the release.

Recently, IFSCA has taken a proactive role in attracting new entities and exploring new segments. In May, the regulatory body formed an Expert Committee chaired by Rajeev Kher, a former Commerce Secretary and member of the Competition Appellate Tribunal, to recommend measures for developing commodity trading at GIFT City.

IFSCA stated that enabling commodity trading at GIFT City will "facilitate business integration of the IFSC financial ecosystem with global trade flows." This move is expected to capitalize on "integration opportunities with major commodity hubs and attract global investment flows into IFSC."

In other recent developments, the final regulations for the direct listing of unlisted companies at GIFT City will be ready within a month, and the International Financial Services Centre (IFSC) may see its first listing within a quarter, according to K Rajaraman, chairperson of the IFSC Authority. The Centre had already issued regulations in January to allow the listing of public Indian companies in GIFT-IFSC. Additionally, the IFSCA solicited feedback on a consultation paper regarding additional regulatory requirements issued in May.

“We realised that our regulations need a little update. Therefore, in the last two months, we have updated the listing regulations that have gone through the public consultation process. We are likely to place it for approval in our authority meeting by the end of this month. It will probably get notified by early next month,” said K Rajaraman, at a conference by BSE.

The IFSCA chairperson further mentioned that the framework for permitting already listed companies on domestic exchanges to raise capital through GIFT City, currently being developed by the Securities and Exchange Board of India (Sebi), will be ready within two to three months. Nearly 75 broker-dealers are already registered in IFSC, and the authority anticipates more will establish a presence. As of March, there were only three investment bankers registered in the IFSC.

Read previous article on GIFT City Tax Sops Shift FPIs Away from Mauritius, Singapore: What's Driving the Change?

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