GIFT CITY – ECONOMY
News: Gujarat
govt engages with over 1,000 companies to showcase GIFT City’s potential to
global investors
What's in the news?
● Ahead
of the Vibrant Gujarat Global Summit, Gandhinagar-based Gujarat International
Finance Tec-City (GIFT City) has become a focus area with the state government
promoting it as a key investment destination by engaging with over 1,000
companies to organise road shows and delegation visits, officials said.
● Spread
over 886 acres of area, GIFT City is India’s first operational smart city with
infrastructure for international banking, insurance and capital markets.
● It
has a committed investment of USD 1.57 billion, and a workforce of 10,000
professionals.
Key takeaways:
● The
upcoming Vibrant Gujarat Global Summit
(VGGS), to be held in Gandhinagar between January 10 and 12, 2024, has made
GIFT City an important focus area with international companies from countries
like UAE, Japan, Australia, Singapore, and the USA expressing interest towards
exploring investment opportunities in the GIFT International Financial Services
Centre (GIFT IFSC).
GIFT (Gujarat International Finance Tec-City):
● It
is located in Gandhinagar is India’s
first International Financial Services Centre.
International Financial Service Centre (IFSC):
● An
IFSC enables bringing back the financial services and transactions that are
currently carried out in offshore
financial centres by Indian corporate entities and overseas
branches/subsidiaries of Financial Institutions (such as banks, insurance
companies, etc.) to India.
● It
offers a business and regulatory environment that is comparable to other
leading international financial centres in the world like London and Singapore.
● IFSCs
are intended to provide Indian
corporates with easier access to global financial markets and to complement
and promote further development of financial markets in India.
Functions:
● The
authority will regulate financial
products such as securities, deposits or contracts of insurance, financial
services, and financial institutions which have been previously approved by any
appropriate regulator such as Reserve Bank of India (RBI), the Securities and
Exchange Board of India (SEBI) etc., in an IFSC.
● It
will also regulate any other financial products, financial services, or
financial institutions in an IFSC, which may be notified by the central
government.
● It
may also recommend to the central government any other financial products,
financial services, or financial institutions, which may be permitted in an
IFSC.
Members:
● The
International Financial Services Centres Authority will consist of nine members, appointed by the central government.
● They
will include chairperson of the authority, a member each from the RBI, SEBI, the Insurance Regulatory and
Development Authority of India (IRDAI),
and the Pension Fund Regulatory and Development Authority (PFRDA); and two members from the Ministry of Finance. In addition, two other members will be
appointed on the recommendation of a Selection Committee.
● All
members of the IFSC Authority will have a term of three years, subject to
reappointment.
Significance:
● The
banking, capital markets and insurance sectors in IFSC which are regulated by
multiple regulators – the RBI, SEBI, and IRDAI will be unified under the IFSC
authority.
● The
single window regulatory institution would accelerate the development of
India’s first IFSC at GIFT City, Gandhinagar.
● Both
national and international institutions dealing with international financial
services would utilize the IFSC platform for inbound and outbound investments
with improved ease of doing business, thereby making GIFT IFSC a global
financial hub.