In a significant move to bolster GIFT city in Gujarat as a thriving financial hub, Finance Minister Nirmala Sitharaman announced on Friday (July 28) that Indian companies can now list directly on IFSC (International Financial Services Centre) exchanges. This decision allows companies to register on IFSC exchanges, even if they are not listed on any exchanges within the country.
Access to Global Capital and Improved Valuations for Indian Companies
During the launch of the Corporate Debt Market Development Fund (CDMDF) in Mumbai, Minister Sitharaman emphasized the benefits of this decision. She stated that it will facilitate easier access to global capital for Indian companies and lead to enhanced valuations.
Indian Financial Market Ecosystem Praised for Technological Advancements
Minister Sitharaman praised the Indian financial market ecosystem. Hailing it as one of the best globally in terms of technology and the value and volume of business transactions. She highlighted the Indian capital markets’ efficiency, including speedy settlement of trades and strong risk mitigation and governance measures.
Growth and Interest in GIFT City
In 2019, GIFT City received permission to host India’s first IFSC. The government developed it under the Special Economic Zones Act of 2005. The city includes two zones: the GIFT SEZ (non-IFSC area) and the GIFT IFSC. Global companies and funds have shown significant interest in GIFT City due to the government’s active promotion.
GIFT City IFSC’s Impact on Global Financial Landscape
GIFT IFSC’s emergence caused significant disruption in the global financial landscape. Major companies, including Google, showed interest in setting up operations in GIFT City. Countries like Singapore and Mauritius inquired about measures to retain private equity (PE) investors and prevent them from shifting to GIFT IFSC. In her 2023-24 Budget speech, Minister Sitharaman announced plans to establish data embassies in GIFT IFSC. The data embassies will offer supportive legal, regulatory, and robust digital infrastructure to countries seeking digital continuity solutions.
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