Finance Minister Nirmala Sitharaman announced the establishment of an international arbitration centre at GIFT City to help facilitate dispute resolution.
In addition to an arbitration centre, the government proposed establishing world-class foreign universities in GIFT City.
The university will facilitate availability of trained manpower and will be free from any sort of regulation.
The Centre could be structured similarly to Singapore’s International Arbitration Centre or London’s Commercial Arbitration Centre.
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, the GIFT City (Gujarat International Finance Tec-city) will facilitate services for global capital for sustainable and climate finance in the country.
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 in India that is responsible for the development and regulation of financial products, financial services, and financial institutions in the IFSC.