'GIFT IFSC may alone provide $1 tn to Indian industry'

The Union Budget presented Friday has given a fillip to GIFT City and the zone alone can help raise USD 1 trillion for the Indian industry, an exchange official said. In her maiden budget, Union Finance Minister Nirmala Sitharaman announced a lot of measures for the country's only International Financial Services Centre (IFSC) operating out of Prime Minister Narendra Modi's home state Gujarat.

"GIFT IFSC alone can provide USD 1 trillion to Indian industry," V Balasubramaniam, the managing director, and chief executive of India International Exchange IFSC (India INX) said in a statement. He said the budget has presented a lot of opportunities for the IFSC, including extending the income tax exemption to 10 years from 5 years, exempting dividend distribution tax (DDT) and permitting aircraft financing and leasing activity.

The city's managing director and group chief executive Tapan Ray said the moves "re-emphasized the importance of GIFT IFSC as an emerging global financial services hub." The proposals will help create jobs in the financial services industry and bring back billions of dollars of business which India has been losing to other competing global financial hubs, he added. Tax exemptions to 'AIF-Cat 3' funds operating in GIFT City are now at par with that of non-residents, Dhruva Advisors' partner Vishal Gada said.

Gada also noted down other measures including Exemption to foreign lenders earning interest income from IFSC units and rationalization of DDT exemption to cover even dividend payouts from past reserves as welcome moves. The Gujarat Government-promoted GIFT City began operations in the capital of Gandhinagar, despite the financial activities being concentrated in Mumbai.