Finance Minister Nirmala Sitharaman made a series of announcements in the Union Budget 2023 speech on Wednesday to promote business activities in Gujarat International Finance Tec-City’s (GIFT City) International Financial Services Centre (IFSC).
The minister first stated that the government will be facilitating the construction of data embassies in order to ensure data continuity for foreign nations. GIFT City has been “envisioned as the embodiment of Aatmanirbhar Bharat, a hub of ingenuity and innovation”, according to the Economic Survey 2022-2023.
“For countries looking for digital continuity solutions, we will facilitate setting up their data embassies in the IFSC GIFT,” Sitharaman said.
Sitharaman also announced that the International Financial Services Centres Authority (IFSCA) will now have the delegated power under the SEZ Act. This will be done in order to “avoid dual regulation”.
The government will also be amending the IFSCA Act for statutory provisions for arbitration and ancillary services. The new amendments will also recognise offshore derivative instruments as valid contracts.
The IFSCA was created in 2019 as a single window regulatory body that would take over the roles and responsibilities of the four domestic sector regulators – the Reserve Bank of India (RBI), the Securities Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority of India (PFRDA) – in the IFSC.
In her speech, Sitharaman also indicated that amendments will be brought so that acquisition financing by IFSC banking units and foreign banks will be permitted in the future. She added that the government has also approved the creation of a subsidiary of EXIM bank for trade refinancing.
In order to improve the ease of doing business, a single window IT portal will be created to get necessary registrations and approval from GIFT authorities like IFSCA, SEZ authorities, GSTN, RBI, SEBI, and IRDAI.
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