Making India a global economic powerhouse requires a platform which provides the Indian BFSI sector with a level playing field to compete on the global markets with international players. The India’s first designated International Finance Services Centre (IFSC) ‘Hiranandani Signature’ is first fully developed and operational commercial tower in GIFT SEZ. As per the latest edition of Global financial Centres Index (GFCI) released recently in London, GIFT city was placed as the third among 15 IFSCs that are likely to become more significant emerging IFSC in the world.
In the light of new guidelines for Alternative Investment Funds (AIFs), the regulatory body Securities and Exchange Board of India (SEBI) has issued new norms, which combine foreign direct investment (FDI), foreign portfolio investor (FPI) and foreign venture capital investor (FVCI) regimes for investors from abroad. This new framework will allow Indian managers to directly sponsor and manage offshore Alternative Investment Funds (AIFs) set up at GIFT IFSC. These could potentially be an India managed platform where a single pool of capital is raised from global investors including Indian residents and invested globally. Hence, the step will effectively ease the multi-licence framework that works for existing foreign funds today.
GIFT IFSC is a ‘work in progress’ story, which now needs fast pace development to be globally on par with other international IFSCs. The dream project of Hon’ble PMO Shri Narendra Modiaims to empower Indian BFSI and enable it to compete with global players without need to set up an office at global finance centres like Dubai, Singapore or London. There lies a huge growth potential which quickly needs to transforminto reality.
The new guidelines for AIFs will not only provide an impetus but also thrust by elevating GIFT IFSC with world class infrastructure, connectivity, people and technology on a single platform for businesses across the world.A detailed guideline by the markets regulator SEBI on AIFs is a step in the right direction which will help to generate more employment and effectively make business operational on a larger scale.
According to media reports, fund managers managing foreign investors’ money would benefit from incentives granted to units operating in GIFT IFSC in the form of no GST and reduced income tax on management fees earned by them. This constitutes significant encouragement to bring offshore funds managed by Indian fund managers onshore in GIFT City. Moreover, the report suggests that a fourth of India-focused funds based in Singapore and Mauritius could potentially migrate to the GIFT IFSC.
Recently, Chief Minister of Gujarat, Vijay Rupani conducted a road show in Mumbai, to invite businessmen and corporates to participate in Vibrant Gujarat Global Summit 2019.There was expression of interest to take more effective steps and efforts to enhance its operation base to raise quantum of business generated at GIFT IFSC. Topics relevant to economic development and business growth in Gujarat, some with national ramifications and others with global impact were discussed on the sidelines of the roadshow.
[This is an authored article by Dr Niranjan Hiranandani- CMD- Hiranandani Communities. All views, opinions and expressions are personal and limited to the author.]