 "Regulations for GIFT City SEZ next month")
"The regulations for the first phase of the GIFT City will be announced in March this year," said Jaitley presenting the second budget of the Narendra Modi-led BJP government on Saturday. GIFT SEZ is an equal joint venture between the Gujarat government undertaking Gujarat Urban Development Company and IL&FS. It is a central business district located between Ahmedabad and Gandhinagar.
The IFC at GIFT City would be comparable to any of the other international finance centre like Singapore and Dubai, FM Jaitley said in his speech.
Both the BSE and the National Stock Exchange had independently signed a Memorandum of Undertsanding (MoU) with GIFT City for setting up an international stock exchange. The aim of the exchange is to provide trading and settlement facilities for all types of securities for both foreign investors and domestic investors. Exchange officials said that the hope was to bring the international market for India-related rupee and index products onshore.
As per a statement released by BSE at the time of signing the MoU, India has lost about 50 per cent market share to this offshore market of derivatives products based on the Indian rupee and other index-based products. The total size of the trading volume for these products is estimated at over $100 billion per day, the statement said.
While the MoU was signed, exchange officials had made it clear that any further ground-work would be contingent to additional tax benefits being announced for the international portion of the SEZ where the proposed exchanges are to be set-up.
""The MoU has been signed based on the expectation that the exchange will get all the benefits of being a 'deemed foreign territory'. The tax benefits are not applicable as of now but they are expected to be available soon," Alok Churiwala, vice-chairman of BSE Brokers' Forum had said after BSE had signed the MoU with Gift City.
Once the tax benefits are made available, the exchange would then be able to act as an international trading centre for both foreign investors looking to invest in India and domestic investors wishing to invest outside India. Fund managers currently located at international business centres like Dubai, Hong Kong and Singapore and investing into India would be able to relocate to GIFT City and enjoy lower taxes appropriated to SEZs, industry players said.
The domestic portion of the SEZ at Gift City will, among other things, house a 3-lakh square feet commercial tower for the back-office operations of the BSE Brokers' Forum. The forum, whose members hold 40 per cent equity in the BSE, is expected to invest about Rs 120 crore for the development of this tower.
Leading lenders like State Bank of India, Bank of Baroda, Bank of India, Syndicate Bank, Corporation Bank, HDFC Bank, among others have already been allotted space in GIFT City, which is being developed as an integrated smart City.
As per the GIFT City website, the SEZ will also include facilities like World Trade Centre, educational institutes, health centre, communication and entertainment hubs and distribution facilities.