How hiccups in P-note GIFT plan could impact wide-scale adoption

Use of the instrument has been falling over time

A budget boost to the issuance of specialised instruments for foreign investors issued from the International Financial Services Centre (IFSC) faces some snags that may affect wide-scale adoption.

The budget proposed to give a tax exemption on income from participatory notes (P-notes) that were issued from international financial services centres such as the Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC) at Gandhinagar. Foreign investors use this instrument to invest in Indian markets even without direct registration.

“Taking forward our efforts to further promote the IFSC, I hereby propose to provide that income of a non-resident from offshore