Author: Himansi G. N, Student of B.B.A. LL. B, St. Joseph’s College of Law, Bengaluru
INTRODUCTION
GIFT City was founded because of India’s desire to recover financial services that were previously provided in offshore jurisdictions such as Singapore and Dubai.
A major strategic initiative, GIFT City is India’s first International Financial Services Centre (IFSC) with the goal of creating a global financial hub. Section 18(1) of the SEZ Act, 2005, designates it as a Special Economic Zone (SEZ), giving it a special legal framework. Any jurisdiction that offers financial services to institutions and non-residents in currencies other than the Indian Rupee (INR) is known as an IFSC. According to the Foreign Exchange Management regulation, an IFSC unit is regarded as a non-resident.
The International Financial Services Centres Authority (IFSCA) governs this. With its attractive incentives, this framework offers a streamlined regulatory environment that draws in foreign investment. These consist of the ability to transact in foreign currencies, the exemption from the Goods and Services Tax (GST) on transactions, and a 100% tax holiday on income for any ten years. These advantages entice multinational corporations to reorganize their international operations in India, utilizing an affordable and legal onshore location to rival well-known offshore financial hubs. Thus, GIFT City is India’s economic diplomacy tool, using alluring financial policies to draw in talent and investment from around the globe.
