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Regulations for GIFT City SEZ next month

Will be comparable to any of the other international finance centre like Singapore and Dubai, FM Jaitley said in his speech

BS Reporter  |  Mumbai 

Arun Jaitley

Stock exchanges and other foreign financial institutions waiting for tax-sops for the special economic zone (SEZ) in in Gujarat will have to wait a bit longer. Finance Minister during the presentation said that the regulations for the International Finance Centre (IFC) in in Gujarat will be announced in March this year.

"The regulations for the first phase of the will be announced in March this year," said Jaitley presenting the second of the Narendra Modi-led BJP government on Saturday. GIFT 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 at would be comparable to any of the other international finance centre like Singapore and Dubai, FM Jaitley said in his speech.
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Both the and the National Stock Exchange had independently signed a Memorandum of Undertsanding (MoU) with 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 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 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 where the proposed exchanges are to be set-up.

""The 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 Brokers' Forum had said after had signed the with

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 and enjoy lower taxes appropriated to SEZs, industry players said.

The domestic portion of the at will, among other things, house a 3-lakh square feet commercial tower for the back-office operations of the 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 website, the will also include facilities like World Trade Centre, educational institutes, health centre, communication and entertainment hubs and distribution facilities.

First Published: Sat, February 28 2015. 13:36 IST
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