Ifsca eyes independent arbitration centre to boost GIFT City's appeal

The proposed centre aims to strengthen dispute resolution, enhance investor confidence and help position GIFT City as a leading international financial services hub

The International Financial Services Centres Authority (Ifsca) plans to set up an independent arbitration centre in GIFT City to improve the ease of doing business and strengthen dispute resolution in India's flagship global financial services hub, according to a government official.

 

“This is the biggest reform that Ifsca is working on and is a key requirement for GIFT City's success as an international financial centre,” the official said, requesting anonymity, adding that the proposal is currently under the government's consideration.

 

The official said an expert committee has already been constituted to look into the matter and that the government is actively pursuing the creation of the arbitration centre. According to the official, the lack of an independent arbitration centre is a key demand of reinsurers located in GIFT City.

 

 

Currently, businesses operating out of GIFT City must approach commercial courts for dispute resolution, the official said. The creation of an independent dispute resolution mechanism within GIFT City is likely to improve the ease of doing business.

 

Narendra Kumar Bharindwal, president of the Insurance Brokers Association of India (IBAI), said that compared with the Dubai International Financial Centre (DIFC) and Singapore, GIFT City has no independent arbitration centre. “The move is likely an attempt to position GIFT City as a competitive rival to major global financial hubs such as Dubai and Hong Kong. Such an institution will be crucial for GIFT City's success as an international financial hub,” he added.

 

The Gujarat International Finance Tec-City, known as GIFT City, houses India's only International Financial Services Centre. Regulated by the Ifsca, it was set up to attract global financial services and bring offshore financial activities to India.

 

As per existing data, the official said, Ifsca estimates that more than 50 global reinsurers could establish a presence in GIFT City over the next two years. 

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