How far has GIFT City come, and how do we compare to other centres?
DIPESH SHAH: There has been a long history of financial centers across the world. GIFT is a new centre on the block, but as we have passed five years, let’s talk numbers. We have crossed a thousand registrations in the financial centre, moving from 129 to 1,000 in just three-four years. We have touched $100 billion of banking asset size, which was probably zero; monthly turnover on the exchange has crossed 100 billion now. We are also talking of 35 business segments operating in GIFT, which is not purely a traditional banking, insurance, capital market. We have moved beyond that and have now alternate investment funds, finance companies, fintech firms, and even foreign universities. We have already crossed Abu Dhabi Global Market in terms of the number of banks we have, and we should now see how we can make ourselves comparable to Dubai International Financial Centre, and then probably move towards what Singapore is doing.
What is the outlook on growth and listings in GIFT-IFSC in the coming days?
V Balasubramaniam: GIFT Nifty Futures is something which people can wake up in the morning and watch where the Indian markets are. We trade almost 21.5 hours. So effectively, even for post-market events, people can use it as a benchmark. We are now almost trading on a daily basis almost 2.5x of the total futures volume in India. Today, we have all the Indian derivative products available with us, but we don’t have the Indian equity products. What we are now looking at is actually creating fresh IPO issuances. I can’t give specific names, but at least three or four companies, even those from Silicon Valley, are in touch with us. They are actually looking at filing IPOs, and these are going to be significant ones because we are looking at the sweet spot, where people can raise between $50 and $200 million, because in US markets, typically, issues below $1 billion cannot get an IPO.
You are one of the earliest credit rating agencies to come to GIFT city. What brought you here and what opportunities do you see?
REVATI KASTURE: We started operations in October 2024 by launching ratings on 39 countries. The reason why you need a rating agency from a country like India is because for many years we have seen only the US-based rating agencies dominating the rating market. In the last one year, we have seen in 17 out of those 39 countries, the global rating agencies moving in the direction of our rating, which is a very significant validation of the work. The opportunity is huge. Right now we’ve done about $4 billion worth of issuances, which we have rated in companies. Along with the other players in the ecosystem, we are also doing a significant amount of outreach to countries — firstly the neighbouring countries in Asia, in Africa, where we are proposing a very credible alternative to a DIFC, or SGX.
What is your view on the perception that GIFT City is only for tax saving?
TUSHAR SACHADE: For any new financial service centre, you have to create a pull factor. You can’t expect a financial service centre to be successful without there being a pull factor. While there is an overarching 10-year tax holiday, I don’t think that the government has gone crazy about how the tax incentives are given. You may say that it is a tax incentive. But when you compare in the international market, these are the exemptions available under the tax treaties that India has signed with many countries. So, if you don’t give the similar treatment in IFSC, then what is the reason for these funds to come and set up here? It is not that it is all about taxes. It is all more about creating an ecosystem within the country, creating more jobs within GIFT city.
Is there a case to extend this tax-incentive period?
SACHADE: On the funds, I must say the exemptions which are given are permanent. When you set up a fund, you’re dealing with third-party money, you want to give certainty, so those exemptions are permanent and not subject to a 10-year limit. I think giving longer term certainty to businesses in terms of tax holiday would be important and there is a case for extending it.
Is IFSCA dependent in any way on the domestic regulators?
SHAH: For regulation making, there is no dependency on anyone. IFSCA creates the regulation which goes for public consultation. If an Indian entity wants to come into GIFT to operate, obviously, if they are regulated by the domestic regulator, they need an NOC from the domestic regulator. If a foreign company comes into GIFT, they directly take the IFSCA license and start operations. Also, there are several carve-outs.
KASTURE: If you look at credit rating regulations which IFSCA has come up with, they are not borrowed from the local domestic regulators but are actually aligned more with the international regulations for credit rating agencies. They align with the IOSCO code of conduct. So, there are certain products which are not allowed in the domestic market, like private credit ratings, which are allowed internationally, and are allowed at GIFT City.
On aligning with global jurisdictions, the NSE-IX has aligned in terms of Zero-day expiry.
Balasubramaniam: We are aligning all our regulations with the global jurisdictions. Zero date options have been in existence for the last 10 years, and, in fact, it is a pretty popular product in the US. I think GIFT-IFSC also is one of the early adopters. I think the regulatory framework which IFSCA has adopted is forward-looking, progressive, and in tune with what is the global benchmark. Derivatives are very popularly used by international players on any exposure in India. Sometimes they may not want to do an investment in India, but they can actually take a synthetic bet using derivatives, and that is the reason why the offshore markets have a very large derivatives presence.
Any suggestions or requests for the Union Budget?
SACHADE: Extension of tax holiday. There is a case for it. The second aspect is the whole out-bound fund. There is a specific tax regime for inbound funds. When it comes to outbound funds, in the public market there is no specific tax regime. It faces the same issues that category III AIFs face in the domestic market. Another ask is for a safe harbour regime to facilitate more domestic fund managers to manage global investments.
 "(L-R) Dipesh Shah, Executive Director, IFSCA; V Balasubramaniam, MD & CEO, NSE International Exchange; Revati Kasture, CEO, CareEdge Global IFSC; and Tushar Sachade, Partner, PwC (Photos: Kamlesh Pednekar)")