Finance beyond geography
||20th November 2017
Gujarat GIFT City has made a good beginning. Yet, some changes are needed to create a successful international financial service centre in India
Traditionally, finance has been ‘global’ in character. Over the centuries, frequent changes of regimes, combined with evolution of administrative systems, have restricted free movement of capital and discouraged free markets. With the passage of time, free trade almost became imaginary.
Financial integration among industrialised nations was fast-tracked in the last two decades of the 20th century with the rise of international financial services (IFS) that are mainly available in specialised markets known as international financial centres (IFC), which cater to customers outside their own jurisdiction. In recent times, Dubai and Singapore have become major centres for international financial transactions and are fast emerging as global financial centres. Modern-day IFCs are driven by various factors, such as rapid innovations in financial products and services, structures and arrangements to accommodate as well as manage myriad requirements and risks, while pursuing the quest for cost reduction.
The setting up of the international financial services centre (IFSC) at the Gujarat International Finance Tec (GIFT) City in 2015 has been a shot in the arm for India’s growing international trade initiatives. The IFSC-GIFT is set up as a multi-services special economic zone (SEZ) in accordance with the SEZ Act 2005 read with the SEZ Rules 2006. Sections 18 and 55 of the Act have made provisions for the establishment of an IFSC within an SEZ in India and enabled the central government to regulate IFSC activities.
The IFSC-GIFT has been designated as a &lsquo...