IFSCA forms committee to onshore Indian innovation to GIFT IFSC

International Financial Services Centre Authority (IFSCA) has formed a committee to onshore the Indian innovation to GIFT International Financial Services Centre (IFSA) to better understand the nuances from regulatory, tax, legal and other perspectives and identify measures required to make in India, a government release said. 

The committee will be chaired by G. Padmanabhan, former Executive Director, Reserve Bank of India. The committee includes representatives from leading venture capital funds, Startups, fintechs, law firms, tax firms and other domain experts. 

The terms of reference for the committee include measures required to encourage the Indian fintech and startups domiciled abroad to relocate to GIFT IFSC. 

The committee would identify issues that are critical to the development of GIFT IFSC as a global Fintech Hub. It would also suggest measures to encourage new fintech companies having global outlook to setup their commercial presence in the GIFT IFSC. Additionally, the committee would also identify challenges and recommend measures to develop international innovation hub at GIFT IFSC. 

The advisory committee is expected to submit its recommendations to IFSCA within three months, according to the release. 

The startup ecosystem in India is third largest startup ecosystem in the world, boasting an impressive 115 unicorns, which are billion-dollar enterprises. In 2021, Indian startups raised $44 billion, with over $33 billion going towards deals worth more than $5 million. Many Indian startups are domiciled outside India, despite having the majority of their market, personnel and founders in India. These “externalized” or “flipped” startups constitute a large number of India’s unicorns. 

GIFT IFSC is a multi-services special economic zone with 105 hectors of land. At present, the GIFT IFSC is the maiden international financial services centre in India. The government operationalised IFSC at GIFT Multi Services SEZ in April 2015. 

In the 2023-24, the government proposed an extension of tax benefits to funds relocating to IFSC, GIFT City till March 31, 2025. “For countries looking for digital continuity solutions, we will facilitate setting up of their Data Embassies in GIFT IFSC,” Finance Minister Nirmala Sitharaman said during her Budget speech.

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