Budget 2022: Govt. Announces International Arbitration Centre at GIFT City

Budget 2022: Govt. Announces International Arbitration Centre at GIFT City

SANDEEP KUMAR | Feb 3, 2022 |

Budget 2022: Govt. Announces International Arbitration Centre at GIFT City

 

Budget 2022-23: Govt. Announces International Arbitration Centre at GIFT City

On Tuesday, while presenting Budget 2022-23 to the parliament, Finance Minister Nirmala Sitharaman announced the establishment of an international arbitration Centre at the GIFT City — a planned economic Centre in Gujarat – for the fast resolution of disputes under international jurisprudence.

The city is situated on the banks of the Sabarmati River, which connects the state capital (Ahmedabad) with the political capital (Gandhinagar) of Gujarat, India’s Growth Engine. This international arbitration Centre, according to prior sources, will be similar to the Singapore International Arbitration Centre or the London Commercial Arbitration Centre.

In addition to an arbitration Centre, the government requested that world-class international colleges be established in the GIFT City. The institution will enhance the availability of skilled labor and will be unrestricted in its operations.

The finance minister said, “World-class foreign universities and institutions will be allowed in the GIFT City to offer courses in financial management, fintech, science, technology, engineering and mathematics free from domestic regulations, except those by IFSCA“.

Since the Bharatiya Janata Party took control at the Centre in 2014, the government has included GIFT City in its Union Budget. Foreign investors were comparing GIFT City to the Dubai International Financial Centre (DIFC), which featured the DIFC Court as an added incentive.

GIFT City is an integrated development on 886 acres of land with 62 million square feet of built-up area that comprises office spaces, residential flats, schools, hospitals, hotels, clubs, retail, and numerous recreational facilities, according to the official website. According to the website, “GIFT City is a new Financial & Technology Gateway of India for the World.” It further says that the city has some of the most cutting-edge technologies and the best amenities available to its people.

According to the minister, the GIFT City (Gujarat International Finance Tec-city) will facilitate services for global capital for sustainable and climate finance in the country.

Income from “offshore derivative instruments, or over the counter derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship, and income received from portfolio management services in IFSC shall be exempt from tax, subject to specified conditions,” Sitharaman said in a proposal to amend the Income Tax Act.

GIFT-IFSC is currently India’s first international financial services Centre. Tapan Ray, MD & Group CEO, GIFT City, said, “Today’s announcements reiterate the commitment of the Ministry of Finance towards energizing the regulatory ecosystem at GIFT IFSC which will have a multiplier effect in the country’s economic growth.”

“The setting up of world class universities without any domestic regulation will facilitate skilled manpower in the financial services space. International arbitration Centre will strengthen the dispute resolution mechanism at GIFT IFSC & enhance ease of doing business at GIFT,” he said.

IFSCA has recognized three firms under the Regulatory Sandbox Framework, according to the Ministry of Economic Affairs’ budget paper, including NSE IFSC for trading in chosen US stocks in the form of depository receipts. IFSCA has also decided to formalize a Memorandum of Understanding with T-Hub (Hyderabad) and Fin-Blue Hub (Chennai) for the purpose of encouraging start-ups, according to the statement.

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