Economic Survey 2023-24 : GIFT City IFSC emerging as dominant gateway for global capital inflows

NEW DELHI : The Economic Survey tabled by the Union Finance Minister Smt Nirmala Sitharaman said that the GIFT City IFSC is envisaged to be a unique international financial jurisdiction located inside onshore India, set up with a dual objective of onshoring India centric international financial services business as well as serving as a preferred gateway for channelising global capital flows into and out of the country.

Additionally, among several business sectors in the city, the banking ecosystem is rapidly evolving with a healthy mix of foreign and domestic banks, primarily catering to the foreign currency borrowing requirements of Indian corporates and public sector enterprises through external commercial borrowing, trade finance, etc., the survey added.

“Transactions under these heads, previously booked from foreign financial centres such as Singapore, Dubai, Hong Kong, etc., are now being booked out of GIFT IFSC,” it said.

As of March 2024, the total asset size of IFSC Banking Units (IBUs) crossed $60 billion, and the cumulative value of transactions undertaken by IBUs crossed $795 billion.

The survey also showed that the robust funds industry in GIFT IFSC has a transformative impact in catalysing global capital inflows into India, including the start-up ecosystem. “In the last three years, there has been rapid growth in Fund Management Entities (FMEs) and AIFs registered with IFSCA. As of March 2024, the cumulative FMEs and funds registered rose from 39 and 33 as of September 2022 to 114 and 120, respectively, as of March 2024,” the survey showed.

The IFSC, being an offshore jurisdiction, is also uniquely positioned to become an ‘international higher education hub’ by attracting top quality global universities keenly exploring India due to its tale.