Budget announces host of measures to enhance business in IFSC

Units of foreign banks located in the International Financial Services Centre or GIFT City are permitted to fund acquisition of companies or assets by Indian companies, but that may be restricted only to overseas assets. Currently, overseas takeovers are funded by the overseas branches of foreign banks and not those located in the GIFT City.

"Permitting acquisition financing by units of foreign banks in IFSC is a step in the right direction and would help in reducing the cost of financing outbound M&A, thereby supporting Indian corporates looking to do overseas acquisitions," said Samir Sheth, partner and head - deal advisory services, BDO India.

The budget has also allowed delegated powers under the SEZ act to IFSCA and set up a single window registration for GSTN functions, improving the ease of doing business and avoiding dual regulation. The establishment of an Exim Bank subsidiary would encourage emerging sectors such as aircraft and ship financing activities in GIFT City.


"The policy support laid out by the government will act as a catalyst in expediting the growth of GIFT City, thus making it a vibrant global financial hub for domestic and international entities," said Tapan Ray, MD, GIFT City.

"The far-reaching measures announced will go a long way in strengthening the ease of doing business in IFSC at GIFT City."