Following the Budget 2022- 23 proposal of letting foreign universities set up their centres at the Gandhinagar-based GIFT City International Financial Services Centres (IFSC), some prominent foreign universities have begun a dialogue with the authorities. These universities, however, will not be subject to domestic regulation but only that stipulated by the International Financial Services Centres Authority (IFSCA). The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the IFSC in India.
London Business School, King’s College in London, the University of Cambridge, and New York University are reportedly discussing the possibilities of setting up an International Branch Campus in IFCS.
GIFT is the acronym of Gujarat International Finance Tec-City, according to a Government website. Spread over 886 acres of land, it has 62 mn sq. ft. of built-up area, which includes office spaces, residential apartments, schools, a hospital, hotels, clubs, retail and various recreational facilities.
In her Budget speech, Finance Minister Nirmala Sitharaman had 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 to facilitate the availability of high-end human resources for financial services and technology.” This, she added, will facilitate the availability of high-end human resources for financial services and technology. For this purpose, she offered tax exemptions on income, royalty, interest, etc.
The exemptions, however, will be subject to a specified condition. “The exemption of income tax would promote various business activities such as ship leasing and financing, offshore fund management and offshore banking activities in GIFT IFSC,” Tapan Ray, MD and Group CEO, GIFT City, told PTI.
He, further, said that the Union Budget announcements reiterate the commitment of the Ministry of Finance towards energising the regulatory ecosystem at GIFT IFSC (International Financial Services Centre), which will have a huge multiplier effect on 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 and enhance ease of doing business at GIFT,” he added.
Another expert, Manoj Purohit, Partner & Leader, Financial Services Tax, BDO India, told the news agency that the proposal to allow the setting up of world-class financial institutions and universities free from domestic regulations under IFSCA will give a boost to human resources development and expansion in GIFT IFSC. The FM also announced an arbitration centre: “An international arbitration centre will be set up in the GIFT City for timely settlement of disputes under international jurisprudence. Services for global capital for sustainable & climate finance in the country will be facilitated in the GIFT City.”
The arbitration centre, along with foreign universities, is expected to help popularise GIFT City, which is emerging as a global financial and IT services hub, a first of its kind in India.