GIFT IFSC

Landing Pad for Foreign FinTechs, TechFins and Accelerators to India Market

November 15, 2023

Vision of the Prime Minister for GIFT IFSC
1
“The vision of India's future is associated with the GIFT City”

“GIFT City is an important gateway to connect India with global

opportunities. When you integrate with GIFT City, you will
integrate with the whole world."

2
"IFSCA will not only become an enabler but will also support
innovation and will also act as a catalyst for growth
opportunities."

Hon’ble Prime Minister at GIFT IFSC

29th July 2022 2
GIFT CITY – Overview

A Global Financial & IT

Hub
with a Domestic Tariff
Area & a Multi Services
SEZ

A Vertical City GIFT SEZ- Notified as

India’s 1st International
1st of its kind in the Financial Services
country in scale, scope & Centre (IFSC)
quality

A Greenfield Smart City

Employment
opportunities for 1
with State-of-the-Art
Million workforce
Infrastructure

3 3
 GIFT CITY: Structure

GIFT CITY

1. Domestic Tariff Area 2. Multi-Service Special

Caters to Domestic Economic Zone (SEZ)
Economy Export Oriented
IT & Finance Hub

Notified as India’s 1st

International Financial Export of IT & Other
Services Centre (IFSC) Services

4
 INTERNATIONAL FINANCIAL SERVICES
CENTRES AUTHORITY

1 IFSCA has been established as a unified financial regulator by the Government of India under
the IFSCA Act, 2019

The Authority is mandated to develop and regulate Financial Institutions, Financial Services
2 and Financial Products in the International Financial Services Centre (IFSC) in India

To develop and regulate IFSC’s in India, IFSCA has been vested with powers of four sectoral
3 regulators namely- RBI*, SEBI*, IRDAI* & PFRDA*

*RBI- Reserve Bank of India, *SEBI- Securities and Exchange Board of India, *IRDAI- Insurance Regulatory and Development Authority & *PFRDA- Pension5
Fund Regulatory and Development Authority
 Journey of GIFT IFSC

The latest Global Financial Centers Index, London Report (March 2023) puts GIFT City amongst 15 centers globally,
which are likely to become more significant over the next 2 to 3 years

1st commercial building Union Parliament passes IFSCA notifies 30 +

inaugurated in GIFT City IFSCA Act, 2019 Regulations /Frameworks

Jan. 2013 April 2015 Dec. 2019 Oct. 2020 July 2023

IFSC becomes operational with IFSCA assumes power to

RBI, SEBI and IRDAI notifying develop and regulate IFSCs
enabling regulations in India

GFCI FinTech Ranking for GIFT City : 76 (2022) -> 58 (2023) 6

India’s International Finanical Services Centre (IFSC): Key Features

Dedicated & Unified

Full-fledged financial ecosystem
Financial Regulator
with global connects
(IFSCA)

Separate Financial GIFT Best-in-class regulations

Jurisdiction within India International (Internationally Aligned)
(Full Convertibility) Financial
. Services Centre

Sovereign support, including

Competitive Tax Regime special carve outs from domestic
laws

7
Overview - IFSC
BUSINESS ACTIVITIES

BANKS CAPITAL MARKET ASSET MANAGEMENT

●Indian Banks ●Stock Exchanges ●Alternate Investment Fund
●Foreign Banks ●Clearing Corporation ●Investment Advisers
●Depository ●Wealth Management
●Broker Dealer ●Portfolio Manager
●Custodial Services

INSURANCE
●Indian Insurer OTHER FINANCIAL EMERGING ACTIVITIES
●Indian Reinsurer INSTITUTIONS ● Global FinTech Hub
●Indian Broker ● Finance Company ● Global in-House Centres
●Foreign Insurer ● Global Corporate Treasury Centre ● International Bullion Exchange
●Foreign Reinsurer ● International Trade Finance ● Aircraft Leasing & Financing
●Insurance Web-Aggregators Services Platform ● Ship Leasing & Financing
● Sustainable Finance
● Ancillary Services 8
New Regulatory Architecture
IFSC Regulations Benchmarked with International Best Practices

Issuance and Listing Finance Company

Banking Regulations Bullion Exchange Global In-House FinTech Entity
of Securities Regulations, 2021
2020 Regulations 2020 Regulations 2020 Framework 2022
Regulations, 2021

Market Framework for

Framework for Capital Market
Infrastructure Framework for Global Corporate Fund Management
Ancillary Services Intermediaries
Institutions Aircraft Lease 2022 Treasury Centres (Regulations) 2022
2021 Regulations 2021
Regulations 2021 2021

Setting up and Framework for

Registration of Insurance Framework for Ship Global AML, CFT and KYC
Operations of
Insurance Business Intermediary Lease 2022 Administrative Guidelines 2022
Foreign University
Regulations 2021 Regulations 2021 Office 2022
Regulations 2022

Insurance Products Manner of Payment Investment by IFSC Maintenance of

and Receipt of Appointed Actuary Re-Insurance
and Pricing Insurance Office Insurance Records Regulations 2023
Regulations 2022 Premium Regulations 2022 Regulations 2022 Regulations 2022
Regulations 2022
9
COMPETITIVE TAX REGIME
Overview - IFSC
●100% Tax Exemption (for 10 out of 15 years)

●Minimum Alternate Tax* @ 9%

●No CTT**/STT**/GST**/Stamp Duty

●Withholding tax @9% on interest paid on bonds listed

on IFSC exchanges

●Competitive Tax Regime for Funds, Aircraft leasing

etc.

●Incentives under Gujarat IT/ITes Policy

(2022-27)

* MAT provisions not applicable for companies opting for concessional tax rate
under Sec. 115 BAA of Income Tax Act, 1961
**CTT- Commodity Transaction Tax, STT- Securities Transaction Tax, GST-
Goods and Service Tax 10
 Momentum @ GIFT IFSC
Upto Sept. 2020 Upto September Growth in Last 6
2023 Months

1. IFSCA Registered Entities* 129 571 172

I. Banking

2. Number of Banks 14 25 3

3. Total Banking Asset Size $ 14 Bn $ 46.59 Bn $ 11.77 Bn

4. Total Banking Transactions $ 53 Bn $ 564.6 Bn $ 191.9 Bn

5. Total Derivative Transactions (Inc. NDF) $ 65 Bn $ 674.6 Bn $ 171.6 Bn

11
* All entities registered, licensed, authorized and notified by IFSC
 Momentum @ GIFT IFSC
Upto Sept. 2020 Upto September Growth in Last 6
2023 Months
II. Capital Markets
6. Monthly Turnover on IFSC $ 21.7 Bn $ 67.38 Bn $ 32.78 Bn*
Exchanges
7. Cumulative Debt Listing on $ 23 Bn $ 52.7 Bn $ 3.0 Bn
Exchanges
8. Green/ESG/Sustainable Debt Listing $ 2.1 Bn $ 10.1 Bn $ 0.9 Bn

III. Fund Management

9. Fund Management Entities NA 78 FMEs 37 FMEs
10. Funds/Schemes Launched NA 68 Funds 30 Funds
11. Total Commitment to Funds NA $ 19.06 Bn $ 6.8 Bn
12
*Arrived from monthly turnover data from Jan. and July 2023
 Momentum @ GIFT IFSC
Upto Sept. 2020 Upto September Growth in Last 6
IV. Insurance 2023 Months

12. Number of Insurance Firms & Brokers 17 28 04

13. Re(insurance) Gross Premium booked by
$ 45 Mn $ 239 Mn $ 51 Mn
Insurance Firms (IIOs)*

14. Re(insurance) Premium transacted $ 158 Mn $ 720.25 Mn $ 58.25

by Intermediaries (IIIOs)* Mn
V. Aircraft & Ship Leasing
15. Registered Aircraft Lessors NA 23 05

16. Registered Ship Lessors NA 8 05

17. Total Aviation Assets Leased** NA 122 96

13
* Insurance data upto June 2023 ** Including Aircrafts (15), Engines (61) and Ground Support Equipment
 Momentum @ GIFT IFSC
Upto Sept. 2020 Upto September Growth in Last 6
VI. FinTech 2023 Months

18. Number of FinTechs Registered* NA 45 14

19. FinTechs approved under Incentive NA 05 05

Scheme
20. Number of Hackathons Completed/
launched NA 08/10 01/03
VII. Bullion Exchange
21. Qualified Suppliers NA 19 07

22. Qualified Jewellers NA 102 23

23. Quantity of Bullion Traded on IIBX NA 2390.4 Kgs 1907.4 Kgs

14
* Includes sandbox approvals for 4 ITFS platforms and Unsponsored DR’s of American Stock and Terazo
 Momentum @ GIFT IFSC
Upto Sept. 2020 Upto September Growth in Last 6
2023 Months
VIII – XII Other Key Segments

24. Number of GICs NA 03 0

25. Number of Ancillary Firms NA 54 13

26. Foreign Universities NA 02 02

27. Finance Company (Core) NA 06 05

28. ITFS Platforms NA 03 1 (successful exit)

15
FinTech Ecosystem @ GIFT IFSC

16
India FinTech Story = Social, Financial and Economic Inclusion

17
FinTech @ GIFT IFSC – Business Use Case

Landing Pad for Foreign FinTechs -to explore India market

 FinTech Bridges with Domestic Regulators through IoRS

GIFT IFSC as a Market

Launch Pad for Domestic FinTechs - to go global

 FinTech Bridges with Overseas Regulators

18
FinTech Entity (FE) Regulatory Framework

Unique Regulatory Framework for FinTechs and TechFins

Issuance of Authorization (Direct Entry) for mature Firms

Issuance of Limited Use Authorization for Sandbox Entry

19
FinTechs (Vertical Specific)

Provide a financial technology

(FinTech) solution which results in
new business models, applications,
process, or products in financial
services regulated by the Authority

20
TechFins (Horizontal)
Provide an advanced or emerging
technology solution in allied
areas/activities which aid and assist
activities in relation to financial Solution/Services for BFSI Domain Leveraging
products, financial services and
financial institutions (TechFin)
 Artificial Intelligence/Machine Learning/
• Big Data
• Biometrics
• Chatbots
• Cyber security
• Digital Identity/KYC/AML/CFT
• Distributed Ledger Technology
• Fraud detection/prevention
• Internet of Things (IoT)
• Longevity Finance
• Metaverse including Augmented Reality and /or Virtual Reality
• Quantum Tech 21
• Web 3.0
F E Framework – Authorization (Direct Entry)
Eligibility for Applicant

• Indian applicant:
⎻ An entity registered with DPIIT as start-up related to FinTech; or
⎻ A company or LLP incorporated in India; or
⎻ Branch of Company/ LLP in IFSC; or
⎻ An entity working directly or indirectly in the ecosystem regulated by RBI / SEBI/ IRDAI/ PFRDA
• Foreign applicant - entity from FATF compliant jurisdiction

Mandatory Requirements for Applicant

• use technology in the core product or service, business model, distribution model or methodology; or
• have presence of deployable solution/working product; and
• have Revenue earning track record in at least 1 of the last 3 financial years

On Authorization, the applicant needs to setup as a new Company/ LLP or as a subsidiary or branch of its parent
22
F E Framework – Limited Use Authorization (Sandbox)
Eligibility for Applicant

• Indian applicant:
⎻ An entity registered with DPIIT as start-up related to FinTech; or
⎻ A company or LLP incorporated in India; or
⎻ Branch of Company/ LLP in IFSC; or
⎻ An entity working directly or indirectly in the ecosystem regulated by RBI / SEBI/ IRDAI/ PFRDA
• Foreign applicant - entity from FATF compliant jurisdiction

Mandatory Requirements for Applicant

• use technology in the core product or service, business model, distribution model or methodology;

There is NO requirement to
a) set up office at GIFT* b) have a deployable solution/working product and c) revenue earning track record of at least 1 year
* Need to setup office if bank account is required to be opened in IFSC

23
FFinTech Sandbox
E Framework – Limited -Use
Overview
Authorization (Sandbox)

IFSCA FinTech Innovation Sandbox IFSCA FinTech Regulatory Sandbox

FinTech
Sandboxes
Limited Use
Authorization

Inter-operable Regulatory Sandbox (IoRS) with Overseas Regulatory Referral Mechanism Sandbox
IFSCA as Principal Regulator

There is NO requirement to
a) set up office at GIFT* b) have a deployable solution/working product and c) revenue earning track record of at least 1 year
* Need to setup office if bank account is required to be opened in IFSC
24
24
Inter-operable Regulatory Sandbox (IoRS)

 IoRS is a mechanism to facilitate testing of innovative hybrid financial products/services falling within
the regulatory ambit of more than one financial sector regulator in India.

 Standard Operating Procedure (SOP) and Application form for IoRS placed simultaneously on websites
of IFSCA and other financial sector regulators (RBI, SEBI, IRDAI & PFRDA) on Oct 12, 2022.

Applica
Applica
tions
tions • IFSCA as the Principal from
from
Regulator for all such Indian
Foreign
applications FinTec
FinTec
hs
hs
• Regulatory Sandbox Framework having
seeking
of IFSCA to be Applicable global
entry to
ambitio
India
n

25
FinTechs and TechFins – Application Domains

Application Domains* Top 3 - Application Domains*

1. Agri Tech
2. Alternative Trading Platforms
3. Artificial Intelligence/ Machine Learning 12% Remittances and Payments
14%
4. Climate/ Green/ Sustainable Tech Artificial Intelligence and Machine Learning

5. Digital Identity/ KYC/ AML/ CFT 13% RegTech (includes KYC/AML/CFT)

6. Distributed Ledger Technology

7. Fraud Detection/ Prevention
8. InsurTech
9. Quantum Tech Jurisdictions*
10. RegTech
11. Remittances and Payments
India USA Sweden France
12. Robo Advisory
13. Space Tech Mauritius Singapore Australia UK

14. Technology Solution Aiding Trade Finance

Taiwan Switzerland Netherlands Canada
15. Technology Solution Supporting Digital Banking
UAE
16. Wealth Tech
17. Accelerators
*Under FE Framework ending Q2 FY23-24 26
Emerging Trends at GIFT IFSC

Tokenization Quantum Tech GreenTech Blockchain SpaceTech

• L1 • Space Situational
• Carbon Credit
• Bonds • Post Quantum • Smart Awareness
Alternative
• Deposits/Funds Cryptography Contracts • Space Anomaly
Trading Platform
• Real Estate • Quantum AI • Consensus Forensics and
• IoT, AI
Protocol Environmental
Resolution

27
IFSCA FinTech Incentive Scheme 2022

S# Grant Category Grant Description Grant Amount (Max.)

(in INR Million)

1 FinTech Start-up Grant FinTech which is an early-stage start-up at an idea stage 1.5

2 Proof of Concept Grant For the purpose of conducting a PoC in GIFT IFSC or globally 5.0

3 Sandbox Grant FinTech selected for IFSCA Sandbox (Limited-Use Authorization) 3.0

4 Green FinTech Grant FinTech focussed on Sustainable/Green Finance 7.5

5 Accelerator Grant To support accelerators / cohorts at GIFT IFSC 1.0 per Cohort

6 Listing Support at IFSC To support IFSC registered Domestic FinTech aspiring to go global 1.5

28
Thank You
Banking Ecosystem
1. Banking Sector (Sept’23)
10 Foreign Banks/MDB
• Banks in GIFT IFSC are provide following services:
Wholesale Corporate
Retail Banking
Banking Banking

Trade Finance ECB* ODI**

Acquisition Loan Investment

Finance Syndication Banking

• IFSCA Banking Handbook: Single source for all banking 15 Indian Banks
related regulatory matters

• Wide array of activities permitted for Banks

• Substantial growth in Non-Deliverable Forwards (USD-

INR) with $ 2 Bn. of avg. daily turnover

* External Commercial Borrowing ** Offshore Derivative Instrument

Capital Market Ecosystem
2. Capital Market Highlights:
Key Developments Two Operational International Exchanges

NSE IFSC-SGX Connect Live: Full Liquidity Switch

1 took place on 3rd July 2023

Listing by SMEs and

Listing by Special Initial Public Offering
Start-Ups
Retail Indian Investors provided with opportunity to Purpose Acquisition (IPO) by Indian &
2 trade in select US Stocks on NSE IFSC platform via Company (SPACs) Foreign Cos
Unsponsored Depository Receipts
Issuance and
Listing of
Securities
(Regulations)
India INX Global Access subsidiary of India INX has been 2021
3 granted approval to provide access to global markets
through international brokers Listing of Depository
Environmental, Social, and
Receipts (DRs)
Governance (ESG) Debt Listing of Debt
Securities
Securities
Funds Ecosystem
 3. Funds Industry:

Funds Ecosystem in GIFT IFSC

• GIFT IFSC is emerging as a preferred jurisdiction for Total Commitment to Funds: $ 19.06 Bn
78
global funds industry including Venture Capital 70
Funds, Private Equity, Hedge Funds, etc. 63 68

55 56
• Almost all new India centric funds are now being set
51
up in GIFT IFSC

39
• Global investors includes Sovereign Wealth
funds/pension funds such as ADIA, GIC, Temasek, 30 32
CPPIB are investing in IFSC Funds 22 24

• Entire ecosystem present including Trusteeship 13 13

firms, Custodians, Fund Administrators, Law firms, 3 3
1
Auditors etc. 1
31-Mar-21 31-Jul-21 31-Dec-21 31-Mar-22 31-Jul-22 31-Dec-22 31-Mar-23 30-Apr-23 31-Jul-23
30-Sept-23

• Dedicated ESG Funds set up

Fund Management Entities AIFs
3. Fund Ecosystem:

AIFs ( Venture Capital Funds, Private Equity Funds & Hedge Funds)

Portfolio Managers/Investment Advisors

Insurance Ecosystem
4. Insurance & Reinsurance
Regulatory Ecosystem
• 13 Insurance Regulations notified
including:
• Registration of Insurance Business,
2021
• Insurance Intermediary Regulations,
2021
• Insurance Web Aggregator, 2022
• Insurance Products and Pricing,
2022
• Appointed Actuary Regulations
2022
• Investment by IIO Regulations 2022
• Re-Insurance Regulations 2023
Business Activities Enabled Re(insurance) Ecosystem
• Internationally aligned insurance • Re-insurer: 7
regulations for onboarding global
industry players. • Intermediaries: 21
• Introduction of new business such as • Gross Premium Booked by IIOs: $ 239
Managing General Agents (MGA) Mn. (Till June 2023)
• IFSC Insurance Offices permitted to do • Re(insurance) premium arranged by
allied activities related to (re)insurance. Insurance intermediaries: $ 720.25 Mn.
(Till June 2023)
• Enabling retail participation through
Insurance Web Aggregators
Aircraft Leasing Ecosystem
5. Aircraft & Ship Leasing

Fastest Growing Market Majority of fleet is on Lease

India is 3rd largest domestic aviation market and 75% - 80% of Indian fleet (~700 Aircrafts) are on
amongst the fastest growing markets globally operating lease from Ireland (leasing hub)

One of Largest Orderbook Forex Outflow as Lease Rentals

By 2050, India’s commercial fleet size is Airlines in India are projected to pay USD 5 Bn per year
estimated to exceed 5,000 aircraft (1200 by 2027) for the next ten years towards lease rentals

Aircrafts leased from GIFT IFSC

GIFT IFSC ecosystem
• Aircraft leasing enabled in GIFT IFSC with necessary policy,
regulatory and tax enablers

• Ecosystem is picking up pace with 22 lessors registered in

GIFT IFSC (mainly small lessors)

• 100+ Aircrafts/Helicopters/ Engines, etc. leased so far

Sustainable Finance
7. Sustainable Finance

Capital Markets Estimates suggest that India will require over USD 10 Tn. to
• Globally aligned Regulatory Framework for ESG Debt meet its net-zero emission commitment by 2070, therefore
Securities foreign capital flows would be critical to bridge the
• Pre & Post Issuance Disclosures investment gap
• Mandatory External Review
• 1st of its kind International Sustainability Platform
launched by NSE-IFSC
Cumulative Debt Listing (USD Bn)
Banking
• Mandatory board approved policy for Sustainable 10.2
Lending 9.2

• 5 % loans to be directed towards Sustainable Lending 7.2

8.1

• Banks commenced lending from FY 23-24

Funds Industry 2 2

• Sustainability related disclosures for large Fund

Entities (AUM >$ 3 Bn) ESG Listing

• Dedicated ESG Funds/Schemes enabled Oct-20 Mar-21 Mar-22 Dec-22 Mar-23 May-23
• 1st ESG Fund launched from IFSC
International Bullion Exchange
8. India International Bullion Exchange (IIBX)

Key Enablers & Outcomes

• Bullion Regulations 2020
• Enabled Qualified Jewellers to import gold though
IIBX
• RBI enabled IBUs to participate as Professional
Clearing Members
• Refiners/Foreign Banks permitted to participate as
Qualified Suppliers
• Cumulative Vaulting capacity: 446 Tonnes (Gold)
Opportunity: India is 2nd largest importer of Bullion with
yearly import of 800 + Tonnes
Business Updates IIBX will transform bullion ecosystem:
• Number of Qualified Suppliers: 19 • Disintermediation
• Number of Qualified Jewellers onboarded: 102 • Quality assurance & Standardization
• Sourcing integrity
• Quantity of Bullion Traded on IIBX: 2290.4 Kgs
• Gradually emerge as Price Influencer
• Develop entire value chain for Bullion
Ancillary Ecosystem
9. Ancillary Services Ecosystem

Regulatory Ecosystem

1. IFSCA issued Ancillary Services Framework 2021 to develop professional services ecosystem in GIFT IFSC
2. Ancillary Services include Legal, Accounting, Auditing, Bookkeeping, Taxation, Management Consulting, Trusteeship
Services, Secretarial Services, etc.

Growth in Ancillary Ecosystem

• 50 + Ancillary Services firms have been authorized by IFSCA

International Collaboration
10. International Collaboration: MoU’s

1. IFSCA is an associate member of IOSCO and signatory to IOSCO’s MMoU

2. IFSCA is member of IAIS

Executed Inter-Regulatory MoU’s

ABU DHABI GLOBAL MARKET LUXEMBOURG: COMMISSION DE DUBAI FINANCIAL

FINANCIAL SERVICES SURVEILLANCE DU SECTEUR SERVICES AUTHORITY
REGULATORY AUTHORITY (ADGM- FINANCIER
FSRA)

QATAR FINANCIAL CENTRE AUTHORITY Singapore

FI SWEDEN