As a decade of tax breaks offered by India to encourage overseas borrowing ends, Gujarat International Finance Tec-City (GIFT City) could take centre stage for the international borrowing needs of Indian companies because of tax-friendly rules akin to that of any offshore financial hub, said top executives. The new centre is attracting banks, financial institutions and global investors eager to set up shop to meet India Inc’s appetite for foreign funds, said those aware of the matter.
India’s Gujarat International Finance Tec-City, or GIFT City, could become a leading centre for the international borrowing needs of Indian companies, as tax breaks that encouraged overseas borrowing come to an end. The centre offers tax-friendly rules, leading several Indian companies to already say they will shift their bond listing activities from overseas jurisdictions to GIFT City. Indian firms raising foreign currency loans could also choose to do so from GIFT City’s branches. Since India raised $30bn in foreign funds through the ECB route last year, GIFT City stands to benefit significantly.