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How will GIFT City benefit investors?

GIFT City is a gateway that will open foreign capital inflow. It is good for the Indian Asset Management ecosystem, investors in India as well as international investors including NRIs. What is most attractive at GIFT City is the ease of access, streamlined procedures and ease of business. As a result, a lot of traders and investors would prefer to shift to GIFT City which would increase volumes and create liquidity. Liquidity from hedge funds and FIIs would help in exploiting the financial markets even more.

There are also huge tax benefits for the NRIs and foreign investors which will not be enjoyed by the Indian investors currently. NRIs can even invest in derivatives and what they earn as income would be totally be tax free, this is a big incentive by the Indian govt for GIFT City. The trading exchange at the GIFT City would also be open for longer hours.
The trading prices, volumes and trends will be more visible because the trading will start earlier. GIFT City has government backing, tax efficiency, has adopted Singapore arbitration and has world class service providers.

India is the second-largest consumer of gold. Recently, India’s first global bullion exchange, India International Bullion Exchange (IIBX), was inaugurated by Prime Minister Narendra Modi at Gandhinagar’s GIFT city. The international financial services hub is being seen as an effort by the government to provide more transparency to gold trade in India. The new exchange would enable the country to claim its place in the global gold market. It would provide India a chance to be a part of the global value chain. The International Financial Services Centre Authority (IFSCA) would be the regulator. It would oversee the transactions that are presently made internationally.

It is good long term initiative for Indian investors to get liquidity for assets like gold and invest in global companies. Many HNIs and family offices who want to invest in global companies directly, this is a good opportunity. The bullion exchange will give a better band of pricing to the asset class and also provide a good liquidity route. In India there is a lot of gold but very few come on the exchanges to sell it. So the setting up of the bullion exchange is a welcome move for the Indians.

At GIFT City, there is a visible alignment of purpose between the regulator, the government and the industry. This poses a good sign and GIFT City is here to prosper and offer growth to everyone.

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