GIFT City’s Growing Credibility Reduces Reliance On Offshore Tax Havens: IFSCA Chief

The increasing trust in GIFT City and the stabilisation of its regulatory framework have significantly reduced the need for Indian companies to route their operations through low-tax jurisdictions such as the Cayman Islands, according to K Rajaraman, chairman of the International Financial Services Centres Authority (IFSCA).

IFSCA, set up under the Ministry of Finance as a unified regulator for financial services, acts as a single-window authority for firms operating in the Gujarat International Finance Tec-City (GIFT City).

Rajaraman said this regulatory clarity is only one of several advantages drawing businesses to the financial hub.

“We have deliberately worked on ensuring our regulations are aligned with global regulations,” he told The Hindu in an interview. “There is no longer any financial reason for companies to go to the Cayman Islands or other similar jurisdictions to do business; they can do it onshore in India.”

He highlighted that companies operating in GIFT IFSC are eligible for a corporate tax holiday for 10 out of their first 15 years, and services received or supplied within the IFSC are exempt from GST.

Emerging Leasing Hub

“When you open a company in GIFT City, it becomes a non-resident and conducts all its business in international currencies, not the rupee,” Rajaraman explained.

He further noted that firms previously relied on Dublin for aircraft leasing, Dubai for ship leasing, and Singapore for dollar borrowings.

“Now, all of that can happen in India from GIFT City itself,” he noted.

Recent data reflects this shift. GIFT City now has 34 registered ship lessors, including major global players such as Great Eastern Shipping, MOL, Transworld Group, Propel Shipping, PanBulk, and the Ripley Group.

As of September, 28 ships remain leased from the IFSC.

The aviation leasing ecosystem is expanding as well, with 37 registered aircraft lessors and 303 aircraft assets, including commercial jets, helicopters, engines, business jets, and trainer aircraft, leased so far.

Rising Global Confidence

“Trust and confidence in GIFT City is growing, and even more international banks will come,” Rajaraman said.

He pointed out that of the total $61 billion in external commercial borrowings (ECB) by Indian companies, $19 billion now originates from GIFT City.

The financial district currently hosts 35 banks, including 18 foreign lenders, with total banking assets reaching $100 billion as of September 30, 2025.

The IFSC framework, he said, enables exporters to secure trade finance in dollars, insure vessels in currencies accepted globally, and tap international capital markets by listing on global exchanges from within GIFT City.

Rajaraman noted that while the IFSC approved under the 2019 Act, tangible momentum began only recently.

“We started operating in 2020, when the authority [IFSCA] was established, but the real operationalisation of the full spectrum of regulations started in 2022-23,” he said. “So I can say that we are only about 2-3 years old from that count, so that’s why I think you would see the progress is significant in the last two years.”

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