A quiet revolution has started in the Indian investment scenario with the opening of the trades in GIFT NIFTy from 3rd July 2023. This will have an impact not only on the Indian investment scenario but could have impact on the laws such as the Data Protection Laws that we are following closely.
It will take some time for the full impact of GIFT City and GIFT NIFTY to be felt in the Indian economy but we need to keep in our radar the developments.
GIFT stands for Gujarat International Finance Tec-City physically located in Gandhinagar, Gujarat and modelled on the DIFL or Dubai International Finance Center (DIFC). It is a Government of India project and revolutionary in nature. Readers may recall several of Naavi’s suggestions in the past on creation of such center in Karnataka (Refer the article: 10 years after Naavi’s suggestion, “Data Embassy” concept is accepted by Government!). Unfortunately the Karnataka Government was not proactive in implementing such thoughts and now without much fanfare the revolutionary idea has been realized in Gujarat, the home town of Mr Narendra Modi. We welcome the initiative wholeheartedly.
The website www.giftgujarat.in provides information about GIFT. It is proposed as a Financial and IT Services hub, first of its kind in India. As a combination of Finance and IT services, this perhaps is a step ahead of DIFL. Probably all IT companies will now head for this location to establish their businesses. They will regret if they dont do.
The GIFT proposes to have an “International Financial Services Cener” (IFSC) as a unit with tax incentives, such as 100% tax exemption for 10 consecutive years out of 15 years and other benefits.
Soon the Government may decide to include the incentives Naavi suggested earlier as regards the application of Data Protection laws. The DPDPB 2022 already has an open position on this and GIFT City could become the automatic choice for immunity from Indian law if the data processed is not Indian data. Perhaps it may even be possible to get EU GDPR adequacy for GIFT City.
As regards the GIFT NIFTY, it will be the new version of SGX NIFTY. GIFT NIFTY operates for 21 hours in a day and will start at 6.30 am and go upto 3.40 pm and again from 4.35 pm to 2.45 am. As of now the composition of Gift Nifty remains the same as SGX NIFTY. Investments are not open to retail investors in India but other institutions may invest in Foreign currency. There will be four sub products namely Gift nifty 50, Gift nifty bank, gift nifty financial services and Gift nifty IT. All will be derivative contracts.
The development is considered path breaking and should help the stock markets also to expand.