IFSCA aims to obtain authorization for foreign-flagged vessels to operate within GIFT City

ArcelorMittal has expressed interest in relocating one of its ships to IFSC-GIFT City in India, but only if the ship can continue to sail under a foreign flag. This potential move represents a significant departure from India’s current regulations, which only allow Indian-flagged vessels in IFSC-GIFT City. ArcelorMittal has emphasized the importance of maintaining a foreign flag in order to satisfy its lenders. The Gujarat International Finance Tec-City (GIFT City) is India’s first International Financial Services Center and currently falls under the Merchant Shipping Act, 1958, which mandates Indian-flagged vessels only.

This development points to India’s aspiration to become a maritime hub akin to other global financial centers such as Singapore, Dubai, Hong Kong, London, and more. IFSCA, the regulatory authority for IFSC-GIFT City, has submitted a statement to the Directorate General of Shipping to address the issue. Indian shipping companies have had to relocate to other countries such as Singapore and Dubai due to limitations on operating foreign-flagged vessels in India. The Ministry of Ports, Shipping, and Waterways is seeking to attract these companies back to IFSC-GIFT City through various tax incentives and exemptions.

IFSCA is making efforts to bring back Indian shipping companies that have left India for operational and tax reasons, as well as to attract foreign shipping companies to establish ship leasing units in IFSC-GIFT City. This includes tax exemptions for ten years, no capital gains during the tax exemption period, stamp duty exemptions for five years, and further tax exemptions for income from royalties or interest on ship rentals. These efforts are part of a broader strategy to position IFSC-GIFT City as an attractive location for shipping companies.

Source .