GIFT City Set to Revolutionize Forex with Real-Time Settlements, Boosting Investor Opportunities in India
Mumbai — India’s Gujarat International Finance Tec-City (GIFT City) is taking a major leap forward in financial innovation as discussions are underway with the Reserve Bank of India (RBI) to enable domestic banks to settle foreign exchange transactions in real-time.
The move promises faster, more efficient, and cost-effective forex operations, enhancing the attractiveness of GIFT City as a premier finance hub rivaling global centres like Dubai and Singapore.
The International Financial Services Centres Authority (IFSCA) recently launched a real-time foreign currency settlement system at GIFT City, with Standard Chartered India initially handling U.S. dollar clearances.
This pioneering system has cut settlement times dramatically, from nearly 24 hours to just 30 seconds, streamlining operations for investors and financial institutions alike.
K. Rajaraman, chairman of IFSCA, confirmed that discussions with the RBI are focused on expanding the facility to include domestic banks. Once approved, Indian lenders will be able to settle their forex transactions instantly through GIFT City, opening new business avenues and providing investors with greater flexibility and efficiency in cross-border trading.
“In the next six-to-eight months, we plan to allow banks in India to settle their dollar transactions through this clearing system with due permissions from the Reserve Bank of India,” he said.
This innovation aligns with Prime Minister Narendra Modi’s vision to position GIFT City as a global financial hub. By combining real-time forex settlements with tax-neutral advantages, GIFT City is set to attract more foreign investors and strengthen India’s position in international financial markets.
GIFT City is also enhancing its derivatives market. The National Stock Exchange of India recently introduced daily expiry contracts for GIFT Nifty, a dollar-denominated derivative of the Nifty 50 index traded at the hub.
Unlike domestic derivatives, which have stricter regulations to protect retail investors, GIFT Nifty is designed for institutional participants, ensuring robust risk management while providing exciting opportunities for sophisticated investors.
Rajaraman emphasized that risk measures are in place to prevent any spillover from derivative activity at GIFT City to domestic markets, ensuring stability and confidence for all participants.
He noted, “The dollar-denominated instruments are meant for institutional investors, mitigating the issues often seen with retail trading in domestic derivatives.”
These advancements reflect India’s proactive approach to modernizing its financial infrastructure, combining technology, efficiency, and regulatory foresight.
By enabling real-time FX settlements and offering innovative derivative products, GIFT City is setting a global benchmark for financial centers, attracting both domestic and international investors.
With these developments, GIFT City is not only simplifying forex and derivative transactions but also creating a dynamic ecosystem that encourages growth, investment, and financial innovation.
The city is poised to become a shining example of India’s commitment to strengthening its financial markets, fostering investor confidence, and promoting the country as a leading hub for global finance.
