IRDAI issues regulations for GIFT IFSC
Insurance operations at India’s only operational International Financial Services Centre (IFSC) – Gujarat International Finance Tec City (GIFT IFSC) – gets a major boost with Insurance Regulatory Development Authority of India (IRDAI) issuing enabling regulations for undertaking offshore insurance business from IFSC.
Under the regulations, for the first time in the country, foreign insurers are permitted to open IFSC Insurance Office (IIO) at GIFT IFSC. As GIFT IFSC has been notified as foreign territory by Govt. of India the foreign direct insurers (life, non-life and general) and foreign re-insurers are permitted to open office to undertake dollar denominated business from: within the IFSC in GIFT SEZ; all other Special Economic Zones in India; from foreign countries (this covers foreign to foreign, India to Foreign and Foreign to India); or to undertake Domestic Insurance & Reinsurance business in line with the provisions of IRDA regulations.
Commenting on the development, Ajay Pandey, MD & Group CEO, GIFT City said: “IFSC already hosts three major insurance players, GIC Re, New India & ECGC, and five insurance broking entities. With the business guidelines in place, we are now hopeful that foreign and domestic insurance companies would participate in making GIFT IFSC a hub for International insurance business.”
Government of India has provided competitive tax regime for the IFSC units and thereby units are provided 10-year tax holiday (of which the first five years is a complete tax holiday and for next five years there’s a tax reduction of 50 percent), which is applicable for all insurers operating within GIFT IFSC. For export of services, insurance companies operating from IFSC are exempted from GST.
The move would also help Indian Insurers to set up their offshore office in GIFT SEZ IFSC to undertake dollar business which otherwise was restricted in India. This would become a big enabler for Indian direct and re-insurance players as it provides them a foreign branch in close proximity which would be operationally cost effective.
