How Budget may allow Ghar Wapsi of Indian startups via this route

The upcoming Union Budget may see the government pave way for foreign-domiciled Indian startups to move their corporate headquarters back to India. The route for this is likely to be via the special economic zone of GIFT City — with minimal tax implications. In January this year, the government amended laws to permit the direct listing of unlisted companies in the GIFT IFSC.Gujarat International Finance Tec-City, or GIFT City, functions as an offshore financial centre located on Indian soil, and with operations in foreign exchange. In its attempt to make GIFT City compete with global financial hubs like Dubai and Singapore, the government has been trying to woo companies to the city with tax-breaks and other sops.
The International Financial Services Centres Authority (IFSCA) chief K Rajaraman recently said that the government plans to come out with final norms for direct listing at GIFT City by early July. IFSCA is the unified regulator for the GIFT IFSC. “Based on our interactions with various users, we have realised that our regulations need a little update. Therefore, what we have done in the last two months is to update our listing regulations,” Rajaraman told reporters at the sidelines of a BSE event.
On the timeline, the IFSCA chairman said that he hoped that companies will be able to list under the revised norms by August.

The companies that will be the biggest beneficiary of this scheme

As for the companies, he added that e-commerce and new-age technology companies or the foreign-based entities with significant business in India would be the ones who would consider direct listing at Gift city. The moves is expected to ease the return of unicorns like Razorpay, Zepto and Meesho to India, as well as help them tap into the growing stock market in India.
The government had allowed domestic companies to directly list their securities on overseas exchanges in specified jurisdictions, expanding capital- access opportunities for businesses in India. Initially, it would allow listing on the International Financial Services Centre (IFSC) and later on companies would be permitted to list in seven or eight specified overseas jurisdictions.
Indian companies can list both in INR and Dollar
“Our agenda for 2047 is not that Indian companies remain in India, but Indian companies becoming global champions,” Rajaraman said. The IFSCA chairman further added that if Indian companies have to become global champions, the regulators need to provide them with all types of capital – dollar or rupees.
“It depends on the company, if they want to deal in INR, they can list in India, but if they want to deal in a Dollar or a Euro market, they can list in GIFT City,” he said.
GIFT City IFSC is also said to be preparing the ground for the maiden issue of Sovereign Green Bonds by govt of India.