The Centre is all set to give a nod to the setting up of the BRICS’ New Development Bank’s Indian regional office at the GIFT SEZ IFSC (International Financial Services Centre), in Gandhinagar, with the proposal scheduled to be taken up by the Board of Approval (BoA) for SEZs in a meeting later this month.
The Department of Economic Affairs (DEA), which has made the proposal, has also sought certain relaxation of SEZ rules for the smooth functioning of the Indian Regional Office (IRO) that will promote “effective and extensive’’ investment operations by NDB in India, as per the agenda of the BoA meeting scheduled on July 29. “Operationalisation of the IRO is one of the important agenda items of BRICS, 2021 under India’s chairship and the announcement of operationalisation of IRO is expected to be made in the BRICS Lenders Summit to be held on September 9,” per the agenda of the meeting scheduled on July 29.
NDB, a multilateral development bank established by Brazil, Russia, India, China and South Africa in 2014, aims at mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries.The bank supports its members in infrastructure development through loans, guarantees, equity participation and other financial instruments. “Since India is one of the largest recipients of finances from the NDB, it is important that all measures are taken to ensure smooth functioning of the development bank’s regional office in the country. That is why the DEA and the Development Commissioner (DC) of the GIFT SEZ have also sought certain relaxation of SEZ rules for the functioning of the office,” an official tracking the matter told
$4.7 billion loan assistance
As many as 15 sovereign projects amounting $4.7 billion of loan assistance have been posed to NDB for financing in different States in India, the agenda note pointed out. Owing to the importance of the project, the DC of the GIFT City SEZ has recommended to the BoA, so that the IRO may be exempted from certain provisions of SEZ rules. These include exemption from providing details on net foreign exchange earning, items of manufacture/service activity, employment, annual report, marketing collaboration and industrial licence, information of bank accounts, PAN, IEC numbers and exemption from application fee.
In July 2020, the Union Cabinet had approved the signing of an agreement between the Gol and NDB on hosting the NDB’s IRO at GIFT SEZ. Consequently, in September 2020, the Board of Directors of NDB accorded approval for signing the Host Country Agreement (HCA) with India. The Host Country Agreement (HCA) on the IRO was signed in December 2020.
In June this year, the Department of Commerce inserted a new rule in the SEZ Rules, 2006 allowing a multilateral agency to set up their local or regional office in the IFSC as a unit.