New Delhi [India], June 8 : GIFT City in Gujarat is increasingly gaining traction for setting up Global or Regional Treasury and Commodity Trading Centres (GRCTCs), due to their lower costs and expanding incentives, as per a report by global accounting firm EY.
The Indian economy is poised at a strategic inflection point, where the intent of the government and the regulators is aligned to create a strategic force in the development of the financial market ecosystem.
"GIFT City and International Financial Services Centres Authority (IFSCA) are pivotal in positioning India as a front-runner and the destination of choice for setting up Global or Regional Treasury and Commodity Trading Centres (GRCTCs)," said Hemal Shah, Partner, Financial Services Risk Management, EY India.
Amid growing global volatility, multinational corporations are re-evaluating how they manage liquidity, financial risk and commodity trading.
Global / Regional Corporate Treasury Centres (GRCTCs) are emerging as a strategic solution to these challenges, EY said in the report.
"Acting as internal hubs for financing and commodity-related activities, GRCTCs enable companies to streamline operations, enhance transparency, and optimize financial and trading decisions across jurisdictions," the executive summary of the report read.
Global benchmarks such as Singapore, Hong Kong, Dubai and European hubs have long offered attractive environments for GRCTC setups.
"However, emerging locations like Shanghai, Kuala Lumpur, Bangkokand notably, India's Gujarat International Finance TecCity (GIFT City)are increasingly gaining traction due to their lower costs and expanding incentives," the EY report read.
"GIFT City has the potential to be ranked among the world's leading financial hubs for organizations looking to establish GRCTCs. Its infrastructure promotes a business-friendly environment that accelerates organization's growth, international finance and foreign investment, signaling a promising future."
With supportive regulations, growing infrastructure, and increasing industry interest, India's GIFT City is poised to join the ranks of established GRCTC hubsoffering multinational corporations an attractive new base for global treasury and commodity trading operations, it added.
According to EY, GRCTC can be defined as an internal banking and commodity trading hub for multinational companies with operations across geographies. Its primary goal is to centralize fund management, facilitate commodity trades, manage trading costs, and enhance financial resource utilization across the group.
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