The Centre will set up an international arbitration centre at the Gujarat International Finance Tech (GIFT) City to speed up cross-border dispute resolution, Finance Minister Nirmala Sitharaman said on Tuesday.

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The centre could be established on the lines of the London Commercial Arbitration Centre or the Singapore International Arbitration Centre, Economic Times reported.

Announcing a series of sops for the planned business district in Gujarat in the Union Budget 2022-23, Sitharaman said that the government will encourage setting up of world-class foreign universities in GIFT City, permission to handle “climate finance” and tax exemption for ship leasing and financing, offshore fund management and offshore banking at IFSC.

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The universities, which will offer courses in financial management, fintech, science, technology, engineering and mathematics, will help facilitate the availability of trained manpower. It will also be free from domestic regulations, except those by IFSCA, the finance minister said.

“Services for global capital for sustainable and climate finance in the country will be facilitated in the GIFT City,” Sitharaman said.

The finance minister exempted the income of non-resident Indians from offshore derivative instruments or over-the-counter derivatives issued by an offshore banking unit from taxes. Similar tax exemptions were doled out for income from royalty and interest on ship leasing and income received from portfolio management services in IFSC.

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The proposed income tax exemptions will help start ship leasing activities and give relief to international banking units and global portfolio managers working from GIFT City, a top official from GIFT City told Indian Express. At present, any income accrued in India is taxable, the official added.

Since 2014, when the Bharatiya Janata Party came to power at the Centre, the government has announced sops for GIFT City in the Union Budget.

The fact that GIFT IFSC has featured prominently in the budget shows the importance the government attaches to its development as a vibrant and business-friendly international financial services ecosystem, Mint quoted Injeti Srinivas, chairman of IFSC Authority, as saying.

The proposal to set up an international arbitration centre will boost the confidence of foreign investors in IFSCs and usher in international best practices, Tejesh Chitlangi, senior partner of IC Universal Legal, told Mint.

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(Edited by : Priyanka Deshpande)