Coming soon: P-notes made in GIFT City

Easing of norms may prompt FPls to issue participatory notes from there

- KHUSHBOO TIWARI

Issuance of offshore derivative instruments (ODIS), popularly known as participatory notes (p-notes), from the GIFT City is expected to rise following the relaxations announced in the Budget for entities operating out of the International Financial Services Centre (IFSC).

Experts believe the freshly announced measures make it more attractive to issue P-notes from GIFT City compared to offshore jurisdictions such as Mauritius and Singapore.

In her Budget speech, Finance Minister Nirmala Sitharaman announced an exemption on any income accruing or arising to, or received by, a non-resident due to the transfer of non-deliverable forward contracts entered into with FPIS in the IFSC.

This measure is expected to encourage offshore entities to shift their ODI business from other jurisdictions and allow non-bank FPIS, such as broker dealers and alternative investment funds, to issue ODIs in the IFSC.