IFSCA proposes to allow foreign flag ships from GIFT City without licensing requirements stipulated under local laws

Reportedly, the Ministry of Ports, Shipping and Waterways is struggling with the International Financial Services Authority’s (IFSCA) proposal to permit entities operating out of Gujarat International Finance Tec-City (GIFT City) to own and run foreign flag ships without any licensing requirements stipulated under local laws. Presently, as per the Merchant Shipping Act, registration of ships under the Indian flag is mandatory and section 406 of the Act mandates Indian ships and chartered (foreign) ships to secure a license from Directorate General of Shipping to operate. The IFSCA’s GIFT city follows a tax regime which provides a ten-year tax holiday out of any 15 years and entities setting up units in the city are also exempt from capital gains tax, goods and service tax, stamp duty, and so on.