The map
| Authority | What it decides for an IFSC business |
|---|---|
| Parliament | The governing statutes: the IFSCA Act, 2019, the SEZ Act, 2005, the Income-tax Act, 2025 and FEMA, 1999 |
| Central Government (Ministry of Finance) | Notifies further financial products and services under section 3 of the IFSCA Act; tax changes through Finance Acts |
| IFSCA | Registration, regulation and supervision of financial activity in the IFSC; also SEZ administrator for GIFT IFSC units (unit approval, Letter of Approval, bond-cum-legal undertaking) |
| CBDT and the income-tax department | Section 147 deduction, TDS relief notifications, returns and assessments |
| CBIC | GST and customs treatment of SEZ and IFSC supplies |
| RBI | FEMA rules for residents dealing with the IFSC: overseas investment, external commercial borrowing, the Liberalised Remittance Scheme, accounts in India |
| SEBI and IRDAI | The Indian-market side: foreign portfolio investors, Indian insurers and cedants |
| Ministry of Corporate Affairs and Registrar of Companies | Incorporation of companies and LLPs; registration of foreign company branches |
| DGFT | Importer-exporter code and related trade registrations, including for bullion imports |
| Government of Gujarat | Shops and establishments, professional tax, stamp duty, State incentives |
| GIFTCL and co-developers | Real estate and city services: provisional letter of allotment, NOC, lease |
| Exchanges and market infrastructure | Membership, listing and trading rules of the IFSC exchanges, clearing corporations and depositories |
| Courts and tribunals | The High Court of Gujarat, the Supreme Court, the Income-tax Appellate Tribunal and arbitral tribunals |
A working rule
When an activity stays inside the IFSC and deals only with non-residents, IFSCA's rules decide almost everything. The moment the activity touches Indian residents, Indian rupees or Indian securities, another regulator's rules apply as well.
This follows from the structure of the IFSCA Act. Section 13 moves to IFSCA the powers of RBI, SEBI, IRDAI and PFRDA only so far as they concern the regulation of financial products, services and institutions in the IFSC. The Indian counterparty to a cross-border transaction remains within its own regulator's reach.
Three illustrations
- A fund manager taking Indian investors. IFSCA registers the fund management entity and approves the scheme. A resident individual investing in it remits under RBI's Liberalised Remittance Scheme, through an authorised dealer bank in India. See Residents and LRS.
- An Indian company setting up an IFSC subsidiary. IFSCA and the SEZ process govern the subsidiary. The parent's investment is an overseas investment under FEMA, governed by RBI's rules. See Indian groups and ODI.
- A payment service provider paying rupees in India. IFSCA requires its prior permission before a PSP joins a rupee drawing arrangement, and the arrangement itself runs under RBI's master direction for non-resident exchange houses. See Rupee drawing arrangements.
Using the map
Early in a project, list each step of the set-up and each recurring transaction and match it to an authority. The usual order is: entity and premises (MCA, GIFTCL), then the joint SEZ and IFSCA application on SWIT, then post-approval registrations with tax and State authorities. See Set-up sequence. Gaps tend to appear on the Indian side of cross-border flows, where the IFSC unit's counterparty needs its own approval or reporting.
Remember too that IFSCA acts in two capacities. As SEZ administrator it deals with unit approval, the Letter of Approval, the bond-cum-legal undertaking and commencement of operations. As regulator it grants the registration for the financial activity. The SWIT workflow, for example, expects the lease agreement with the co-developer to be filed with IFSCA within six months of the Letter of Approval. Missing an SEZ-side step can delay the start of business even when the regulatory registration is in hand.