The decision to open in the India hub shows how the centre is positioning itself to win cross-border business, putting itself to some extent in competition with places such as Dubai, Mauritius and Singapore.

Sumitomo Mitsui Banking Corporation (SMBC) has obtained approval to open a branch in an Indian financial services hub.

The Japanese group has secured regulatory clearance to open in the Gujarat International Finance Tec-City – aka GIFT City – from the International Financial Services Centres Authority in India and the Financial Services Agency in Japan. 

The GIFT City hub comprises an offshore special economic zone, benefiting from tax incentives such as zero withholding tax which in principle applies to offshore foreign currency-denominated borrowing from outside India. Other incentives offered by the hub include exemption from stamp duty and exemption from goods and services tax. Figures in the wealth management sector, such as Simon Hopkins of Milltrust, have told this news service that this centre has large potential.

“GIFT City presents an opportunity for the bank to manage offshore business linked to India from within the country, enabling us to cater to the diverse and growing needs of our clients,” SMBC, which has been operating in India since March 2013, said in a statement.

SMBC established its first branch in New Delhi 11 years ago, and the Mumbai and Chennai branches opened in March 2017 and November 2020, respectively to provide financial services to its customers.

In recent months, about eight of the 10 biggest Indian asset managers by assets have either relocated their business, or set up new funds or filed for permits to move to GIFT City (source: Reuters, 9 February 2024).