Fadnavis plans to shift proposed IFSC to Nagpur?

Mumbai: After failing to receive sanction from the Centre for setting up the International Financial Services Centre (IFSC) at Bandra Kurla Complex (BKC), chief minister Devendra Fadnavis now wants to shift it to Mihan, (Multi-modal international cargo hub and airport) in Nagpur, which is an export SEZ and will develop its ‘commodity exchange’ in Mumbai. It is a watered-down alternate plan of the state government. “We will send proposal for Mihan to the Centre, but will not withdraw proposal of Mumbai IFSC,” senior officials told The Asian Age. It may be difficult to get tax exemptions from the Centre for transactions in Mihan like the Gift IFSC in Gujarat receives.

The IFSC controversy has thus taken a new turn with the CM considering a new plan as a facesaver following Union finance minister Arun Jaitley’s announcement in Parliament recently that they would consider the proposal of Mumbai IFSC after Gift in Gujarat gets functional. It is the Prime Minister’s dream project.  

Mr Fadnavis is considering the option to shift the IFSC plan to Mihan and have Mumbai function as a commodity exchange for Mihan. It is sanctioned as an export SEZ and can start financial derivatives also, said sources. He had called a meeting of the IFSC taskforce for January 15, which will now be rescheduled to the end of the month.

The chief minister, however, told The Asian Age, “I m sure we will be successful in setting up  IFSC in Mumbai, as it’s a  natural IFSC.”

A senior official also said,“It was suggested that the IFSC be set up at Mihan, but Mr Fadnavis refused to do so. He told Mr Jaitley that if the Gift is to be a success, its front office should be in the Mumbai IFSC and Mr Jaitley agreed.”

Mr Fadnavis has been facing a lot of flak because the Centre is not sanctioning the Mumbai IFSC and there is a demand to shift it to Navi Mumbai, which has SEZ sanction as well as all necessary infrastructure. An international airport will also become functional in three to four years and Cidco has enough land. But Mr Fadnavis has preferred Mihan.

What is a commodity exchange?

A commodity exchange is an entity that provides platforms, rules, regulations and procedures for the exchange and trade of commodities and related investments, called derivatives. Just like the way one invests in stocks through a stock exchange, one can invest in a commodity through a commodity bourse. Commodity exchange, also called commex, allow trade in myriad products such as agricultural produce, metals, energy etc and also contracts, such as spot, forwards, futures. But no exchange having backing of SEZ, said sources.