India Launches Foreign Currency Settlement System via GIFT City

India has officially launched a new foreign currency settlement system through the Gujarat International Finance Tec-City (GIFT City), aiming to streamline cross-border transactions and establish the hub as a global financial center. The initiative enables faster and more efficient settlement of transactions in U.S. dollars, euros, and other major currencies, targeting both corporate clients and financial institutions that require quick and secure foreign exchange operations.

The system is part of a broader effort to attract multinational corporations and foreign investors to GIFT City, which is designed to operate as a tax-neutral financial hub. By offering a specialized infrastructure for foreign currency settlement, India aims to provide an alternative to traditional banking channels, which often face delays and higher costs in cross-border transactions. The settlement system is expected to boost efficiency and reduce operational friction for international business.

Standard Chartered Bank’s India branch has been chosen as one of the primary operators for U.S. dollar clearances under the new system. The partnership with established financial institutions ensures that the platform adheres to international best practices in compliance, risk management, and transaction security. By leveraging established banking networks, the system combines reliability with cutting-edge technology to process settlements quickly and accurately.

GIFT City has been developed with a focus on technology-driven services, including real-time monitoring, automated reporting, and end-to-end transparency for all transactions. The settlement system integrates with existing banking infrastructure to facilitate smooth interbank transfers and provides financial institutions with instant reconciliation tools. This minimizes the risk of settlement delays and helps maintain liquidity in cross-border operations.

Industry experts note that the launch of the foreign currency settlement system is likely to encourage more multinational companies to establish operations at GIFT City. It provides a competitive advantage over other financial centers in Asia by offering lower costs, faster transaction times, and enhanced regulatory clarity. Companies that conduct frequent international transactions, such as exporters, importers, and multinational service providers, stand to benefit the most.

The system also aligns with India’s broader strategy to digitize its financial ecosystem and encourage innovation in payment solutions. By adopting state-of-the-art technology for settlements, India demonstrates its commitment to improving operational efficiency and integrating modern financial infrastructure with global markets.

Additionally, the initiative reflects India’s goal of strengthening its position in international trade and finance. By providing a reliable and streamlined settlement platform, GIFT City becomes an attractive location for foreign investment and cross-border business activities. Over time, this could enhance India’s influence in global financial networks and contribute to the country’s economic growth.

Early feedback from participants in pilot programs indicates strong interest from both domestic and international banks, with plans to gradually expand the system to include more currencies and transaction types. The launch marks a significant milestone in India’s ambition to position GIFT City as a leading financial hub, capable of handling sophisticated and high-volume international transactions efficiently.