India shines at DIFC

DIFC's legal and regulatory framework offers a highly conducive and secure environment for the growth of Indian banks

India has a robust economic presence in the UAE. Their strategic relationship has further buoyed cooperation, and that is evident from the volume of business between the two countries. This is substantiated from the presence of Indian banks in the Dubai International Finance Centre (DIFC). India has a number of major banks and other financial firms listed at DIFC that act as a vehicle to channel investment flow between the two countries.
Indian banks that operate from DIFC - which is home to some of the best and top financial companies in the world - not only cater to the growing bilateral trade, but also reach out to other Gulf countries, as well as beyond to Central Asia and Africa. The DIFC nexus for Indian banks has given a boost to economic and commercial relations, and contributed to the stability and strength of a rapidly diversifying and deepening bilateral relationship.
This is why the UAE is now India's premier trading partner and accounts for about half of India's trade in the Gulf region. India is also the largest trading partner of the UAE. The UAE accounts for nearly half of India's $144 billion trade with the Arab world. Dubai's indispensable position as the financial and commercial hub in the Middle East has further strengthened India's vision to interact closely with all the developing economies in the region, and Indian banks at DIFC are simply cementing that path of greater amalgamation and cooperation.
The Indian banks in the DIFC provide a range of services to their corporate clientele, including loan syndication, trade finance, buyers and suppliers credit, project finance, term finance and deposit accounts. Their exists also a module for expediting the resolution of issues associated with existing investments and opportunities for new cross-border investments across a range of sectors.
India has shown keen interest in construction, downstream products in the petroleum and natural gas sector, agriculture and food processing, science and technology, renewable energy, IT, education, training, health and financial services. Moreover, Indian entrepreneurs have some of the biggest chain investments in the UAE, and are an active partner in consolidated long-term investments, as well.
Governed under the Dubai Financial Services Authority, the DIFC's legal and regulatory framework offers a highly conducive and secure environment for the growth of banks in the fields of commercial banking, investment banking, trade and export finance, project and infrastructure funding, treasury services and correspondent banking.
DIFC is home to leading Indian banks, financial institutions and fund managers, including ICICI Bank, IDBI Bank, Punjab National Bank, Union Bank of India, State Bank of India, IIFL Private Wealth Management, L&T Capital Markets Limited and Aditya Birla Sun Life Asset Management Company Limited. Bank of Baroda, HDFC Life and Axis Bank, the third largest of the private-sector banks in India, are now also part of operations in DIFC. The Federal Bank, a leading Indian private sector bank, deals with wholesale banking services for catering to trade and industries from the financial heartthrob in Dubai.
The DIFC's vibrant ecosystem, coupled with its efforts to improve ease of business and an enabling Qualified Investor Funds regime, has seen significant interest from Indian asset managers and private equity players. A number of Indian banks, likewise, are rated in Category 1 banking licences at the freezone called DIFC, which shows their effectiveness and contribution to the collective economic interests of global finance.
With relations growing at an unprecedented level, Indian banks, insurers, law firms and wealth managers have a robust role to play at the DIFC and expand their services qualitatively and quantitatively. Indian institutions now make up the third largest community of financial firms at DIFC. As part of its 2024 strategy, DIFC plans to increase the number of Indian firms to over 100 in the next couple of years. The UAE is home to more than two million non-resident Indians and they have set up more than 40,000 companies. It is estimated that Indian investments in the UAE surpasses more than $70 billion.
Indian banks at DIFC offer easy liquidity to move the wheel of trade, and acts as a catalyst in ensuring smooth supply and demand. This helps in the form of export finance, or cash and assets, available in the form of currency and guarantees a jump-start. It inevitably acts as a cushion for growth and development for a number of bodies listed on the DIFC.
In other words, the forum is about managing credit and business performance risks. It has both international and domestic dimensions, and sophistically links a business concern with an institutional framework. DIFC simply institutionalises that process and acts as a valve for trade financing. The intention is to structure transactions in an interactive and risk-free manner, and help the trade activity get a level playing field on both the ends. Both countries are increasingly keen to broaden commercial links with a particular focus on investment, and the DIFC is facilitating that objective.
- mehkri@khaleejtimes.com
Facts and figures
- India has banks and other financial firms listed on DIFC
- UAE accounts for about half of India's trade in the Gulf region
- India has $144 billion trade with the Arab world
- Indian banks at DIFC cater to trade finance, buyers and suppliers credit, project finance, and deposit accounts
- Indian entrepreneurs have some of the biggest investments in the UAE
- Many of the Indian banks are rated in Category 1 at DIFC
- Indian entities are the third largest community of financial firms at DIFC
- Indian investments in the UAE surpasses more than $70 billion

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• UAE