India’s economic partnership with the Shanghai Cooperation Organisation (SCO) and Eurasia is set for a boost next week with the inauguration of the Astana International Financial Centre (AIFC) in the capital of Kazakhstan.
About AIFC (Astana International Financial Centre):-
- AIFC is positioning itself as a financial hub for Central Asia, the Caucasus, the Eurasian Economic Union, West Asia, western China, Mongolia and Europe.
- AIFC will be based on the principles of English law, offer a preferential tax regime and house an independent financial court. A key feature will be tax exemption for 50 years. That covers corporate income tax on income from financial and auxiliary services, individual income tax, land tax and property tax.
- Also on offer are rent-free offices for two years, which should encourage Indian business enterprises planning to explore markets in the resource-rich region.
- AIFC plans to promote the development of the asset management industry not just in Kazakhstan, but in the region as a whole.
- Fintech industry is yet another area that the AIFC is seeking to attract, with modern infrastructure, flexible regulations and investment promotion.
- Besides, AIFC is providing opportunities to Indian private banks to open units to tap the Eurasian market.
Opportunity for India :-
- India’s primary objective is to develop a liquid and well-balanced capital market with a broad range of financial instruments.
- The Bombay Stock Exchange is hoping to establish its footprint through AIFC as part of India’s Eurasia outreach.
Advantages :- It include a :-
- Significant amount of funds available for management
- Favourable tax climate
- Economic and political stability.
India-Kazakhstan (Capital – Astana) relations :-
- Astana and Delhi are connected via direct flights on four days a week.
- The last two years have seen the India-Kazakhstan partnership strengthening with bilateral trade increasing by 53% to touch nearly $1 billion in the last financial year.
- Kazakhstan also plans to connect with ports in eastern India via the Kazakh-Turkmen-Iran rail line and Bandar Abbas port to push bilateral trade to $2 billion annually.
- The AIFC opportunity is complemented by efforts by both countries to establish connectivity through rail and road links besides dedicating terminals to shipments from Kazakhstan in western Indian ports.