The Bombay Stock Exchange (BSE) has introduced Sensex derivative contracts at the International Financial Services Centre (IFSC) in GIFT City, Gujarat. This move allows foreign investors to trade India’s benchmark equity index without currency conversion risks. These contracts, denominated in US dollars, will be traded on the India International Exchange (India INX), BSE’s dedicated stock exchange for GIFT-IFSC.
The minimum investment for Sensex derivatives is set at $1, with the final settlement day for each contract being the last Tuesday of the contract month. The contracts will follow a three-month trading cycle, with settlements carried out in cash, in US dollars. With a 22-hour trading window, these contracts enable international traders to engage with Indian markets across different time zones.
GIFT City offers several tax benefits, including exemptions from securities transaction tax (STT), capital gains tax, and stamp duty. The launch of these derivatives aims to provide global investors with a tax-efficient way to participate in the Indian market. At the launch event, BSE Managing Director and CEO Sundararaman Ramamurthy highlighted the competitive environment of GIFT City as an advantage for global investors.
India INX, BSE’s international exchange, recorded an average daily turnover of $206 million in FY24-25. Meanwhile, the National Stock Exchange (NSE) already offers Nifty-based derivative contracts at GIFT City through a partnership with the Singapore Exchange (SGX). In July 2023, the SGX Nifty was migrated to NSE’s International Exchange (NSE IX) and rebranded as GIFT Nifty. The GIFT Nifty has seen rapid growth, with an average daily turnover reaching $95 billion in January.
At the closing bell, the BSE Sensex dropped 319.22 points, or 0.41%, to settle at 77,186.74, while the Nifty was down 121.10 points, or 0.52%, to close the trading session at 23,361.05. The decline in the Indian share market is attributed to US President Donald Trump’s decision to impose a 25% tariff on imports from Canada and Mexico, along with a 10% duty on Chinese goods. Trump argues that these measures are necessary to protect American borders and curb illicit activities.
