BSE Introduces Sensex Derivative Contracts at GIFT City for Global Investors

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Last Updated: 4th February 2025 - 12:30 pm

2 min read

The Bombay Stock Exchange (BSE) has launched Sensex derivative contracts at the International Financial Services Centre (IFSC) in GIFT City, Gujarat. This move aims to enhance global participation in India's financial markets by offering a tax-efficient trading avenue.

Key Features of the New Sensex Derivative Contracts

The newly introduced derivatives are denominated in US dollars and will be traded on the India International Exchange (India INX), BSE’s dedicated exchange at GIFT-IFSC. A significant advantage of these contracts is their 22-hour trading window, enabling international traders to participate in the Indian market with greater flexibility.

Tax Benefits at GIFT City

One of the primary incentives for launching these contracts at GIFT City is the favorable tax environment. Investors trading at the IFSC enjoy several benefits, including:

  • No Securities Transaction Tax (STT)
  • No Capital Gains Tax
  • No Stamp Duty


These advantages make GIFT City an attractive destination for institutional and retail investors looking to trade in Indian financial instruments with minimized tax liabilities.

Contract Specifications and Settlement Details

The minimum investment size for the Sensex derivatives is set at $1, making it accessible to a broad range of investors. The contracts follow a three-month trading cycle, with settlements occurring in cash and denominated in US dollars. The final settlement date for each contract falls on the last Tuesday of the contract month.

BSE’s Vision for GIFT City Expansion

At the launch event, BSE Managing Director and CEO Sundararaman Ramamurthy emphasized the growing significance of GIFT City as a global trading hub. He highlighted that India INX recorded an average daily turnover of $206 million in FY25, indicating a robust appetite for international trading activities.

BSE's introduction of Sensex derivatives is expected to strengthen its position in the global derivatives market and provide international investors with better exposure to India's economic growth.

Competition with NSE’s GIFT Nifty

The BSE’s move follows a similar initiative by its rival, the National Stock Exchange (NSE), which offers Nifty index-based derivative contracts at GIFT City. In July 2023, the SGX Nifty was rebranded as GIFT Nifty after its migration to NSE’s International Exchange (NSE IX). Since its transition, GIFT Nifty has seen substantial growth, with an average daily turnover of $95 billion in January 2025.

With this latest development, BSE aims to tap into the rising demand for Indian equity derivatives in global markets, positioning Sensex futures as a viable alternative to NSE’s Nifty-based products.

Conclusion

The introduction of Sensex derivative contracts at GIFT City marks a crucial step in expanding India’s financial footprint on the global stage. The extended trading hours, tax benefits, and seamless settlement process make these contracts an attractive proposition for international investors. As BSE competes with NSE’s GIFT Nifty, the evolution of India’s offshore financial hub in GIFT City is expected to unlock new opportunities for traders and investors alike.

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