With the Government of India’s commitment to fostering a vibrant financial services sector, entities are now leveraging the International Financial Services Centre Authority (IFSCA) regulatory body. The recent introduction of the International Trade Financing Services (ITFS) initiative, promoted by the IFSCA, has opened up innumerable possibilities for businesses across industries. The Gujarat International Finance Tec-City (GiFT City) in Gandhinagar is at the forefront of this initiative.
KredX is privileged to have been granted a license by IFSCA to set up the ITFS platform at GIFT city. This makes it easier for business owners to access the benefits of ITFS and IFSCA through the KredX Global Trade Exchange (GTX) platform. It is a major step on the government’s part to encourage businesses to finance and trade internationally. The International Trade Finance Scheme (ITFS) is what makes this possible, allowing companies to access credit facilities from registered ITFS providers like KredX.
In this article, we will explore:
- What ITFS and IFSCA are
- How they are supporting businesses through GIFT City
- How businesses can benefit from ITFS and IFSCA
- How KredX fits into the picture, the advantages of using KredX as part of the ITFS platform, what you can do with it, and how you can take advantage of its offerings.
What is Trade Finance?
Trade finance is a type of financial product that provides businesses with access to financing for the purchase, sale, and transportation of goods between countries. It can be used to facilitate international transactions in which a business needs to finance the purchase or sale of goods or services outside of its own country. The most common forms of trade finance are documentary credits, loans, guarantees, receivables financing, and factoring.
- Estimated market in 2022 – USD 61.04 Bn
- Forecasted market in 2027 – USD 85.85 Bn
- CAGR of 7.06%
- Estimated market in 2022 – USD 2.75 Billion in 2022
- Forecasted market in 2027 – USD 3.88 Billion by 2027
- CAGR of 7.1%
Understanding The International Trade Finance Scheme (ITFS)
As a business owner, you need access to financing to grow and succeed. The ITFS is an initiative that provides easy and low-cost access to capital for importers and exporters from registered ITFS platforms like KredX. Through the ITFS framework, businesses can benefit from reduced lending rates, flexible repayment terms, and access to credit risk insurance. This scheme has helped businesses in India become more competitive internationally by allowing them to increase their export volumes.
IFSCA and GIFT City Ahmedabad
The International Finance Services Centers Authority (IFSCA) was established by the Government of India in 2018 as a way to streamline financial operations across international borders. It brings together the banking sector, foreign exchange markets, and other financial players into one unified regulatory body. IFSCA ensures greater transparency in financial transactions between Indian and international entities by reducing bureaucracy and compliance costs.
Another groundbreaking development is the Gujarat International Finance Tec-City (GiFT City). This massive project is aimed at transforming Gujarat into an international finance hub with world-class infrastructure, technology solutions, and a regulatory framework. GiFT City aims to bring innovative digital banking solutions that make it easier for Indian businesses to access global capital markets. This will create new opportunities for investments, job creation, economic growth, and increased business revenues.
In order to facilitate the smooth running of ITFS in India, the Government has established a regulatory framework through the International Financial Services Center Authority (IFSCA). IFSCA regulates all activities that take place within GIFT City Ahmedabad – Gujarat International Finance Tec-City – an integrated area dedicated to innovative international financial services. This special zone provides an ecosystem of world-class infrastructure and legal provisions conducive to global business operations.
How KredX GTX Supports Businesses Through ITFS
In today’s globalized world, businesses rely on international trade to expand their reach and increase their profits. However, one of the biggest challenges associated with international trade finance is accessing the capital needed to cover the costs of goods and services bought/sold abroad. With KredX Global Trade Exchange (GTX), businesses no longer have to worry about this as they can access quick and easy financing through the ITFS Platform. KredX GTX is a cutting-edge platform that offers a suite of solutions designed to meet the needs of importers, exporters, and other stakeholders in international trade finance.
KredX is one of the companies selected by the Government for its expertise in financial services. It offers customers a secure platform to make use of ITFS through customizable options tailored to their needs. For example, if you’re looking for a loan or trade finance arrangement, KredX can help you find competitive rates from registered lenders or financiers within GIFT City Ahmedabad or elsewhere in India or abroad.
Through the ITFS framework, GTX makes it easier for businesses to unlock trade finance options. By submitting their invoices on the platform, companies can receive immediate funding from banks or NBFCs who are willing to buy the invoices at a discounted rate. This helps businesses gain quick access to working capital while managing their cash flow more efficiently. As all transactions take place on a secure and trusted digital platform, there’s no need for manual paperwork or long waiting periods for approvals.
You can also monitor all your transactions on the KredX GTX platform so that you know exactly how much capital is flowing in and out of your business accounts at any given time. Plus, KredX’s customer service team is available around the clock should you require assistance setting up your accounts or managing your transactions more efficiently.
What You Can Do with GTX: The Big Picture
By leveraging the GTX platform, businesses can unlock opportunities around the world without having to worry about costly paperwork or restrictions. You can get instant access to capital for investment in foreign markets or financing imports/exports globally.
This allows you to get access to the funds quickly without having to go through lengthy application processes at traditional banks or lenders. Moreover, this also helps reduce transaction fees by streamlining payment processes between two countries that are part of different banking systems – making it easier for cash flow across borders for both buyers and sellers alike.
Additional benefits of using GTX for business owners looking to manage their global operations more efficiently include:
Improved risk management
The ITFS framework provides improved risk management. With the aid of the IFSCA’s ITFS initiative, businesses can manage and mitigate risks associated with currency fluctuations, political uncertainty, and compliance issues. By leveraging advanced analytics solutions, KredX GTX provides companies with more accurate information about potential risks in their supply chain and helps them manage these risks more effectively. This helps them avoid losses due to unexpected events such as exchange rate fluctuations or supplier defaults.
Access to financing
GTX can provide businesses with access to additional capital that they may not qualify for through traditional lending institutions due to stringent requirements or high-interest rates charged on regular commercial loans. This can help businesses fund larger orders that would otherwise be too costly to obtain financing for, enabling them to better manage their global trading activities.
GTX eliminates the need for multiple approvals from banks and other lenders – making it easier and faster for businesses to complete their international transactions without having to worry about long processing times or delays due to bureaucratic processes involved with traditional banking operations.
Improved cash flow management
GTX helps financiers better manage their cash flow by providing them with immediate access to funds upon completion of their international deal – reducing turnaround times significantly compared with waiting periods associated with traditional bank transfers between countries – thus allowing more flexibility without having to worry about money getting tied up in bureaucracy or processing delays overseas.
Lower transaction costs
KredX GTX offers cost-saving opportunities for businesses looking to streamline their entire process when trading internationally. By removing unnecessary intermediaries from the equation, businesses can streamline the costs associated with cross-border transactions and enjoy a more efficient process overall. This eliminates paperwork, waiting times, and other issues that often come up during international trade finance activities such as port clearance delays and customs duties fees, etc. All these factors contribute towards reduced transaction costs for businesses using the KredX GTX platform..
Flexibility and scalability
As businesses grow, so do their needs for financing options that are flexible and scalable enough to meet their changing requirements over time. With KredX GTX, companies can quickly adjust repayment terms according to their specific requirements without having to go through complicated processes or wasting valuable time waiting for approvals from banks or other traditional lenders. This allows business owners to make decisions quickly while reducing costs associated with long-term borrowings and compliance requirements significantly.
Saddam Hussain is a digital marketing and supply chain finance expert with over a decade's working experience. He specializes in areas such as invoice discounting, working capital management, cash flow forecasting, and risk mitigation and is passionate about sharing his knowledge and expertise with others. His writing is clear, concise, and accessible to both finance professionals and business owners. He believes supply chain finance is a crucial component of any successful business. His goal is to empower readers with the knowledge and tools they need to achieve these goals. When he's not writing or consulting, he enjoys traveling and trying new foods. You can reach him through LinkedIn or Twitter for a quick chat.