International Financial Services Centres Authority (“IFSCA”), in exercise of powers conferred under Section 12 and Section 13 of the International Financial Services Centres Authority Act, 2019, vide Circular No. F. No. 496/IFSCA/FC/SLF/2025-26/01,[1] dated April 07, 2025, issued an amendment to the framework for ship leasing and its relevant circulars (“Circular”).
The key highlights of the Circular are:
- The changes introduced through this Circular pertain to both the original Ship Leasing Framework issued on August 16, 2022, and the subsequent circular dated May 8, 2024, which outlined additional requirements for finance companies acting as lessors under the framework.
- One of the key changes relates to the clause on the currency for conduct of business. The amended provision shall now allow lessors to raise invoices in any foreign currency listed in the First Schedule of the IFSCA (Banking) Regulations, 2020. The payments against these invoices must be received in the lessor’s foreign currency account maintained with an IFSC Banking Unit.
- Lessors shall now be permitted to open Special Non-Resident Rupee (SNRR) accounts with authorised dealers in India, outside IFSCs, in accordance with Schedule 4 of the Foreign Exchange Management (Deposit) Regulations, 2016.
- Further, it has been clarified that applicants under the Ship Leasing Framework, or lessors registered under Regulation 3 of the Finance Company Regulations, shall not undertake transactions which result in the transfer, whether of ownership or leasehold rights of a ship or ocean vessel from an Indian resident to an IFSC entity if the vessel is to be used solely for providing services to persons resident in India within a single financial year.
- However, a crucial exception has been carved out from the above restriction. The abovementioned prohibition shall not apply in cases where the ship or ocean vessel being transferred to the IFSC entity is newly constructed and acquired from a shipyard located in India.
[1] https://ifsca.gov.in/Viewer?Path=Document%2FLegal%2F01-revision-circular-07-04-202507042025081210.pdf&Title=Amendment%20to%20the%20%E2%80%98Framework%20for%20Ship%20Leasing%E2%80%99%20and%20relevant%20circulars&Date=07%2F04%2F2025