Central Government Notifies SEZ Rules 2026: IFSCA Administrator Empowered to Issue Form GA for GIFT City IFSC Units

What was decided

The Central Government notified the Special Economic Zones (Amendment) Rules, 2026 vide Notification No. G.S.R. 114(E) (F. No. K-43014/3/2024-SEZ) dated 3rd February, 2026, published in the Gazette of India (Extraordinary), in exercise of powers conferred under Section 55 of the Special Economic Zones Act, 2005. The notification was issued by the Ministry of Commerce and Industry.

The operative change is narrow but consequential: the amendment inserts sub-rule (1A) in Rule 19 of the Special Economic Zones Rules, 2006, and a standardized format titled "Letter of Approval – Form GA" has been inserted after Form G in the principal rules. Rule 19 of the SEZ Rules governs how a Letter of Approval (LoA) — the entry permit a business needs before it can operate as an SEZ unit — is granted.

Which body decided, and what exactly it empowers

Under the new sub-rule, the Administrator (IFSCA) shall issue a Letter of Approval (LoA) in Form GA for setting up a unit in an International Financial Services Centre. Previously, IFSC-based units in GIFT City had to route through the general SEZ approval formats used for ordinary export-oriented SEZ units; approval mechanisms for SEZ units were governed under existing formats that were not written specifically for financial-services entities.

The new Form GA is issued from a specific office: the Form GA will be issued by the Office of the Administrator (IFSCA), International Financial Services Centres Authority (IFSCA), located at GIFT Multi-Services SEZ, Gujarat. This confirms GIFT City's Multi-Services SEZ as the seat of the approving authority for this specific power, even though IFSCA itself regulates IFSC units across sectors.

Coverage is explicit to GIFT City: the new Form GA specifically applies to units being established in the Gujarat International Finance Tec-City (GIFT City) IFSC, which operates as a multi-services Special Economic Zone.

Operative details: validity period and conditions

The amendment sets a two-stage validity clock for the Form GA Letter of Approval:

• Initial phase: the Letter of Approval will be valid for one year from the date of issue for implementation of the project. Units must commence operations within this period or within an extended period, if granted.
• Post-commencement phase: the approval remains valid for five years from the date of commencement of operations.

Beyond the timeline, the rules attach standard SEZ compliance conditions to every Form GA holder:

• Units are required to export financial services in accordance with the SEZ Act, 2005 and SEZ Rules, 2006, and more specifically units must undertake export of financial services for a period of five years from the commencement of authorised operations, in line with the SEZ framework.
• Execution of a Bond-cum-Legal Undertaking is mandatory.
• All statutory and regulatory approvals from the concerned authorities, including IFSCA, must be obtained before operations commence.
• Units must meet pollution control norms and all applicable statutory requirements, and are permitted to import or procure goods from the Domestic Tariff Area (DTA), except prohibited items under ITC (HS) classification.
• Per compliance guidance published alongside the rule change, acceptance of the LoA terms and conditions must be communicated within 45 days, and non-compliance may result in cancellation of approval.

Effective date and legislative lineage

The rules took effect immediately on gazetting: the new rules came into force from the date of publication in the Official Gazette, i.e. 3 February 2026. This is not a first-time rulebook; the Special Economic Zones Rules, 2006 were originally notified in February 2006 and were last amended in June 2025. The February 2026 change is thus one amendment in a continuing series, but the first to carve out a dedicated approval form for IFSC units rather than leaving them under generic SEZ unit formats.

Practical effect for GIFT City

For a business incorporating in GIFT City's IFSC — a bank, fund manager, insurer, or fintech applying for regulatory registration — the practical change is procedural clarity rather than a new tax break or land allocation. By clearly assigning approval powers to the IFSCA Administrator, the amendment enhances administrative clarity and reduces procedural ambiguity for financial services entities seeking to establish operations in GIFT City. Previously, applicants and their advisors had to map generic SEZ Rule 19 approval formats onto financial-services activity; now there is a single, purpose-built Form GA and a single office (the IFSCA Administrator at GIFT Multi-Services SEZ) responsible for issuing it.

The change sits within a busier package of 2026 IFSCA/SEZ reforms — including budget-linked tax refinements to Section 80LA deductions and other IFSC circulars — but it does not itself alter tax rates, land parcels, or zone boundaries in GIFT City. It is a governance and process notification, not a fiscal or land-use one.