(Bloomberg) -- Real-time dollar settlement in India’s newest financial hub in Gujarat is likely to become operational later this year or by early 2025, according to a senior official, a step that could burnish the country’s appeal to foreign investors. 

The service which will cut down on times and delays, and it would be available for financial firms in Gujarat International Finance Tec-City, Prime Minister Narendra Modi’s flagship project. It would speed up transactions at a time when foreigners are showing greater interest in India and its sovereign bonds are due to be included into JPMorgan Chase & Co’s emerging market index. 

“If your cash movement become faster and more efficient, then it will have a positive ripple effect upon the rest of the market,” K Rajaraman, chairman of International Financial Services Authority, told Bloomberg News in an interview. The IFSCA regulates the hub, also known as GIFT City, and which offers stocks, currency and derivatives trading. 

Rajaraman added that the real time settlement system will promote greater efficiency.

India imposes capital controls and has a myraid tax structure, both of which have been eased for this financial hub so that it can emerge as an alternative trading center to Singapore and Dubai. 

Last year, the Reserve Bank of India started a domestic non-deliverable forward market settled in dollars at GIFT City. Some foreign banks are already offering derivative products to investors who want exposure to India without necessarily having to set up shop. 

Globally, there are efforts underway to make sending money across borders faster and less complicated. Currently, most cross-border transactions rely on a network of correspondent banks, which can make settlement expensive and lead to delays. 

One such example is the Bank for International Settlements’s mBridge project, which uses blockchain technology for instant settlement. 

--With assistance from Subhadip Sircar.

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