India’s Gujarat International Finance Tec-City, known as GIFT City, symbolizes the nation’s commitment to intelligent, sustainable, and inclusive growth. This greenfield smart city, built from the ground up, is envisioned as a game-changer for India’s economic landscape.
Initiated in 2008 by then-Chief Minister Narendra Modi, GIFT City is strategically located between Ahmedabad and Gandhinagar and designed as a central business district that integrates commercial, residential, and social spaces.
In 2020, GIFT IFSC (International Financial Services Centre) secured the 10th position in the Finance Industry and claimed the top spot among emerging financial centers in the Global Financial Centres Index.
The Pillars of Success: What Makes GIFT City Unique?
GIFT City’s vision hinges on several key pillars that differentiate it from traditional financial districts:
- International Financial Services Centre (IFSC): The IFSC, India’s first, is the cornerstone of GIFT City. It allows financial institutions to operate under a globally benchmarked regulatory and tax framework, streamlining operations and making India a more attractive destination for foreign investments.
- Business-Friendly Environment: GIFT City offers many benefits to attract businesses, including simplified procedures, fast-track clearances, and a single window clearance system. Additionally, the city boasts a competitive tax regime, making it a financially attractive proposition for domestic and international companies. It has become a magnet for global financial services firms and has seen a significant influx of foreign direct investment.
- Smart City Infrastructure: GIFT City is a model for sustainable urban development. State-of-the-art infrastructure, including uninterrupted power supply, high-speed connectivity, and a sophisticated waste management system, ensures a smooth and efficient business environment. The city prioritizes a walk-to-work culture, with residential areas, social facilities, and entertainment options close to office spaces, fostering a healthy work-life balance for residents.
- Focus on Sustainability: GIFT City is being developed strongly committed to environmental responsibility. The city utilizes green building technologies, promotes energy efficiency, and prioritizes using renewable energy sources. It features India’s first district cooling system for energy-efficient climate control. The city also fosters electric mobility, with plans to increase its electric bus fleet, thus improving its residents’ and workforce’s quality of life.
Business Impact and Projected Numbers
Current Impact: GIFT City has catalyzed economic development, with over 15,000 employees across various sectors. It has drawn major financial players like Standard Chartered, Bank of America, Deutsche Bank, HSBC, JP Morgan, and Barclays. Additionally, it accommodates 35 fintech companies and two international stock exchanges witnessing an average daily trading volume of $30.6 billion and India’s inaugural international bullion exchange, with 75 jewelers already onboarded.
Foreign Direct Investment: According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), investors or funds located in GIFT City have injected $102 million in foreign direct investment (FDI) into India thus far, with the majority of this investment occurring during the fiscal year 2022-23. In contrast, during the same period, India received $17 billion in FDI from Singapore and $6 billion each from Mauritius and the United Arab Emirates (UAE).
Projected Growth: The city is expected to create approximately 1 million jobs (5 lakh direct and 5 lakh indirect). Plans are underway to expand the electric bus fleet to 50 and construct over 25,000 smart houses. The master plan includes an expansion to over 3,300 acres, incorporating more social infrastructure.
The Road Ahead: Challenges and Opportunities for GIFT City
While GIFT City has made significant progress, there are still challenges to overcome:
- Attracting Talent: Building a robust financial and technological hub requires a skilled workforce. GIFT City must focus on attracting and retaining top talent by offering competitive salaries, career growth opportunities, and a high quality of life.
- Building a Critical Mass: A thriving financial center thrives on a critical mass of businesses and financial institutions. GIFT City must continue attracting leading players across various financial sectors to create a dynamic and interconnected ecosystem.
- Global Recognition: GIFT City needs to establish itself as a credible and reliable international financial center as a relatively new player. Building strong relationships with established financial hubs and actively promoting its offerings will be crucial for global recognition.
Despite these challenges, the opportunities for GIFT City are immense.
- India’s Rising Economic Power: India’s economic growth story is far from over. GIFT City is well-positioned to capitalize on this growth by providing the infrastructure and regulatory framework for businesses participating in India’s economic boom.
- Shifting Global Landscape: The global financial landscape is constantly evolving. GIFT City’s focus on innovation and technology positions it well to adapt to these changes and emerge as a leader in the new financial ecosystem.
- Gateway to Asia: Strategically located in India, GIFT City has the potential to become a crucial gateway for international businesses looking to access the vast Asian market.
GIFT City exemplifies the aspirations of a new India, blending visionary thinking with mindful execution. It sets a global standard for smart cities, aiming to harmonize economic progress with environmental and social responsibility.
FAQs
What is GIFT City, and what makes it unique?
GIFT City, or Gujarat International Finance Tec-City, is India's first International Financial Services Centre (IFSC). Unlike traditional financial districts, GIFT City is a planned smart city focusing on global standards in regulations, taxation, and ease of doing business. It aims to attract leading financial institutions, technology companies, and skilled professionals by offering a world-class infrastructure and a business-friendly environment.
What are the benefits of setting up a business in GIFT City?
There are several benefits to setting up a business in GIFT City, including Simplified procedures and fast-track clearances for starting and running a business, a competitive tax regime with various exemptions and concessions, state-of-the-art infrastructure with uninterrupted power supply, high-speed connectivity, a sophisticated waste management system and access to a global financial market through the IFSC platform.
Who should consider investing in GIFT City?
GIFT City is a good option for various entities, including :
Financial institutions: Banks, insurance companies, asset management firms, and other financial service providers looking to tap into the Indian market and access global investors.
Technology companies: Startups and established firms seeking a collaborative environment for innovation and growth in the fintech sector.
International businesses: Companies looking for a gateway to access the vast Asian market with ease of doing business and global regulations.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
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