On the banks of Sabarmati River, who imagined, there will exist a complete financial city.
Laid across in more than 886 acres or 359 hectares (proposed) of a barren land for decades now, can be transformed into the country’s very first greenfield integrated city.
As a dream project imbibed by Prime Minister Modi in 2007, closer to the very capital of Gujrat, just 7kms from Gandhinagar, banks, exchanges and firms offering finance operations as a service have set up their global operations on this land.
He asserted while inaugurating the project: “In 10 years from now, GIFT city should become the price setter for at least a few of the largest traded instruments in the world, whether in commodities, currencies, equities, interest rates or any other financial instrument.”
This came to be known as Gujarat International Finance Tec City (GIFT City) which became the first and only International Financial Services Centre (IFSC) of India.
GIFT City represent promise of India: @narendramodi @PMOIndia @nsitharamanoffc @nsitharaman @FinMinIndia @CMOGuj @VibrantGujarat pic.twitter.com/eCosqRdbFJ
— GIFT City (@GIFTCity_) December 4, 2021
What is an IFSC?
An IFSC provides financial services and facilitates the flows of finance to its customers beyond the territory of any country.
A few global financial centers include London, New York, Singapore and certain emerging ones like Shanghai.
While we try to promote Swadeshi, GIFT city IFSC, as per its CEO and MD, “brings back the financial services and transactions” which were earlier functioned out of the country, at offshore financial centers.
These composed of Indian corporate entities, including the overseas branches and subsidiaries of financial institutions to India by offering world class infrastructure and globally benchmarked regulatory environment.
Functions fulfilled by IFSC:
It helps raise and aggregate capital and liquidity for individuals, corporations as well as governments.
They help manage assets and global portfolios by diversifying them through pension funds, insurance companies and mutual funds.
Tax optimization and management, including the cross-border tax opportunities for intermediaries and accounting firms.
Risk management and minimization operations such as insurance, reinsurance etc.
It oversees efficient mergers and acquisitions in between trans-national corporations.
With greater ambitions fulfilled, nearly 200 entities have begun operating here with more than 12,000 people in these offices.
110 buildings within a future urban complex will have a 5,800,000 m2 (62,000,000 sq ft) of built-up area. Of this, around 67% will be commercial, 22% will be residential and 11% is to cater to social facilities.
What’s in it for the firms now?
The Government of India has opened its pandora of exemptions for the firms those settle in the GIFT city.
“Thanks to the Central Government’s proactive support to develop the country as a hub of international financial services, the GIFT City has emerged as the preferred location for national and multinational firms,” explains an official operating in the GIFT city.
The project has turned an entire city into providing multi-services, being a Special Economic Zone (SEZ) with benefits like 100% freedom from GST, stamp duty and even 100% exemption on business income for next 10 years.
Even IFSC prompted exemptions like tax holiday for capital gains in case of aircraft leasing companies, exemptions for payment made to the aircraft lease rentals, for the re-entry of foreign funds in IFSC etc.
As per the chief Minister Bhupendra Patel: “I want to tell all the financial institutional investors, fintech firms and start-up units that till now if you have entered the GIFT City, then you should think in that direction positively.”
“In GIFT City you will get world class infrastructure.”
This project also has provided an exclusive domestic tariff area (DTA) spread over 625 acres.
This has led to even BSE and the NSE crowd in their international stock exchanges to the city, composing nearly17 banks, more than a hundred broking services, non-life reinsurance firms etc.
Ranging from 5-star Hotels to even a hospital, Business towers as well as educational centers, all find place here.
Apart from these, even amenities like water treatment, cooling infrastructure, waste collection and segregation plant etc., have been placed.
There has also been a proposition for a metro train line which is being built between Gandhinagar and Ahmedabad.
“Investments worth Rs 11,000 crore from 140 companies have been committed to GIFT City. Moreover, the average daily turn-over on international exchanges within GIFT City have exceeded USD 4 billion”.
Enjoying this privilege structure, GIFT city has gained a greater significance in the eyes of the world. The latest 2020s Global Financial Centers Index drafted in London, has placed the GIFT City IFSC right amongst the top among 15 centers globally.