GIFT City: Key Takeaways for the Financial Sector

Gujarat International Finance Tec-City, or GIFT City, is India’s first operational smart city and International Financial Services Centre (IFSC). Strategically located between Ahmedabad and Gandhinagar in Gujarat, GIFT City aims to create a world-class financial ecosystem that rivals global financial hubs like Singapore, Dubai, and London.

With state-of-the-art infrastructure, favourable tax policies, and single-window clearances, GIFT City offers a seamless platform for financial services, fintech innovation, and global trading. Its development is a cornerstone in India's long-term strategy to integrate more effectively into international financial markets.

Basics of GIFT City

1. Location: Gandhinagar district, Gujarat, near Ahmedabad airport.

2. Established: Conceptualised in 2007; operational since 2015.

3. Area: Spread over 886 acres; 261 acres designated as SEZ.

4. Regulator: International Financial Services Centres Authority (IFSCA).

5. Core Services: Banking, capital markets, insurance, fintech, asset management.

6. Key Infrastructure: India INX (stock exchange), IIBX (bullion exchange), GIFT Nifty (international derivatives).

Importance for the Financial Sector

1. International Financial Services Hub
   GIFT City allows institutions to provide global financial services in foreign currencies under Indian jurisdiction. It operates as an "offshore" centre within India.

2. Ease of Doing Business
   Businesses benefit from a unified regulatory structure, minimal compliance burden, and streamlined approvals.

3. Fiscal and Tax Incentives

   • 10-year tax holiday within a 15-year period.

   • Exemptions from GST, Securities Transaction Tax (STT), and dividend distribution tax.

   • No capital gains tax on specific instruments.

4. Market Innovations

   • GIFT Nifty offers extended trading hours, aligning with global markets.

   • India INX provides a fast, 22-hour trading platform.

   • IIBX enables transparent bullion trading and import facilitation.

5. Technology and Fintech Growth
   Tech giants like Infosys and Cognizant have established advanced R&D and fintech centres in GIFT City, focusing on AI, blockchain, and cloud technologies.

6. ESG and Green Finance
   GIFT City has launched frameworks for ESG-linked transition bonds, making it a hub for sustainable finance.

Gujarat-Centric Advantages

1. Economic Boost: Creates jobs, attracts investment, and enhances Gujarat’s global image.

2. Municipal Finance Leadership: Gandhinagar listed bonds on NSE via GIFT City, setting a precedent for other Indian cities.

3. Real Estate Development: Rising demand for residential and commercial properties in the surrounding region.

4. Foreign Institutional Presence: Global giants like JPMorgan, HSBC, and Abu Dhabi Investment Authority (ADIA) have established a presence.

5. Infrastructure Connectivity: The upcoming metro line between Ahmedabad and GIFT City will boost accessibility and urban growth.

Challenges

1. Lifestyle and Social Infrastructure: GIFT City still lacks nightlife, cultural hotspots, and entertainment hubs that appeal to a global workforce.

2. Skilled Talent Migration: Attracting and retaining highly skilled professionals remains a challenge outside metro cities.

3. Policy Consistency: Long-term success depends on uninterrupted policy support and regulatory predictability.

The Road Ahead

1. Physical Expansion: Plans to acquire additional land to extend the city to over 3,300 acres.

2. Metro Connectivity: Enhanced transport links to major Gujarat cities will improve livability.

3. Fintech Incubation: More innovation hubs and regulatory sandboxes are being launched.

4. Global Integration: Increased collaboration with international financial centres, such as Abu Dhabi Global Market (ADGM), to promote cross-border activities.

Conclusion

GIFT City represents a bold and futuristic vision of India’s ambitions to emerge as a global financial superpower. By blending world-class infrastructure, regulatory ease, and financial innovation, it provides a fertile ground for businesses, investors, and governments to conduct international operations from Indian soil.

For Gujarat, GIFT City is more than an economic zone—it is a catalyst for urban transformation, employment generation, and global brand positioning. While social and operational challenges remain, the foundation laid by GIFT City has already begun reshaping India's financial geography.

With continued policy support, international partnerships, and infrastructure development, GIFT City is well on its way to becoming South Asia’s premier financial services gateway—anchored in Gujarat, powered by India, and connected to the world.

In case of any query regarding GIFT City: Key Takeaways for the Financial Sector, feel free to connect with our legal experts, Tulja Legal, at +91 96380-69905

About the Author

Anju S Nair

Legal Researcher | LLB, MA English| Corporate Lawyer | Business Enthusiast | Founder & CEO at iLawbook.

FAQs

1. What is GIFT City?

GIFT City is India’s first smart city and International Financial Services Centre located in Gujarat, developed to provide a global-standard financial ecosystem.

2. What services are available in GIFT City?

Banking, capital markets, insurance, asset management, fintech services, and bullion trading.

3. Who regulates GIFT City?

The International Financial Services Centres Authority (IFSCA) regulates all financial activities in GIFT IFSC.

4. What are the major tax incentives?

• 10-year income tax holiday.

• Exemption from GST, capital gains tax, and dividend tax.

• No stamp duty on certain financial transactions.

5. What exchanges operate in GIFT City?

• India INX: India’s first international stock exchange.

• IIBX: India’s international bullion exchange.

• GIFT Nifty: International index offering extended trading hours.

6. Which companies have set up in GIFT City?

Major institutions include JPMorgan, HSBC, Barclays, ADIA, Infosys, and Cognizant.

7. How does it benefit Gujarat?

Generates jobs, attracts investment, modernizes urban infrastructure, and boosts real estate and service sectors.

8. What makes GIFT City globally competitive?

Seamless regulatory framework, tax benefits, top-tier infrastructure, and international market accessibility.

9. Is GIFT City fully developed?

It is under continuous development, with significant progress in Phase 1 and rapid expansion underway in Phase 2.

10. What is the long-term vision for GIFT City?

To become a leading international financial centre for Asia, driving innovation, investment, and economic diplomacy.

References

1. GIFT City Official Website – https://www.giftgujarat.in

2. Economic Times. Looking to take your investments international? – Link

3. Times of India. Gujarat CM Lists Municipal Bonds at GIFT City – Link

4. Times of India. Infosys Opens New Development Centre at GIFT City – Link

5. Times of India. Cognizant Expands With Techfin Centre at GIFT City – Link

6. IFSCA – Official Regulator for GIFT IFSC – https://ifsca.gov.in

7. Press Information Bureau. Launch of International Bullion Exchange in GIFT City – https://pib.gov.in

8. Economic Times. IFSCA Unveils ESG-Linked Transition Bond Framework – Link

9. Financial Times. Inside India’s Plan to Rival Global Finance Hubs

10. Budget 2024–25 Speech – Highlights on GIFT City and IFSC Reforms