What has once been a largely untapped land in Gujarat is becoming one of India’s most ambitious financial hubs. GIFT City, or Gujarat International Finance Tec-City, is about to be a world-class financial centre that is attempting to become a gateway to global financial markets for India.
Sanjay Kaul, GIFT City MD & CEO, said that the financial hub has reached a very strategic stage in its development but is still at a rather early stage compared to the world's top global markets like Singapore and Dubai.
Kaul described GIFT City as at an “inflection point” with rising registrations, expanding financial products and more international firms.
The financial hub has crossed $111 billion in assets and now hosts more than 40 banks. Half of these are international banks, highlighting the growing global interest in India’s International Financial Services Centre (IFSC).
More than 40 banks operate from GIFT City
Banking is still one of the most important pillars of the GIFT City ecosystem.
More than 40 banks are working from the financial hub, with about half international banks. Some of these institutions don’t have branches in mainland India but are located at the IFSC, Kaul said.
The structure allows GIFT City to operate under a separate financial-services framework within India's foreign exchange regulatory environment.
This distinction is critical for international financial institutions looking to serve India’s economy while operating under a framework specifically for international financial activities.
Nearly 1,200 Entities Registered
GIFT City is not restricted to banks.
The ecosystem now includes companies and institutions in banking, insurance, reinsurance, fund management and capital markets. The financial hub also houses stock exchanges, including the NSE and BSE subsidiaries, as well as a bullion exchange.
Kaul said the regulator has registered close to 1,200 entities at GIFT City.
Registrations are happening at around 40 to 45 entities every month, showing the growing size of the ecosystem, we have heard.
If this pace is sustained, the number of financial and related entities that will be operating from GIFT City will increase significantly in the next few years.
Aircraft Leasing Now Comes into Play
Aircraft leasing has become another important business division in GIFT City.
The sector is usually associated with major international financial centres, particularly Ireland. India's bid to develop aircraft leasing capabilities within GIFT City does so to bring more of this financial activity into the country.
Such a development will also bolster India's very fast-growing aviation market.
As the airline industry grows in India and carriers add aircraft to their fleets, having a domestic financial center capable of supporting aircraft financing and leasing could create opportunities for banks, investment firms and specialist financial institutions.
GIFT City wants to compete with Singapore and Dubai
The bigger goal for GIFT City is to be able to compete with large international financial centres.
Singapore and Dubai have created a strong position as gateways for global capital, financial services and cross-border business. GIFT City is trying to develop a similar role for India.
But Kaul feels that India's biggest advantage is the country's underlying economic growth and its huge talent and technology base.
India is now one of the most rapidly growing economies in the world and its capabilities in technology, innovation and global business services have grown substantially.
GIFT City is thus a proposition that combines the country’s economic potential with a specialized international financial services ecosystem.
India is GIFT City's biggest differentiator
As an international business with a focus on India, GIFT City will offer a good place for them to get access to India’s financial and economic opportunities through an internationally oriented financial centre.
Kaul argues that India’s scale itself provides GIFT City with an advantage.
The large consumer market in the country, the growing capital markets, technology ecosystem and increasing need for financial services could provide a strong foundation for the centre’s long-term development.
The aim is not only to attract foreign institutions to India, but also to encourage Indian financial activity currently happening in overseas financial centres to move back to the country.
Still a ‘Toddler’ Compared With Global Financial Centres
Despite the rapid progress, Kaul said GIFT City is still significantly younger than other financial centres established.
In describing GIFT City as a “toddler,” he said the centre is still learning from mature global markets.
Singapore, Dubai, London and other international financial hubs have built deep ecosystems of banks, asset managers, insurers, exchanges, legal firms and professional services companies over the past decades.
GIFT City will have to build that depth and the kind of ecosystem that attracts international investors and financial institutions in the future.
The road ahead for GIFT City:
GIFT City’s growth will be influenced by a range of factors such as regulatory effectiveness, infrastructure development, international participation, and the ability to keep bringing in globally competitive financial products promptly.
With increasing banking, capital markets, insurance, fund management, bullion trading, aircraft leasing, and so on, the ecosystem is becoming much more diversified.
With over 40 banks, more than 1,200 registered entities and over $111 billion in assets, GIFT City has already moved well beyond its early development stage.
The bigger question now is whether it can evolve from India’s emerging international financial centre into a genuinely global financial hub.
For Kaul, the journey has only begun. GIFT City’s “toddler” phase could eventually become the foundation for India’s long-term ambition to establish a stronger presence on the global financial map.
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