To set the scene, Gujarat International Finance Tec City, or “GIFT City”, is situated in Gandhinagar, the capital of the State of Gujarat located just outside Gujarat’s largest city, Ahmedabad. GIFT City is about a thirty-minute drive from the Ahmedabad airport, which is roughly an hour’s flight from Delhi and Mumbai.
Gujarat itself is a state with a population similar to the UK at over 60 million and accounts for 8.3% of India’s GDP (ranking the 3rd largest state) and is forecast to double within 5 years. It is also a key element in the UK-India diaspora living bridge and with 1,600 miles of coastline is the state with the longest coastline in the country.
Gujarat itself is a state with a population of over 60 million, double the size of Texas’s 29 million residents. Similar to Texas though, the state is an economic powerhouse, accounting for 8.3% of India’s GDP (ranking the 3rd largest state) and forecasts to double within 5 years. It is the home of the current Prime Minister, Narendra Modi, who prior to becoming Prime Minister in 2014 served as the state’s Chief Minister, India’ Governor equivalent.
Ed Dixon, Executive Director, UK
GIFT City is a complete greenfield development focused on financial services and technology, providing a host of benefits to investors. Think of shiny high-rise buildings and new road infrastructure. See below for a variety of pictures that underline the fact that this is more than just an idea now. Legislation is in place to facilitate investment, which is reflected in the new buildings now being occupied by the likes of Bank of America, IBM, and other multinationals.
Michael Green, Executive Director & Senior Vice President, North America
GIFT is split into two areas, a general investment zone and then a special economic zone (SEZ), the latter of which allows foreign organisations to set up a branch under a separate regulator, International Financial Services Centres Authority (IFSCA), with amongst other things, a 10 year tax holiday over a 15 year period).
In order to create a world-class hub for financial services, the Finance Minister, Nirmala Sitharaman, announced in her Budget Speech in 2022 that GIFT would welcome foreign universities to set up campuses and bring world-class curriculum focused on STEM and subjects critical to the financial services sector.
With a UK perspective. GIFT is of interest for a few key reasons
- British (and foreign) universities can now set up here, in a way that is not (yet) possible elsewhere in the country. A few universities have announced their entry and others are interested and at various stages of interest;
- GIFT is positioning itself as a Global Capability Centre destination. A 10-year tax holiday makes this an attractive proposition and is what drove companies like Bank of America to invest;
- The UK’s strength in financial services makes this a natural destination through which to partner; whether that’s traditional financial services players or the fintech community; and
- Given the ease of exemptions from national law, GIFT is also positioning itself as an arbitration centre, outside the purview of the Indian legal system, allowing British / foreign lawyers to come and arbitrate in GIFT. This is a particular opportunity for British law firms given the reciprocity angle the UK offers.
Key takeaways
- The initiative is well thought through and implemented. It has wheels (as well as wings) and momentum with the full support of the local and national governments;
- The sentiment from the IFSCA team is positive. There are certainly some areas to work on, but there is a willingness to work through issues pragmatically and practically in order to make GIFT a success for investors.
- The real estate is of a high quality and the expansion of land allocation from the government gives this project serious legs. The road infrastructure is good and the metro will arrive in 2024 showing integrated town planning.
Recommendations
Seamless is providing feasibility studies for companies and universities assessing how GIFT might fit within their expansion plans in India. Our analysis covers both the market opportunity as well as the practical considerations, including tax and regulatory insights, and the build-out of initial budgets, which helps empower decision-makers to assess risks and make decisions. After some initial feasibility analysis, we strongly recommend visiting GIFT yourself and alongside our experts engaging the regulators to chart out the potential for your firm or university. Given that the jurisdiction has exemptions from some, but not all national laws, it is important that expectations are set at the outset.
