GIFT City has made commendable progress in building world-class infrastructure, attracting global financial players like Spec Finance, HSBC, JP Morgan, Kotak Mahindra, and ICICI Bank.

New Delhi (ABC Live): The Gujarat International FinanceTec-City (GIFT City) is one of India’s most ambitious urban projects, aiming to create a global financial and technology hub. Strategically located between Ahmedabad and Gandhinagar, GIFT City is designed to attract international businesses, financial services, and fintech companies. While it offers promising infrastructure and regulatory advantages, its progress can be better understood when compared to established global financial centers like Dubai International Financial Centre (DIFC), Singapore’s Financial District, and Hong Kong. This report examines how GIFT City is functioning, its achievements, challenges, and compares it to global hubs with a focus on the companies that are currently operating within it.

1. Infrastructure and Urban Design: GIFT City vs. Global Competitors

State-of-the-Art Infrastructure
GIFT City boasts world-class infrastructure with modern office buildings, residential complexes, smart city technologies, and a focus on sustainability. The city has been developed with underground utilities, high-speed internet connectivity, and green building certifications. Prominent companies like HSBC, JP Morgan, Bank of America, Spec Finance and ICICI Bank have already established their presence, taking advantage of the cutting-edge facilities offered.

When compared to global competitors like the Dubai International Financial Centre (DIFC) and Singapore’s Financial District, GIFT City’s infrastructure is still in the process of full realization. DIFC hosts over 2,400 companies, including global giants like Goldman Sachs, Standard Chartered, and Barclays, while Singapore’s Financial District is home to numerous multinational corporations, including Citigroup, DBS Bank, and JPMorgan Chase. While GIFT City’s infrastructure is impressive, it faces challenges in achieving the level of global recognition and business density seen in these mature hubs.

Smart City Features
GIFT City integrates smart city technologies such as intelligent traffic management, energy-efficient systems, and sustainable urban planning. The city aims to be a model of green development, with advanced waste management, solar energy, and water conservation systems. These features align with global leaders like Singapore, which is widely regarded as a pioneer in smart city technologies, and Dubai, which has also integrated numerous smart city initiatives within DIFC. However, GIFT City is still in its developmental stages, and while it has the potential, its infrastructure and smart features need to mature to compete on the same level as these established cities.

2. Regulatory Framework: GIFT City’s Competitive Edge and Gaps

India International Financial Services Centre (IFSC)
The India International Financial Services Centre (IFSC) in GIFT City offers an internationally competitive regulatory environment. It provides tax exemptions, relaxed capital controls, and simplified compliance for financial institutions, making it attractive to businesses in the financial sector. Companies such as Spec Finance, HSBC, Yes Bank, and Kotak Mahindra Bank have set up operations in GIFT City’s IFSC, taking advantage of these benefits.

In comparison, Dubai International Financial Centre (DIFC) offers similar tax and regulatory advantages, and it is home to over 2,400 active companies, including Deutsche Bank, Barclays, and Goldman Sachs. Hong Kong’s financial regulations have long been seen as a global benchmark, with a flexible and investor-friendly legal framework that attracts firms such as HSBC and Morgan Stanley. GIFT City, while competitive, still faces challenges in clarifying and fine-tuning its regulatory framework to attract more international businesses at the same scale as its competitors.

Tax Incentives and Financial Services
GIFT City provides significant tax benefits, including exemptions for units operating in the IFSC for up to 10 years, aimed at boosting financial services, insurance, and fintech companies. However, Singapore has a well-established regulatory environment that facilitates ease of doing business, with companies like Citigroup, DBS Bank, and UOB benefiting from its sophisticated financial infrastructure. While GIFT City offers attractive incentives, it still has to develop its reputation to match the established financial services networks seen in Singapore or DIFC.

3. Business Ecosystem and Job Creation: GIFT City vs. Global Hubs

Attracting Global Players
GIFT City has made significant strides in attracting both domestic and international businesses. Notable companies such as HSBC, ICICI Bank, HDFC Bank, Kotak Mahindra, and Citi Bank have already set up their offices in the city. These companies benefit from the city’s regulatory framework, lower tax rates, and access to India's growing financial services market. Additionally, fintech companies such as MobiKwik and PhonePe have started establishing a presence, helping GIFT City build a diverse business ecosystem.

However, when compared to DIFC and Hong Kong, GIFT City’s growth has been slower. DIFC hosts companies like Standard Chartered, American Express, and HSBC, providing a high degree of financial connectivity. Hong Kong continues to be a major financial hub for firms like JP Morgan, Goldman Sachs, and Nomura, offering a level of liquidity, market depth, and networking opportunities that GIFT City is still working to establish.

Job Creation and Talent Development
GIFT City has the potential to generate a large number of jobs, particularly in finance, technology, and operations. It is already home to a growing workforce, with companies like HSBC and ICICI Bank offering employment opportunities in financial services. The city is also nurturing a talent pool for fintech and tech startups, including PhonePe and MobiKwik, which are benefiting from the city’s innovation-driven ecosystem.

However, GIFT City faces challenges in talent retention and local skill development. While Singapore has a well-established talent pool, fueled by collaborations between top universities and global businesses, GIFT City still relies heavily on talent from outside Gujarat. Similarly, Hong Kong benefits from a highly skilled workforce, attracting talent from around the world. GIFT City will need to ramp up its educational and skill-building programs to ensure a local workforce that meets the demands of the financial and tech sectors.

4. Challenges: GIFT City’s Struggles to Compete Globally

Slow Adoption and Underutilization
Despite its state-of-the-art infrastructure, GIFT City struggles with slow adoption. Many of its office spaces remain vacant, and some residential projects are yet to achieve full occupancy. DIFC and Singapore’s Financial District do not face similar issues, as both are home to thousands of businesses with high occupancy rates in commercial and residential spaces. The slow pace of development and underutilization in GIFT City reflect the challenge of attracting enough businesses to make the city self-sustaining.

Competition from Global Hubs
GIFT City competes with established global financial hubs such as Singapore, Dubai, and Hong Kong, which already have mature ecosystems. Singapore’s financial services market is deeply integrated into the global economy, attracting multinational corporations like Citigroup, DBS Bank, and UOB. Dubai’s DIFC, with its favourable business environment, boasts a broad range of international companies, including Goldman Sachs, Barclays, and American Express. GIFT City, while competitive, is still working to build the global recognition needed to compete at the same level.

5. Future Opportunities: GIFT City’s Path to Global Competitiveness

Fintech and Innovation Hub
GIFT City’s focus on emerging technologies such as fintech, blockchain, and AI offers a significant opportunity for growth. The Indian government’s push for digitization and the growth of India’s digital economy makes GIFT City an attractive destination for technology-driven businesses. Companies like PhonePe, Razorpay, and MobiKwik could further develop in GIFT City, establishing it as a fintech hub similar to Singapore and Hong Kong, both of which have become leading centres for fintech innovation.

Sustainability and Green Growth
GIFT City’s commitment to sustainability with green buildings, renewable energy projects, and eco-friendly infrastructure can differentiate it in the global marketplace. With an increasing global focus on sustainability, GIFT City can attract eco-conscious investors and businesses looking for a green urban environment. This focus on sustainability places GIFT City in alignment with global trends, particularly in comparison to the green initiatives taken by Singapore, which has set a high standard in sustainable urban development.

Conclusion

GIFT City has made commendable progress in building world-class infrastructure, attracting global financial players like Spec Finance, HSBC, JP Morgan, Kotak Mahindra, and ICICI Bank. However, when compared to established financial hubs such as DIFC, Singapore, and Hong Kong, GIFT City still faces challenges in terms of global recognition, infrastructure utilization, and competition for talent. To become a truly global financial and technology hub, GIFT City must focus on attracting more international companies, improving talent development, and ensuring policy consistency. With the right investments in innovation, sustainability, and regulatory clarity, GIFT City can fulfill its potential to become a leading destination for global business and finance.