Context

• India is one of the fastest-growing economies in the world. The country needs to expand its economic and strategic activities globally and GIFT City, an emerging global financial hub and India’s first operational smart city, has a pivotal role to play in achieving this vision.

About GIFT city

• • Spread over 886 acres in Gandhinagar, Gujarat, GIFT City includes a multi-service Special Economic Zone (SEZ) which houses India’s first International Financial Services Center (IFSC).

• SEZ is a geographic area in which the business and trade laws are different from the rest of the country. 

• The objective of developing SEZs include increasing the balance of trade and attracting newer inward-investments into the country, and creating newer jobs. 

• Financial incentives are granted to those setting up SEZs and cover a wider gamut of benefits for investors across taxation, customs, labour regulations, etc.

• The social infrastructure in the city includes a school, medical facilities, a proposed hospital, GIFT City business club with indoor and outdoor sports facilities. 
• It also includes integrated well-planned residential housing projects making GIFT City a truly “Walk to Work” City. 
• GIFT is a smart city in every sense with various first-in-the-country initiatives in the field of urban infrastructure.

IFSC 

• India’s first International Financial Services Center (IFSC) has been operationalised in GIFT City.
• An IFSC would help to bring back the financial services and transactions to India that are currently carried out in offshore financial centers by Indian corporate entities and overseas branches/subsidiaries of financial institutions (FIs).
  • It would provide Indian corporations with easier access to global financial markets. 
  • It would also complement and promote further development of financial markets in India.

• IFSC aims to achieve this by offering a business and regulatory environment that is comparable to other leading international financial centers like London and Singapore.
• GIFT IFSC provides services related to capital markets, offshore insurance, offshore banking and asset management, aircraft and ship leasing, and ancillary services.
• As the dynamic nature of business in the IFSCs requires a high degree of inter-regulatory coordination within the financial sector, the International Financial Services Centres Authority (IFSCA) has been established as a unified regulator with a holistic vision in order to promote ease of doing business in IFSCs and provide a world-class regulatory environment. 
• The main objective of the IFSCA is to develop a strong global connection and focus on the needs of the Indian economy as well as to serve as an international financial platform.

Conclusion

• Despite the challenges posed by the Covid-19 pandemic globally, GIFT City continues to attract domestic and international players. In the years to come, GIFT City will be a force to reckon with in the field of financial technology, data security and finance.