NO PAIN, ALL GAIN

Regulatory support and cost effectiveness put GIFT City on the way to becoming an international financial hub 

- NACHIKET KELKAR

Gujarat is officially a dry state. But soon, investors flocking to the Gujarat International Finance Tec-City, or GIFT City, which is located between the state’s largest city Ahmedabad and its capital Gandhinagar, will be able to raise a toast, as the government has given hotels, restaurants and clubs there permits for wine and dine facilities.

GIFT City has always been an exception. The ambitious project envisioned by Prime Minister Narendra Modi wants to challenge global financial hubs like Dubai and Singapore. Conceptualised in 2007, when Modi was Gujarat chief minister, its foundation stone was laid in 2012 and business commenced in 2015.

It is still a work in progress, and a far cry from the global financial hub it aspires to be, but it is steadily getting there. “Once major players set up shop in GIFT City—some of the foreign banks are already there and some have set up back office operations—it is only a matter of time before we have all types of players from the ecosystem,” said Sriram Krishnan, chief business development officer, NSE. “In the next few years, GIFT City will be how Bandra-Kurla Complex in Mumbai looks today.”

GIFT City has already established itself as an international financial services centre (IFSC). Last year, the popular SGX Nifty, the Singapore Stock Exchange-traded futures on the NSE’s benchmark Nifty50 index, was rebranded GIFT Nifty and all the derivative contracts earlier traded in Singapore were moved to the NSE International Exchange (NSE IX) in GIFT City. This shift of derivatives trade worth $7.5 billion was a big step in attracting more investors. Some 59.13 lakh contracts were traded on international stock exchanges in GIFT City with a traded value of $194.88 billion till September last year.