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February 2, 2024
GIFT City to Become an International Finance Hub
Introduction
GIFT City, also known as Gujarat International Finance Tec-City, has become a shining example of innovation and advancement in India. With its rapid development, GIFT City is positioning itself as a prominent International Finance Hub. It was established in 2007 with the vision of transforming into a thriving financial hub that operates without the constraints of regulations and taxes. This article explores the key aspects of GIFT City’s development and its potential as an international finance hub.
What is GIFT City in India?
GIFT City, also referred to as Gujarat International Finance Tech-City, is a meticulously planned commercial hub located in Gujarat, India. This visionary project is designed as a greenfield smart city, incorporating advanced and interconnected infrastructure. The city is segregated into two sections: the domestic tariff area (GIFT DTA) and the multi-service special economic zone (GIFT SEZ). The GIFT DTA operates under domestic regulations, whereas the GIFT SEZ encompasses an internationally recognized International Financial Services Centre (IFSC) that sets global standards.
What are the features of GIFT City that led to its International Finance Hub status?
The following are the features that is making GIFT City an International Finance Hub:
1. Infrastructure Excellence
GIFT City stands out for its world-class infrastructure, equipped with modern amenities and cutting-edge Technology. The city boasts well-planned commercial spaces, residential areas, and social infrastructure, creating an environment conducive to a thriving financial ecosystem.
2. Special Economic Zone (SEZ) Status
One of the key features that contributed to GIFT City’s international finance status is its Special Economic Zone (SEZ) designation. This status provides businesses within GIFT City with various tax benefits and exemptions, making it an attractive destination for both domestic and international financial entities.
3. Global Connectivity
GIFT City’s strategic location in Gujarat, a well-connected state in India, ensures easy accessibility. It is near to major airports, ports, and highways, facilitating seamless connectivity for businesses looking to establish a presence in this financial hub.
4. Regulatory Framework
The regulatory framework of GIFT City is designed to align with international standards. It has its own regulator, the International Financial Services Centers Authority (IFSCA), which ensures a transparent and efficient regulatory environment. The IFSCA operates independently to oversee financial activities in GIFT City, providing a regulatory framework comparable to global financial centers.
5. 24×7 Operations
GIFT City operates round the clock, facilitating real-time transactions and financial services. This feature caters to the global nature of financial markets, allowing businesses to operate seamlessly across different time zones.
6. Talent Pool
The city’s proximity to leading educational institutions and a skilled workforce pool from Gujarat and beyond contribute to its competitive advantage. Gujarat International Finance Tech-City nurtures talent through specialized training programs, ensuring a steady supply of skilled professionals in finance and related fields.
7. Tax Benefits
GIFT City provides a tax-efficient environment, offering various incentives such as exemptions from certain taxes and duties. These fiscal benefits attract both domestic and foreign investors, fostering a vibrant financial ecosystem. In GIFT City government has introduced some direct and indirect tax benefits like 100% of tax exemption for 10 consecutive years, no Goods Service Tax will be levied on the services exchanged in IFSC or received by a unit in IFSC or services provided by GIFT City of India.
8. Potential for Coworking and Office Space in the GIFT City
Imagine working in a productivity-encouraging environment at a leading financial and technology hub. Businesses of all sizes, from startups to multinationals, benefit from flexible workspaces at GIFT City. Considering the flexibility of a shared workspace and the durability of a well-equipped office, it’s easy to see why these spaces are trending in the city. With modern aesthetics and first-class amenities, these spaces are designed to impress you, your clients and your team.
How is GIFT City encouraging International Trade Finance?
1. Cross-Border Transactions
GIFT City serves as a hub for international trade finance, facilitating seamless cross-border transactions. Its robust regulatory framework and advanced infrastructure streamline processes such as trade finance, currency exchange, and clearing services. Gujarat International Finance Tech-City houses advanced payment infrastructure, including electronic fund transfer systems, clearinghouses, and settlement platforms, facilitating seamless cross-border payments and remittances.
2. Collaboration with International Organizations
GIFT City actively collaborates with international organizations, including the International Finance Corporation (IFC), to strengthen its position as an international finance corporation. Such collaborations facilitate knowledge exchange, regulatory alignment, and the adoption of best practices from established global financial centers.
3. Trade Credit Facilities
GIFT City provides access to trade credit facilities, allowing businesses to secure short-term financing for procurement, inventory management, and working capital needs. These credit facilities, offered by banks, financial institutions, and trade finance companies, play a crucial role in supporting the liquidity requirements of businesses engaged in international trade.
Summary
In summary, GIFT City’s development as an international finance corporation is a significant step towards making India a hub for global capital flow. The city’s world-class infrastructure, SEZ status, global connectivity, and 24×7 operations have collectively contributed to its standing as an International Finance Hub. It is also shaping the future of India’s financial landscape and contributes to the country’s economic growth.
Business in GIFT City
Want to start business in global hub? Register your business or subsidiary in GIFT City.
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