Role of GIFT City on the Indian Economy Growth

Introduction

GIFT City, also known as Gujarat International Finance Tec-City, is a major financial and technology hub located in Gandhinagar, Gujarat, India. With its state-of-the-art infrastructure, strategic location, and conducive business environment, the city has emerged as a game changer for Indian companies. In this article, we will see how companies in GIFT City in India are playing a major role in the Indian economy’s growth.

What will be the rise of GIFT City?

GIFT City was established with the vision of creating a world-class business district that can compete with global financial centers such as Dubai and Singapore. Since its founding, the city has witnessed remarkable growth and has become a corporate hub for various sectors including banking, finance, insurance, technology, and more GIFT City companies. Its integrated ecosystem of special economic zones, international financial services centers, and technological innovation zones has attracted a large number of domestic and international companies, promoting economic development on a large scale.

Companies in GIFT City  

Several renowned companies have established their presence to contribute to economic growth and jobs in GIFT city. These companies span diverse industries, such as banking, IT services, financial consulting, infrastructure, and management. Some of the major companies include State Bank of India, ICICI Bank, HDFC Bank, TCS, Wipro, Infosys, Deloitte, Grant Thornton, IL&FS Ecosmart Ltd, IL&FS Infrastructure Development Corporation Ltd, and ABB Group.

How does GIFT City play a major role in Indian economic growth?

1. Raise in Foreign Direct Investment (FDI)

One of the contributions of companies in GIFT city of India to its economy is its ability to attract foreign direct investment (FDI). The city’s robust regulatory framework, tax incentives, and investor-friendly policies have encouraged multinational companies to set up their operations in GIFT City in India. This influx of foreign direct investment has not only created employment opportunities for Indian citizens but also increased the overall economic growth of the country.

2. Strong Financial Services

GIFT City acts as a catalyst for India’s financial services industry. The presence of major banks, insurance companies, and financial institutions has evolved the city into a thriving financial center. The International Financial Services Center (IFSC) at GIFT City provides a conducive environment for global banking transactions, fund management, capital market activities, and more. The availability of world-class infrastructure and regulatory support has positioned GIFT City as an attractive destination for financial services players, resulting in increased investments and business opportunities.

3. Global Market Access for Indian Companies

Companies in GIFT City serve as gateways for Indian start-ups & companies seeking access to global markets. Through their international networks and market insights, these companies facilitate cross-border trade and investment. Indian businesses, with the support of GIFT City entities, can expand their reach, explore new markets, and foster collaborations on an international scale, thereby contributing to the Indian economy growth.

4. Creating Jobs in GIFT City

GIFT City has emerged as a major job creator for reducing unemployment in India. The presence of different industries in the smart city has led to an increase in job opportunities in various sectors. Talented professionals from both India and abroad are attracted to the promising prospects of jobs in GIFT City, resulting in a brainchild for the country. The city’s focus on skill development and talent acquisition has further strengthened its role as a provider of quality employment, contributing to the overall socio-economic development of the region.

5. Promoting Technological Innovation

GIFT City in India has also made significant progress in promoting technological innovation. The city has state-of-the-art infrastructure and facilities specifically designed to support the growth of the technology sector. It hosts research and development centers, technology incubators, and innovation laboratories that attract both established tech giants and startups. This convergence of technology and finance has resulted in ground-breaking solutions, revolutionizing the way businesses operate and further propelling India’s economic growth.

How will GIFT City be the future of the Indian economy?

GIFT City’s inception dates back to 2008, when fin-tech was still a relatively unfamiliar term and Narendra Modi was serving as the Chief Minister of Gujarat. The visionary concept aimed to transform this strategically located area into a hub for global financial trade and commerce, easing the bureaucratic hurdles and compliance procedures that often hinder progress. The overall aim was to create an attractive alternative to famous financial centers such as Dubai or Singapore for the future of the Indian economy. Their focus covered a variety of business sectors: capital markets, offshore banking, offshore asset management, offshore insurance, IT services, ITeS/BPO services as well as complementary areas such as legal, accounting, research, and analytics.

The center is equipped with state-of-the-art infrastructure that includes basic urban amenities and robust external connectivity to support its operations. Oversight of international transactions, which the International Financial Services Center Authority (IFSCA) carefully managed, was a significant responsibility. The IFSCA’s remit extended to capital markets, offshore banking, asset management, offshore insurance, and related areas. The center also offers both ship and plane rental services. The presence of two international exchanges in GIFT City has contributed to an impressive average daily trading.

Despite initial doubt from many people, GIFT City’s vision continued. A turning point came about five years ago when successive Union Budget from 2015 introduced incentives for the growth of GIFT City. Aiming to serve overseas clients interested in cross-border finance and related services, the International Financial Services Center became operational in 2015. Building on this foundation, the IFSC Authority emerged in 2020, unifying regulatory oversight for all international financial services and instilling confidence in international financial services. financial community.

Where is GIFT City located in India?

Located on the banks of the Sabarmati River, GIFT City is becoming much more than a financial center. Plans include the development of residential complexes and cultural centers, while the riverfront is set for a transformation with the addition of cafes and restaurants. Moreover, talks are on with foreign universities to establish local campuses, a potential game changer that could profoundly shape the cultural landscape of GIFT City.

Conclusion

In conclusion, the role of GIFT City companies in the Indian economy growth cannot be overstated. Its rise as a leading financial and technology hub has attracted foreign direct investment, strengthened the financial services sector, spurred technological innovation, created employment opportunities, and strengthened India’s global standing. As GIFT City continues to develop, its contributions to India’s economic growth and development will further increase.