A deep dive into how India’s first IFSC is reshaping capital, fintech, and cross-border business.

By Prashant Kumar

Introduction

When India launched GIFT City (Gujarat International Finance Tec-City), it wasn’t just another infrastructure project — it was a strategic policy shift. For the first time, India built a jurisdiction that merges global finance flexibility with Indian regulatory oversight.

In just a few years, GIFT City has evolved into a centre for fund management, fintech innovation, aircraft leasing, and cross-border capital flows, signalling a structural change in how financial services operate in and from India.

How is GIFT City transforming India’s financial ecosystem?

GIFT City allows global and Indian financial institutions to operate with international-level freedom — offering tax incentives, foreign currency operations, and unified regulation under IFSCA. It’s driving India’s transition from a capital-importing market to a global financial intermediation hub.

The establishment of the International Financial Services Centres Authority (IFSCA) has consolidated regulatory powers, creating a unified regime that covers banking, capital markets, insurance, and fund management. This single-window structure eliminates overlaps that once slowed down India’s financial growth.

Today, offshore funds, fintechs, reinsurance companies, and aircraft leasing firms are choosing GIFT City over foreign jurisdictions like Singapore or Dubai — keeping both capital and expertise within India’s reach.

Key sectors being transformed through GIFT City

1. Banking and Capital Markets

GIFT City hosts IFSC Banking Units (IBUs) that can raise foreign currency deposits, lend to overseas borrowers, and participate in global trade finance. The India International Exchange (India INX) and NSE IFSC have introduced a 24-hour trading window — a first for India.

2. Fund Management and Asset Structuring

Fund managers now prefer setting up India-domiciled offshore funds under GIFT City’s relaxed tax and FEMA norms. This encourages global investors to route capital through India, creating domestic fund administration jobs and reducing dependence on Mauritius or Singapore.

3. Fintech and Innovation Sandbox

Under IFSCA’s FinTech Sandbox, startups can test new financial technologies with global standards of compliance. Cross-border payments, blockchain-based remittance, and digital asset experiments are now being piloted within India’s legal framework — without the friction of multiple regulators.

4. Insurance and Reinsurance

IFSCA has opened the door for foreign and Indian insurers to establish IFSC Insurance Offices (IIOs), making GIFT City a regional hub for reinsurance and risk management operations.

What makes GIFT City attractive to investors and professionals?

Unified Regulator (IFSCA): Simplifies licensing and operations across financial services.
Tax Incentives: 100% income tax exemption for 10 years; no GST on exports.
Foreign Currency Operations: Enables global trade without INR restrictions.
Ease of Doing Business: Single-window clearance, faster approvals, and modern governance.
Strategic Location: Between Ahmedabad and Gandhinagar — with world-class infrastructure and international connectivity.

These features position GIFT City not just as a financial zone, but as a policy innovation hub — where law, finance, and technology intersect.

Why GIFT City matters for professionals

For Company Secretaries, Chartered Accountants, and Legal Advisors, GIFT City opens up a new professional vertical — IFSC advisory and compliance.
From incorporation and licensing to FEMA integration and IFSCA reporting, professionals can now build niche expertise that directly supports India’s globalisation of finance.

India’s financial future through GIFT City

The shift from offshore dependence to onshore capability marks a turning point.
GIFT City demonstrates that India can host global-scale financial activity within its own borders — attracting capital, retaining expertise, and creating compliant, transparent ecosystems aligned with global best practices.

For policymakers, it’s about self-reliance in finance.
For professionals, it’s about leading the next chapter of India’s economic liberalisation.

FAQs — How GIFT City Is Changing India’s Financial Landscape

1. How is GIFT City different from other SEZs in India?
GIFT City is a specialised financial SEZ focused on international financial services and regulated by IFSCA, enabling foreign-currency operations, fund management, and global trading — unlike manufacturing or IT SEZs.

2. What types of companies are setting up in GIFT City?
Banks, fund managers, reinsurance firms, aircraft leasing companies, fintech startups, and professional services firms are among the early movers establishing IFSC entities in GIFT City.

3. Can Indian startups operate from GIFT City?
Yes. Indian startups — especially fintechs and fund-service providers — can incorporate IFSC entities to serve international clients, accept foreign-currency revenue, and access the IFSCA sandbox.

4. How does GIFT City support fintech innovation?
Through the IFSCA FinTech Sandbox, startups can pilot cross-border payments, blockchain solutions, and digital-asset experiments in a controlled regulatory environment with tailored compliance relief.

5. Are there tax benefits for businesses operating from GIFT City?
Yes. GIFT City offers tax incentives such as 100% tax exemption for 10 out of 15 years, no dividend distribution tax, and zero GST on export services for eligible IFSC activities.

6. How does GIFT City impact India’s global financial standing?
By enabling India-domiciled fund management, retaining offshore flows, and hosting global financial activities, GIFT City strengthens India’s role as a regional financial intermediation hub.

7. What role does the IFSCA play in GIFT City’s growth?
The International Financial Services Centres Authority (IFSCA) is the unified regulator for banking, capital markets, insurance, and fintech in GIFT City — streamlining approvals and regulatory consistency.

8. What opportunities exist for professionals in GIFT City?
Company Secretaries, lawyers, compliance specialists, and finance professionals can build niche practices in IFSC incorporation, IFSCA compliance, fund structuring, and fintech advisory as the hub expands.

Strategic Takeaway

GIFT City is reshaping India’s financial identity — from an investment destination to a global finance player. The convergence of regulation, technology, and global business within one ecosystem is exactly the kind of structural reform India needed to strengthen its place in international markets.

About the Author

Prashant Kumar is a Company Secretary, Published Author, and Partner at Pratham Legal, a full-service Indian law firm advising on corporate, regulatory, and transactional matters. He specialises in corporate governance, legal compliance, and brand protection, helping businesses build credible and sustainable legal foundations. He can be reached for discussions on brand strategy, compliance, and governance excellence via LinkedIn.