It’s the morning of 29 March. A private bus carrying bank employees is at the entrance of Gujarat International Finance Tec-City (GIFT City). Smooth, broad roads, shiny glass towers, and young Chinaberry trees seem to welcome them.
But a few hundred metres further, the town resembles an excavation site. A number of trenches are dug on both sides of the road where cement mixers and trucks outnumber auto rickshaws and cabs.
One of the employees on the bus, Agrawal, 29, is busy scrolling through his phone. He is looking for a new job. “I want to move out… I can come back when this place is ready and complete,” he tells The Ken. He insists on being addressed by his last name.
Roughly 30 km north of the Ahmedabad airport in the western state of Gujarat, GIFT City is India’s ambitious attempt to create an offshore financial centre (OFC). Spread across 886 acres—the size of 21 Taj Mahal complexes—it aims to lure Indian companies and provide global businesses with an attractive alternative to other OFCs, such as Singapore and Hong Kong.
These regions, carrying out transactions in globally accepted currencies such as the US dollar, provide businesses with special tax incentives incentives International Financial Services Centre (IFSCA) IFSCA brochure Read more for setting up offices. For instance, no goods and services tax (GST) is levied on services provided to and received from GIFT-registered units. There is also a 10-year income tax holiday.
“Prime Minister Narendra Modi conceptualised the idea in 2007 after returning from Singapore. He was then the chief minister of Gujarat,” said Dipesh Shah, executive director of the International Financial Services Centres Authority (IFSCA), the offshore zone’s unified regulator.
GIFT City’s construction began in 2012, but for the first eight years, it kept running into regulatory hurdles. Moreover, one of its anchor developers, Infrastructure Leasing & Financial Services Limited (IL&FS), was crisis-hit, and the Gujarat government eventually took over the development in 2018.
But it was in October 2020 when it gained significant attention after the IFSCA took charge, replacing four domestic regulators. Since then, GIFT-registered firms have risen from 129 to 450 in February, with more than $240 million in investments committed.
Big corporations—such as MUFG Bank, Standard Chartered Bank, insurance firm ICICI Lombard, and fund manager HDFC AMC—and various aircraft- and ship-leasing companies, among others, are housed inside GIFT City. Together, they contribute to over 20,000 jobs, according to the IFSCA.
But The Ken met several employees working here contemplating to leave, just like Agrawal. The lack of physical infrastructure isn’t the only reason. “Unlike Mumbai and Gurgaon, Gujarat isn’t traditionally a hub for financial-services companies.