GIFT City

 

GIFT City

• The United Kingdom has entered into a strategic partnership to develop India’s fledgling international financial services center GIFT City and agreed to set up a new Fund of Funds to be managed by the State Bank of India (SBI) group to route the U.K.’s future capital investments into India
• India and the U.K. also signed off on a new infrastructure finance and policy partnership to help India execute its National Infrastructure Pipeline that envisages investments worth $1.4 trillion, at the 10th Economic and Financial Dialogue between the two countries steered by U.K. Chancellor Rishi Sunak and Finance Minister Nirmala Sitharaman
• "We have been able to announce a series of ambitious initiatives across trade, infrastructure, sustainable finance and research [including]  a new strategic partnership to develop the GIFT city, an opportunity to drive international capital flow from London to India," Mr. Sunak added
• Bilateral trade between India and the U.K. stood at £24 billion in 2019. India is now the second-­largest project investment source for the U.K
• To help combat the pandemic, the U.K. and India announced a joint investment of £8 million for research to understand and address the factors leading to the severity of the novel coronavirus in South Asian populations in the U.K. and in India.

What Is IFSC?

• An IFSC enables bringing back to India the financial services and transactions that are currently carried out in offshore financial centers by Indian corporate entities and overseas branches/subsidiaries of financial institutions (FIs) by offering a business and regulatory environment that is comparable to other leading international financial centers in the world like London and Singapore.
• It would provide Indian corporates easier access to global financial markets. IFSC would also complement and promote further development of financial markets in India.
• The first IFSC in India has been set up at GIFT (Gujarat International Finance Tec-City) City, Gandhinagar, Gujarat.

Need For Unified Regulator

• Currently, the banking, capital markets, and insurance sectors in IFSC are regulated by multiple regulators, i.e. RBI, SEBI, and IRDAI.
• The dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination. The development of financial services and products in IFSCs would require focussed and dedicated regulatory interventions.
• It also requires regular clarifications and frequent amendments in the existing regulations governing financial activities in IFSCs.
• Further, this would also be essential from an ease of doing business perspective.
• This would also generate significant employment in the IFSCs in particular as well as the financial sector in India as a whole.
• Hence, a need is felt for having a unified financial regulator for IFSCs in India to provide a world-class regulatory environment to financial market participants.

Gujarat International Finance Tec-City

• Gujarat International Finance Tec (GIFT) City is located on the banks of the Sabarmati River and is around 12 km (7.5 mi) from Sardar Vallabhbhai Patel International Airport and is India's first operational smart city and international financial services center. It was promoted by the Government of Gujarat as a greenfield project. The city is designed for a walk to work concept and includes commercial and residential complexes.
• The city is connected through 4-6 lane State and National Highways. A double corridor metro system is being constructed to connect GIFT City to the nearby airport and various parts of Ahmedabad and Gandhinagar.
• The idea for GIFT was conceived during the Vibrant Gujarat Global Investor Summit 2007 and the initial planning was done by East China Architectural Design & Research Institute (ECADI), which is credited with the planning much of modern-day Shanghai. The GIFT City’s plan is for the 359 hectares (886 acres) of land area to have approximately ~110 buildings with ~5,800,000 m2 (62,000,000 sq ft) of built-up area, of which around 67% is commercial, 22% is for residential and 11% is social facilities. Currently ~190,000 m2 (2,000,000 sq ft) of commercial space is operational, and another 280,000 m2 (3,000,000 sq ft) is under development. As of now an investment of Rs 10,500 crore has already been committed for GIFT City. The city has an integrated development model that has been spread out in three phases. Each phase is designed as integrated sustainable development, for example, the first phase itself includes the development of office space, residential, school, hotel, club, etc.
• Currently, approximately 225 units/companies are operational with more than 12000 professionals employed in the City.