Strategic Location and Global Connectivity

GIFT City is located between Ahmedabad and Gandhinagar in Gujarat, one of India’s most industrially developed and investor-friendly states. Gujarat has long been known for its robust infrastructure, efficient administration, and pro-business policies.

From a global perspective, GIFT City’s location is particularly advantageous:

• It operates in a time zone that bridges Asian, European, and American markets.
• It offers seamless connectivity to major global financial centres.
• Proximity to international airports, ports, and logistics hubs enhances ease of doing business.

For global institutions seeking an India-facing base that operates on international lines, GIFT City provides an optimal gateway.

India’s First Operational International Financial Services Centre (IFSC)

GIFT City is not merely a business district but a designated IFSC, created under a special legal and regulatory framework. An IFSC is treated as a jurisdiction outside India for financial services transactions involving foreign currency.

This distinction allows entities in GIFT City to:

• Conduct transactions in freely convertible foreign currencies
• Serve non-resident clients with minimal domestic regulatory overlap
• Compete with offshore financial centres while remaining within India’s sovereign territory

The IFSC framework ensures regulatory clarity, predictability, and global competitiveness.

Unified and Progressive Regulatory Regime

One of the most significant advantages of GIFT City is its unified regulator: the International Financial Services Centres Authority (IFSCA). Traditionally, financial services in India are regulated by multiple bodies such as the Reserve Bank of India, Securities and Exchange Board of India, and Insurance Regulatory and Development Authority of India. In GIFT City, these fragmented regulatory functions are consolidated under IFSCA.

This single-window regulatory approach offers:

• Faster approvals and licensing
• Reduced compliance burden
• Globally aligned regulations for banking, capital markets, insurance, fintech, and fund management
• Continuous regulatory innovation tailored to emerging financial products

For businesses accustomed to international regulatory standards, this unified framework significantly enhances ease of entry and operations.

Attractive Tax Incentives

Tax efficiency is one of the most frequently cited reasons for setting up an entity in GIFT City. The Government of India has provided a robust package of direct and indirect tax incentives to make GIFT City globally competitive.

Key Direct Tax Benefits

• 100% tax exemption on profits for any 10 consecutive years out of 15 years
• Exemption from Minimum Alternate Tax (MAT) (or significantly reduced MAT)
• No dividend distribution tax
• Exemption from capital gains tax on certain transactions
• No tax on interest income earned by non-residents on specified securities

Indirect Tax Benefits

• Exemption or zero-rating of GST on most services provided to non-residents
• No securities transaction tax (STT), commodity transaction tax (CTT), or stamp duty on certain transactions

These incentives materially reduce the overall tax cost and significantly improve post-tax returns, particularly for funds, treasury centres, and financial services entities.

Liberal Foreign Exchange and Capital Account Framework

Entities in GIFT City operate with considerable freedom in foreign exchange transactions. Unlike domestic Indian entities, IFSC units are permitted to:

• Maintain accounts in foreign currency
• Borrow and lend in foreign currency
• Undertake derivatives and hedging transactions without extensive approvals
• Repatriate profits freely, subject to minimal compliance

This liberal regime is particularly attractive for:

• Global treasury and financing centres
• Fund managers and alternative investment funds
• Aircraft and ship leasing companies
• Multinational corporations managing cross-border cash flows

The result is a financial environment that closely mirrors offshore jurisdictions, while retaining the stability and credibility of India’s legal system.

Thriving Ecosystem for Financial Services and Beyond

While financial services remain the core focus, GIFT City has evolved into a multi-sectoral ecosystem. Today, entities operating in GIFT City include:

• Banks and financial institutions
• Stock exchanges and clearing corporations
• Fund managers and family offices
• Insurance and reinsurance companies
• Fintech and regtech firms
• Aircraft and ship leasing entities
• Professional services firms (legal, accounting, advisory)
• IT and technology service providers

This clustering effect creates powerful network advantages, enabling collaboration, talent mobility, and rapid business development.

World-Class Infrastructure and Smart City Design

GIFT City has been designed as a “city within a city” with infrastructure built to global standards. Key features include:

• Grade A commercial office spaces
• Integrated residential, retail, and social infrastructure
• District cooling systems for energy efficiency
• Underground utility tunnels for seamless maintenance
• High-speed digital connectivity and data centres
• Robust physical and cyber security systems

The smart city architecture ensures uninterrupted operations, sustainability, and long-term scalability that are critical factors for global institutions.

Ease of Doing Business and Single-Window Clearances

GIFT City emphasizes operational simplicity and investor convenience. Businesses benefit from:

• Single-window clearance mechanisms for approvals
• Streamlined incorporation and licensing processes
• Digitised compliance and reporting systems
• Dedicated support from GIFT City authorities and IFSCA

For new entrants, especially foreign companies unfamiliar with Indian bureaucracy, this ease of doing business is a decisive advantage.

Access to Global and Indian Talent

GIFT City enables companies to leverage both global expertise and India’s deep talent pool. Key advantages include:

• Ability to hire foreign nationals under simplified visa and employment norms
• Competitive compensation structures due to tax efficiency
• Access to highly skilled Indian professionals in finance, law, technology, and analytics
• Proximity to leading academic and research institutions

This talent flexibility allows firms to build high-quality teams comparable to global financial centres.

Strong Legal Framework and Contractual Certainty

Despite operating as an IFSC, GIFT City remains firmly within India’s sovereign legal framework. This offers:

• Enforceability of contracts under Indian law
• Access to Indian courts and arbitration mechanisms
• Predictability and stability compared to some offshore jurisdictions
• Strong protection of property and investor rights

For global investors, this balance between international-style flexibility and domestic legal certainty is particularly appealing.

Policy Stability and Government Support

GIFT City enjoys strong backing from both the Government of India and the Government of Gujarat. This support is reflected in:

• Continuous expansion of tax and regulatory incentives
• Regular stakeholder consultations
• Rapid introduction of new frameworks (e.g., fintech sandbox, sustainable finance, bullion exchange)
• Long-term policy vision aligned with India’s global financial ambitions

Such sustained political and institutional commitment significantly reduces policy risk.

Cost Competitiveness Compared to Global Financial Centres

Compared to traditional offshore and global financial hubs, GIFT City offers a materially lower cost base:

• Lower real estate and operational costs
• Competitive manpower costs
• Reduced compliance and regulatory expenses
• Tax efficiencies that enhance net profitability

This cost advantage allows firms to achieve global-scale operations at a fraction of the cost.

Emerging Opportunities and Future Growth

GIFT City is still in a growth phase, offering early movers the advantage of scale and influence. Emerging focus areas include:

• Sustainable finance and green bonds
• Global in-house centres (GICs)
• Digital assets and fintech innovation
• Commodity and bullion trading
• Cross-border dispute resolution and arbitration

As regulatory frameworks mature and participation deepens, GIFT City is poised to become a dominant regional and global financial hub.

Conclusion

Setting up an entity in GIFT City is no longer a niche or experimental choice but a strategic decision increasingly embraced by global and Indian businesses alike. The combination of tax efficiency, regulatory clarity, foreign currency freedom, world-class infrastructure, and strong governmental support makes GIFT City uniquely positioned among global financial centres.

For organizations seeking to service international markets, manage cross-border capital, or establish a globally competitive base in India, GIFT City offers an unparalleled proposition. As India continues its ascent in the global economic order, GIFT City stands at the forefront bridging domestic strength with international opportunity.