What is GIFT City?
27 April, 2023
Spread over 886 acres on the bank of river Sabarmati is India’s first operational smart city known as GIFT City. This smart city is equipped with state-of-the-art infrastructure to offer a host of cross-border financial services to investors. Both Indian and international banks can set up their units in GIFT City to provide international banking services within the country. Continue reading to know the full form of GIFT City and its features.
What does GIFT City mean?
The full form of GIFT City is Gujarat International Finance Tec-City. It is a business district comprising commercial and residential spaces, with the commercial spaces used to develop infrastructure to offer global financial services to investors. The business segment of GIFT City includes Offshore Banking, asset management and insurance. Companies involved in capital markets, information technology (IT) services, business process outsourcing, etc., are establishing their units in GIFT City to offer global financial and IT services in the country. GIFT City also hosts multiple International Financial Service Centres (IFSC) that are approved and regulated by the government.
Key Features of GIFT City
The following are the features offered by GIFT City:
India’s first operational smart city
GIFT City comes with underground utility tunnels to avoid road excavations for future maintenance and renovations. The City Command and Control Centre (C4) uses the Internet of Things (IoT) technology to oversee and manage the city’s infrastructure. The city is also equipped with fully automated district cooling system (DCS) and waste collection system (WCS).
India’s first International Financial Services Centre (IFSC)
The city is India’s first IFSC under the Special Economic Zone (SEZ) Act, 2005. The Government of India has approved GIFT City as a multi services SEZ. The country’s various regulatory bodies have permitted financial institutions to set up IFSC units across business sectors in GIFT City. Banks can set up IFSC Banking Units (IBU) to cater to resident and foreign clients.
Under IFSC Gift City, both units and investors can benefit from a multitude of tax benefits. Units receive 100% income tax exemption for 10 consecutive years out of 15 years. Also, Goods and services (GST) tax will not be applicable to services. Investors, too, can avail of tax exemptions on specified securities, funds lent to IFSC, transactions under IFSC exchange, etc.
67% of GIFT City comprises high-rise landmark buildings with smart offices. Along with commercial spaces, the Gujarat International Finance Tec-City also hosts a dedicated residential zone with affordable housing offerings. Other amenities include a dedicated pedestrian walking and multilevel parking system and enhanced connectivity through mass rapid transit system (MRTS).
This initiative by the Gujarat Government which is supported by the GOI is strategically located on the banks of the river Sabarmati, between Ahmedabad and Gandhinagar. The former is the state’s business capital while the latter is its political capital. Also, the close proximity to some of the top educational institutions allows for top talent availability.
GIFT City & HDFC Bank
HDFC Bank’s Gandhinagar branch will act as an IBU for GIFT City. With HDFC Bank, you can open Offshore Accounts & Deposits and Call Accounts. You can maintain term deposits in four major currencies, including USD, GBP, EUR and AUD. With GIFT City.
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Read more about the overview of GIFT City here.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Investments are subject to changes in tax laws. Please contact a professional consultant for an exact calculation of your liabilities.