Narendra Modi is well known as a visionary and a catalyst of development.
Much of what Gujarat has been achieved in the last two decades is easily credited to him. Today the western Indian state is one of India’s wealthiest states with uninterrupted power supplies, a flood of investment and green agrarian fields and smooth roads.
Another milestone of his numerous achievements would be the GIFT city.
GIFT city is India’s first operational Smart City. GIFT- stands for the ‘Gujarat International Finance Tech’
and it was originally conceptualised in 2007 when Modi was the state’s Chief Minister.
It was brought up as a joint venture between the Gujarat Urban Development Company Ltd and
Infrastructure Leasing and Financial Services Ltd.
The real work started in October 2011 and the first multi-storeyed structure was inaugurated by the then
Chief Minister in 2013.
In 2015 – under the Smart Cities – Mission Statement and Guidelines – the GIFT city was recognised as a
model for greenfield development.
The GIFT city admirers say – if Gujarat is the pride of India, the GIFT city is the pride of Gujarat.
GIFT is conceptualized as a global financial and IT services hub, a first of its kind in India, designed to be at or above par with globally benchmarked financial centers such as Shinjuku, Tokyo, Lujiazui, Shanghai, La Defense, Paris, London Dockyards etc.
In the words of incumbent Chief Minister Bhupendra Patel, “The GIFT city envisions a state of the art infrastructure backed by technology, thus providing a seamless global ecosystem with ease of doing business”.
This will bring India and Gujarat at the forefront in the global financial system, he said.
Prime Minister Narendra Modi says – “The GIFT city resembles the vision to create a world class finance and IT zone for India to provide services to the country and also to the entire world”.
That way; it’s an ambitious project. In March 2022 a group of visiting journalists were told by officials
that a sum of Rs 2000 crore has been spent on infrastructure and the project has attracted Rs 11,000 crore of investments in Phase-I.
The first phase had targeted to provide 30,000 jobs and already more than 10,000 persons work with
225 units in GIFT City.
The GIFT development is expected to become a contemporary model development in India, advancing the ideas of sustainability and ecology. The project regenerates the area as a high-quality, mixed use district of residential, commercial and open space facilities that optimize land and real estate values.
There are 14 multi-storeyed projects and the target is to build 110 high-rise buildings and create 10 lakh jobs.
In short the GIFT city offers – a global financial and IT hub with a domestic tariff area and a multi services SEZ.
During his visit on July 29, the Prime Minister launched the India International Bullion Exchange (IIBX) – India’s maiden international finance-service centre.
“Even amid the 2007-2008 global financial crisis and policy paralysis, Gujarat was taking strides in fintech,” the Prime Minister said.
On growing financial awareness among the general populace, Modi cited AMFI’s assets under management (AUM) which grew from Rs 10 trillion in 2014 to Rs 35 trillion by June 2022.
“Hedge funds are looking at this jurisdiction (IFSC) for pooling of global funds that can be invested in India…IIBX is a major step. India being the second largest consumer of gold, we will now be able to command global prices,” Finance Minister Nirmala Sitharaman said.
With a built-up area of 300,000 sq ft spread across 27 floors, the upcoming IFSCA Tower headquarters
building is expected to be completed by 2024.
Commending IFSC’s progress in banking, finance and insurance, Ms Sitharaman stated that total assets in
banking had doubled to stand at $32 billion.
The IIBX will facilitate efficient price discovery with the assurance of responsible sourcing and quality. This will help India attain its rightful place in the global bullion market.
Mr Modi laid the foundation stone for the headquarters building of the International Financial Services Centres Authority at GIFT-City near Gandhinagar.
He launched the NSE IFSC-SGX Connect platform. ‘Connect’ is a framework between NSE’s subsidiary in
GIFT IFSC and Singapore Exchange. Through this platform, clients, investors and trading members of SGX
who used to trade in NSE listed Indian securities through SGX would now trade in these securities through NSE IFSC.
The GIFT city is also expected to usher in transparency in the gold’s price-setting mechanism.
Of course, it is well known that India is the world’s second-biggest consumer and importer of gold, buying an estimated 850 tonnes per annum. The country accounts for 25 percent of the world’s gold demand. But, so far, India has not been a global price setter for the precious yellow metal.
The newly launched Exchange in Gujarat’s GIFT City is now a step in that direction.
In 2014, after taking over reins of power in the centre, Modi’s first Finance Minister Arun Jaitley took personal interest in the project.
Jaitley worked for regulations to kickstart India’s first International Financial Services Centre (IFSC).
Subsequently, the Security Transaction Tax, Commodity Transaction Tax, Dividend Distribution Tax and Long Term Capital Gains were abolished (or waived off) to attract investments.
In 2017-18, a unified regulator for the IFSC was also announced. Later more sops followed in 2019
which included extension of tax holiday among other measures.
In terms of development paradigm, officials say the GIFT city symbolises ‘integrated development’. It has (or will have) social infrastructures including educational institutes and also domestic and international schools, even universities.
There are scopes of high quality entertainment and recreational areas, smart retail spaces, sports areas.
“In the residential plan, there will be well planned residential areas and affordable housing,” says one official adding, in the financial services and offshore banking there will be scopes for borrowing and lending, external commercial borrowing and also a series of derivative products.
Well, to sum up, India’s bullion exchange is aimed at making the country a key regional hub for bullion
flows. It has already on-boarded at least 60 jewellers.
Sources say, ‘qualified jewellers’ with net worth of Rs 25 crore and 95 per cent of revenue from jewellery and NRIs with $5 lakh net worth are now eligible for trading in the exchange.