Gujarat International Financial Tec city - GIFT
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As a dream project of Prime Minister Narendra Modi, Gujarat International Financial Tec City (GIFT) is designed for Greenfield development as a hub for the global financial services sector. The GIFT master plan facilitates Multi Services Special economic Zone (SEZ) with International Financial Services Centre (IFSC) status, Domestic Finance Centre and associated Social infrastructure. GIFT SEZ Limited has been formed for development of Multi Services SEZ at Gandhinagar with the prime focus on development of IFSC and allied activities in SEZ. It is pertinent to note that the primary focus of the Multi Services SEZ will be on financial services.
Purpose of GIFT SEZ:
The main purpose of GIFT SEZ is to provide high quality physical infrastructure i.e. electricity, water, gas, district cooling, roads, telecoms and broadband, in order to motivate finance and tech firms to relocate their operations at GIFT from places where infrastructure is either inadequate or very expensive.
To develop and implement the project, Government of Gujarat (GOG) through its undertaking Gujarat Urban Development Company Limited (GUDCOL) and Infrastructure Leasing & Financial Services (IL&FS) have established a Joint Venture Company, "Gujarat International Finance Tec-City Company Limited" (GIFTCL). The estimated cost of the entire project is Rs. 70000 crores (USD 11 Billion).
GIFT is being designed as a hub for the global finance services industry for which connectivity, infrastructure and transportation access have been integrated into the design of the city and an attractive pricing strategy is also being developed to ensure that it is a fraction of the cost that is ordinarily incurred in other Indian and global finance cities.
Stage of completion:
Formal approval for multi service SEZ has been received from Ministry of Commerce, Government of India. Major approvals viz. environmental clearance for the project and height clearance for part of Phase-1 has been received. Also, construction activities at site viz. levelling and dressing have been initiated and Phase-1 is expected to commence in the later part of this year and would be completed within 3 to 5 years. At present, two 29-floor commercial towers have been completed.
Target Business Segments:
- Financial Services Operations (Back-office of banking, Insurance and Asset Management Companies);
- IT services (Software Application development and maintenance);
- Capital Markets & Trading;
- BPO Services; and
- KPO Services.
Land use in GIFT SEZ:
The predominant land use in GIFT SEZ is development of commercial, residential and social facilities. Commercial development is the primary focus of GIFT SEZ with major built up space dedicated to offices for financial and related services, retail shopping, general business and commerce, district centre, community centre, local shopping, hotels etc. Appropriate emphasis is also given towards essential housing facilities, which are provided in the form of studios and apartments for employees working in GIFT SEZ. Further, social facility category includes all educational institutes, health centre, communication hubs and distribution facilities.
- Foreign Currency lending;
- Taking of deposits;
- Issue of securities;
- Over the Counter (OTC) Trading in Derivatives for Risk Management and speculative purposes;
- Venture capital.
Fund Custody, Administration and Custody
- Custody of Corporate Funds;
- Trust Companies;
- Asset Management companies;
- Hedge funds;
- Investment Counsellors and Portfolio Managers.
Insurance, Assurance and Reinsurance
- Life and Non-Life Insurance business;
- Assurance Companies;
- Captive Insurance;
- Reinsurance and related operations.
Corporate Treasury Management
- Managing Foreign Exchange Transactions;
- Hedging Operations;
- Raising and Investing of Cost.
- Regional financial exchange;
- Securities Trading;
- Futures and Options Trading;
- Commodities Trading.
- International Business Companies;
- Back office operations;
- Ship Management & Maritime Operations;
- Export Finance Companies;
- Companies involved in Lending activities, Trade finance activities, International Leasing,
- Foreign Exchange dealers, International factoring;
- Representative offices;
- Money Changers and brokers
GIFT City offers a number of fiscal incentives to the potential investors by providing exemption from income tax, service tax, excise duty, custom duty, sales tax, electricity duty etc. depending upon the nature of investment or unit established.
For Development Stage (Capital Goods, Consumables, Components & Spares) and Operation Stage (Raw Materials, Consumables, Components & Spares), the following fiscal incentives are offered to the potential investors:
- No Customs Duty;
- No Excise Duty;
- No Sales tax;
- No Service Tax;
- No Purchase Tax;
- No Stamp duty & Registration Fee;7. No Stamp duty on Mortgages;
- No Electricity duty.
At the profit Stage, exemption will be given from payment of Income Tax in the following manner:
- 100% for the first 5 years
- 50% for the next 5 years
- 50% of profits ploughed back for the next 5 years
City officials in GIFT are inviting companies from countries like Singapore who are willing to expand their business operations but are unable to do so due to a lack of land in their home countries; such companies may consider opening their businesses in GIFT where real estate is relatively cheaper. Among the investments being encouraged include investments from banks, private equity companies, insurance companies and asset management companies.
China's technology giant Huawei is likely to provide technology to GIFT. According to Eric Yu, president, enterprise business, Huawei India, this technology includes networking solutions and setting up of data centres and surveillance as well as other opportunities.
Leading developers showing an interest in participating in development of GIFT City includes Ajmera Realty, Hiranandani, Arihant Developers, Lodha, Godrej among others. GIFT is well on course to become the first Indian smart city a project that is ambitious but the successful completion of which is likely to spark proliferation of several other similar smart city projects in the country. For instance, as part of the plan, Delhi-Mumbai Industrial Corridor proposes to develop seven new smart cities. It is only natural that the companies investing in GIFT will have a natural advantage in the similar future smart city projects that are likely to come up in different parts of India.