“Active in the mornings but a complete ghost town by the evening”. That is how Singapore’s high commissioner described Gujarat International Finance Tec-City or more popularly known as the Gift City.
GIFT City is being built along the Sabarmati river with the aim of creating a financial hub like Singapore in India. The dream, however, is still in its infancy. The project began in 2012 with the goal of building more than a thousand skyscrapers and creating a million jobs. Despite laying the first foundation stone 9 years ago, the project is still incomplete and under construction.
The Reality is Far From the Promises
There are two zones in Gift City: GIFT City and Gift IFSC. In this 883-acre city, you’ll find offices, residences, as well as all amenities required for a metropolis to function smoothly.
Why is It Yet to Take Off?
As a financial hub, GIFT City promises to provide services such as capital market transactions, banking services, offshore asset management and other financial transactions. Despite its potential, the city has failed to deliver and is a long way from becoming another Singapore.
While IFSCA was created as a single window for all regulatory activities, there have been several questions pertaining to its attractiveness. The following are some of them:
The Indian rupee is not freely convertible
LRS Scheme not at par
Transactions are not instantaneous
Restrictions on pledging
Will It Ever Become Another Singapore?
The Gift City project has been very slow to get off the ground. The land allotment process took four years from the moment the project was conceived in 2007. In 2012, work began, business regulations were issued in 2015, and an international exchange was launched in 2017. A chairman of the IFSCA was appointed only in 2020.
In spite of its unmatched advantages, GIFT City has been unable to attract businesses and investors.
Financial institutions, law firms, and consultancy firms have just taken token offices in the city while most of their operations are still conducted in Mumbai. Also, about 20 Alternate Investment Funds have not yet started operations, licensed by the IFSC.
A bold idea by the Indian government, GIFT city has much potential, but it requires a lot of work and support to bring to life. After witnessing the subprime crisis of 2008, the pandemic, as well as the current global turmoil, only time will tell how much enthusiasm will remain for this ambitious project!
Kishan Thakkar is working as a writer for the real estate and architecture industry. His experience includes working for various reputed firms. He is currently pursuing MBA in Business Management and handling operations for The Real Talks platform. He has a penchant for research, analysis, and understanding various fields. Discipline is the key to balance his diversified interest and work routine.