GIFT City and the path to global financial leadership in a changing world

As India marks its 77th Republic Day, GIFT City reflects a long-term effort to align democratic governance with global economic ambition

As India commemorates its 77th Republic Day, it is an opportune moment to reflect on the country’s evolving capacity to translate democratic ideals into globally competitive economic institutions. Among the most significant contemporary expressions of this ambition is GIFT City — India’s International Financial Services Centre (IFSC) — which is steadily establishing itself within the global financial architecture.

 

GIFT City is often discussed alongside established international financial centres such as Singapore, Hong Kong and Dubai. These comparisons are understandable and, to a degree, useful as benchmarks of scale, efficiency and global integration. However, they can be misleading if viewed without adequate historical and institutional context. A closer examination suggests that GIFT City’s trajectory is neither an imitation of existing models nor an exception, but a distinct approach shaped by India’s governance framework and long-term economic vision.

 

 

Perspective is essential. Singapore’s evolution as an international financial centre began in the late 1960s. Hong Kong’s modern financial ascent gathered momentum in the late 1990s, while Dubai launched its international financial hub in 2004. London and New York, of course, are the outcome of centuries of financial development and geopolitical circumstances. Against this backdrop, GIFT City — whose IFSC became operational just over a decade ago — remains a relatively young participant in the global financial ecosystem.

 

What distinguishes GIFT City is not simply its stage of development, but the institutional context in which it is being built. It is emerging within a large, diverse and federal democracy, characterised by constitutional safeguards, regulatory oversight, public accountability and an active media. While such systems are often perceived as deliberative, GIFT City illustrates how institutional clarity and strategic alignment within a democratic framework can support the creation of globally relevant financial infrastructure.

 

A defining feature of this clarity is GIFT City’s unified regulatory architecture under the International Financial Services Centres Authority (IFSCA). As a single regulator overseeing banking, capital markets, insurance and fintech, IFSCA provides regulatory coherence and certainty that is uncommon even among established international financial centres. This framework has reduced fragmentation, enabled coordinated policy development and improved the overall ease of doing business.

 

The impact of this approach is increasingly evident. GIFT IFSC today hosts 18 foreign banks and 17 domestic banks, with cumulative banking transactions exceeding $1.5 trillion and assets surpassing $100 billion. Asset management activity has expanded rapidly, with over 200 fund management entities managing more than 300 funds and attracting investor commitments exceeding $25 billion. In aircraft leasing, more than 300 aviation assets — including aircraft, engines and auxiliary power units — have been structured through GIFT IFSC, while ship leasing has also gained momentum, with 28 vessels registered to date.

 

These developments are notable within the broader global context. Established financial centres are often recognised for their efficiency and execution capabilities. India’s policymaking process follows a different rhythm, involving consultation across stakeholders, coordination between the Centre and States, and sustained engagement with regulators and market participants. While this approach may be incremental, it contributes to policy durability and institutional stability — qualities that assume greater importance in periods of global uncertainty.

 

Positioned at the intersection of regulation, innovation and infrastructure excellence, GIFT City offers an integrated platform for international financial services. Regulatory responsiveness has been complemented by fintech innovation, while newer segments such as aircraft and ship leasing, ESG-focused investments and cross-border financial services are being actively developed. This concentration of capabilities enables deeper integration with global markets.

 

Importantly, GIFT City is not conceived as an isolated enclave. It is embedded within India’s broader economic strategy — complementing domestic capital markets, facilitating access to global capital and generating high-quality employment. Its purpose is not to replicate existing financial centres, but to function as India’s interface with global finance, aligned with the country’s economic scale and strategic priorities.

 

The evolution of GIFT City also reflects the resilience of India’s institutional approach. Reforms related to taxation, regulatory alignment and dispute resolution have emerged through structured dialogue and cooperative federalism, involving the Union Government, the State of Gujarat, regulators and market participants. This process has strengthened transparency, enhanced investor confidence and reinforced policy continuity.

 

For global investors, these institutional characteristics carry enduring significance. Predictability of law, regulatory independence and credible dispute-resolution mechanisms underpin confidence that frameworks will remain stable and adaptive over time. Such foundations are central to sustaining long-term engagement across economic cycles.

 

As India marks its 77th Republic Day, GIFT City should be viewed not as a completed project, but as a long-term institutional undertaking — one that reflects India’s broader confidence in aligning democratic governance with global economic ambition. Its progress underscores a fundamental proposition: that large, diverse democracies can build complex financial institutions capable of operating at global standards.

 

In an increasingly interconnected financial system, global financial centres do not compete solely on speed or scale, but on credibility, regulatory coherence and the capacity to evolve. GIFT City’s development highlights the importance of patient institution-building — where reforms are tested, refined and stabilised through transparent processes and sustained stakeholder engagement.

 

The significance of GIFT City, therefore, lies not in comparison, but in contribution. It adds a new dimension to the global financial ecosystem — one shaped by India’s constitutional framework, economic scale and long-term outlook. As global capital increasingly seeks diversification, resilience and regulatory certainty, GIFT City’s continuing evolution will help define India’s role as a stable, credible and enduring participant in global finance.

---

The author is MD and Group CEO, GIFT City

 

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper