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11 June 2026 9 views

GIFT City — India's International Financial Services Centre

theIAShub
theIAShub
11 Jun, 2026
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GIFT City — India's International Financial Services Centre
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India's first and only IFSC, established to regulate cross-border capital flows and position India as a global financial hub — frequently tested in UPSC Prelims on financial infrastructure and SEZ models.

Why in News

The article highlights GIFT City's role in regulating cross-border capital channels, driving total internal and outbound flows to $1.40 billion and $2.35 billion respectively, in the context of India's FDI decline.

Key Facts

  • GIFT City stands for Gujarat International Finance Tec-City — India's first operational International Financial Services Centre (IFSC).
  • Located in Gandhinagar, Gujarat — operational since 2015 under the SEZ Act, 2005.
  • Governed by the International Financial Services Centres Authority (IFSCA), established via IFSCA Act, 2019 — a unified regulator for all financial services in GIFT City. (UPSC Mains Usage: Links to GS3 — Financial sector reforms, regulatory architecture, and capital account liberalization.)
  • GIFT City allows transactions in foreign currencies — exempted from Indian capital controls under the FEMA (Foreign Exchange Management Act), 1999
  • Hosts over 500 entities including global banks, insurance companies, aircraft leasing firms, and fintech startups as of 2026.
  • Provides tax incentives: 100% income tax exemption for 10 consecutive years out of 15 years for units in IFSC under Section 80LA of the Income Tax Act.
  • Facilitates bullion trading, aircraft leasing, offshore banking, derivative trading, and fund management — aimed at repatriating financial services currently outsourced to Singapore, Dubai, and London.
  • Reported total cross-border capital flows of $1.40 billion (internal) and $2.35 billion (outbound) — modest compared to global IFSCs like Singapore or Dubai.

Quick Revision Box

Term

Detail

Full Form

Gujarat International Finance Tec-City

Location

Gandhinagar, Gujarat

Regulator

IFSCA (International Financial Services Centres Authority)

Legal Framework

SEZ Act, 2005; IFSCA Act, 2019; FEMA, 1999

Tax Benefit

100% income tax exemption for 10 out of 15 years (Section 80LA)

Key Services

Offshore banking, aircraft leasing, bullion trading, fund management


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