GIFT City: Expanding global investment horizons and opportunities for financial planners

India’s only international financial center, GIFT City, has been in the works for over a decade. Spanning 1,000 acres, just a 20-minute drive from Ahmedabad’s Sardar Vallabhbhai Patel International Airport, GIFT City is finally gaining momentum with clearer policies and growing investor confidence. With more than 700 registered financial institutions now operating in GIFT City, it is quickly emerging as a hub for global financial activities.

Dipesh Shah, Executive Director at the International Financial Services Centres Authority (IFSCA), recently stated, "GIFT IFSC is quickly establishing itself as a new-age global financial center and is playing a key role in bringing global capital flows into India." Speaking at an event organized by the Financial Planning Standards Board (FPSB) India on World Financial Planning Day, Shah also emphasized the growing career opportunities in the financial services sector within GIFT City. He projected that fund management companies and other financial institutions could generate thousands of jobs in areas such as bookkeeping, accounting, taxation, and compliance.

FPSB India aims to align itself with these opportunities by providing Certified Financial Planners (CFPs) with pathways to grow in GIFT City. CEO Krishan Mishra noted, "Our goal is to equip financial planners with globally recognized skills, helping them meet the growing demand for cross-border financial services. GIFT City will play a crucial role in this." Mishra expects the number of CFP professionals in India to rise to 3,200 by the end of FY 2025.

Moreover, to align with current needs, FPSB India has launched a "Psychology of Practice" course for financial professionals, which will become part of the CFP curriculum by April 2025. This course aims to transform how financial planners approach client advisory services by blending technical skills with an understanding of client psychology.

The Growth of GIFT City

Announced in 2007, GIFT City has long been one of India’s most ambitious projects to establish an international financial services center akin to those in Singapore and Dubai. The project has received significant support from the central government in recent years, and financial institutions have steadily increased their presence in the city.

A key driver behind this progress is the International Financial Services Centre Authority (IFSCA), which was established in April 2020 under the International Financial Services Centre Authority Act, 2019. Since then, the IFSCA has focused on creating a business-friendly environment and continues to work with various ministries to make GIFT City more attractive for investors and businesses.

Currently, GIFT IFSC houses more than 700 operational entities, including 28 banks (12 of which are foreign), two exchanges, 37 insurance entities, and 319 asset management companies. The banking assets in GIFT IFSC are valued at over $65 billion, with stock exchange turnovers reaching $101 billion in September 2024.

Major Indian and international banks, including the State Bank of India, HDFC Bank, HSBC, and Deutsche Bank, have set up offices in GIFT City. Insurance companies like New India Assurance, HDFC Life, and ICICI Lombard are also present, benefiting from the 10-year tax exemption available to financial entities operating in the city. Additionally, the Central Board of Direct Taxes (CBDT) has granted tax exemptions for foreign investors earning income from capital markets in GIFT City.

Opportunities for Domestic Investors

Although GIFT City was initially designed to attract foreign investments, it offers several opportunities for domestic investors as well. Through IFSC Banking Units (IBUs), domestic investors can access global markets and conduct foreign currency transactions under the RBI’s Liberalised Remittance Scheme (LRS), which allows investments of up to $250,000 per financial year.

GIFT City also provides investment opportunities in alternative investment funds (AIFs) and mutual funds, which offer tax benefits and easier access to global financial products. Investors can explore real estate projects or trade in global equities, commodities, and derivatives through exchanges like BSE’s India INX and NSE IFSC. Furthermore, unsponsored global depository receipts (GDRs) allow domestic investors to gain exposure to foreign companies.

With its regulatory clarity, tax exemptions, and a growing range of opportunities, GIFT City is becoming an appealing destination for domestic investors seeking to diversify their portfolios.