Down the banks of the Sabarmati river, about 10 km from Mahatma Gandhi’s austere ashram where time has stood still, is a city of high-rise, glass-fronted smart buildings. They aspire to house multinational conglomerates accustomed to a built-up infrastructure and an IT-managed world. Spread across 1,000 acres, Gujarat International Finance Tec-City, or GIFT City, is the current Prime Minister, then Chief Minister of the State, Narendra Modi’s 2008 dream.
Last September, the Global Financial Centres Index ranked GIFT City at 62nd position, higher than Mumbai, at 66, but far from Singapore, in third position behind New York and London. Amid a slew of incentives to set up shop here, a hustle culture with the Prime Minister descending on GIFT City a few times a year, and business leaders like Mukesh Ambani calling it “a gateway of modern India’s growth”, the city is projecting itself as hyper-everything: hyper-modern, hyper-connected, hyper-developing.
The development plan was approved in 2011, but a revised plan is under way. “GIFT City has been envisioned as a high-rise high-density Central Business District (CBD) targeting approximately 5 lakh employment developing 62 mn. sq.ft of built-up area which comprises of (sic) commercial, residential and social facilities,” the planning proposal report 2023 says.
GIFT City is flanked by Ahmedabad — founded in the 15th century and the centre of post-colonial learning institutes like the Indian Institute of Management and the National Institute of Design — and Gandhinagar, built on its periphery in 1965 for government offices.
The new city, about 20 minutes from the international airport and built along National Highway 48, resembles a family upstart with money, power, and the backing of a patriarch.
City limitless
“Within the next decade, it will be in the league of the UAE and Singapore for a range of business-related and financial services,” says Shaan Zaveri, 50, who runs Collated Ventures, a boutique property development agency, in Ahmedabad. He talks about the areas he feels GIFT City will see the most commerce in: insurance, fintech, offshore accounting. “But the list is becoming longer as it progresses,” says Zaveri, who also owns Swati Snacks, known for its panki (a dal-based pancake) sold from two Ahmedabad outlets. The Prime Minister, in a speech at the 20th Vibrant Gujarat Global Summit 2024, said aircraft and shipbuilding were also part of the plan.
Zaveri is from the Sarabhai family that used to own textile businesses in the city. “Maybe there is a little hype around it now, but it will soon live up to that image,” says the soft-spoken Zaveri, over the vegetarian food that his mother popularised in Swati’s first outlet in Mumbai.
In fact, GIFT City has Mumbai-megapolis ambitions, with India’s financial capital forced to share its sheen with it. In 2020, the International Financial Services Centre Authority (IFSCA) was founded here, as a unified regulator, synchronising the powers of the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, and the Pension Fund Regulatory and Development Authority of India. IFSCA oversees the GIFT City special economic zone (SEZ).
In 2022, IFSCA introduced a framework to oversee fund management, with now more than 60 alternative investment funds (AIFs) managing over $24 billion, which may have otherwise landed in Singapore, Mauritius, or the UAE, Asia’s other international finance centres.
Establishing a financial service here can get a company many benefits: like a sweet doughnut with a sugar glaze — the kind that will soon find its way to GIFT City, which now only has a club, an idli-dosa place, and the restaurant at Grand Mercure, the lone five-star hotel here.
Office units in the IFSC SEZ will get a total tax exemption for 10 years, won’t need to pay the minimum alternate tax for operating in the new tax regime, and Goods and Services Tax (GST) exemption on services received, along with other benefits. For investors, there will be no GST on transactions carried out in IFSC exchanges, no dividend distribution tax, or capital gains tax, and a range of other subsidies.
But Gujarat, a dry State, did not have Mumbai’s cultural capital. Towards the end of December 2023, the State government opened GIFT City to alcohol, with licences granted to hotels; those over 21 can now drink.
“When GIFT City competes with Dubai, Singapore, and London, it has to offer world-class facilities. Otherwise, financial services won’t come here. So, it [the law] has been relaxed to ensure that nobody has a reason not to come to GIFT City,” Tapan Ray, CEO and MD of GIFT City, told mediapersons after the announcement.
“This is a massive impetus. I think the setting up of IFSCA and allowing alcohol will help the fledgling city in a big way,” says a Mumbai-based CEO of a financial firm in the process of setting up a unit there.
Despite the intense push, companies are testing the waters, and have set up small operations in order to avail themselves of the tax incentives. The bulk of their main operations and the majority of their workforce are still in Mumbai.
Gujarat government officials and property developers feel once social infrastructure is in place, things will change, and GIFT City will become a cosmopolitan hub.
Zaveri, who has been in real estate for 25 years now and developed nearly 2.5 million square feet in niche and high-end apartments and retail spaces in Ahmedabad, began developing 1.7 million square feet of commercial space here a couple of years ago. “The kind of opportunity that GIFT City offers comes maybe once in a lifetime,” he says, adding that the lack of red tape and the single-window clearance is real. Next year, he plans to set up Swati Snacks here too. The influx of people from other States will also have an impact on both real estate and the way the tri-cities will develop in terms of culture, he feels.
Town-scrapers and skylines
Like many smart industrial cities that are being developed around the country — Auric (Aurangabad Industrial City) in Maharashtra, Dholera in Gujarat, Hubballi Dharwad in Karnataka — GIFT City works around the sound of construction noises and the movement of cranes, with at least 50 buildings, both commercial and residential, coming up.
There are currently a little over 20 glass-fronted high-rise buildings across the skyline. They employ about 20,000 people in about 500-odd companies. These include global giants like Oracle, Google, Bank of America, Citibank, State Bank of India, the Bombay Stock Exchange, and the National Stock Exchange, India’s first bullion exchange, and aircraft and vessel leasing firms. Soon, Abu Dhabi Investment Authority (ADIA) will become the first sovereign fund to set up a base here.
The GIFT City management says in the next 12-18 months, there will be state-of-the art connectivity with a metro and round-the-clock transportation. They add that within a decade, nearly 50,000 people will be working in the various companies within the city. The bullet train is also slated to help connect it with Mumbai. Now, those who work here live in Ahmedabad, but officials say nearly 4,400 apartments are under construction, and when the owners take possession, they will “walk to work”.
“I will get possession of my flat in the next few months and then we will move here. There are some issues like setting up hospitals, schools, shopping areas and restaurants, and playgrounds for the kids, but they are being developed. I see them ready in the next two to three years,” says Minesh Patel, who works in a finance company and commutes from Ahmedabad by car. One of the challenges the administration is facing is to speed up creating social infrastructure to make it a city rather than just a workspace.
“This is just the beginning. We are focussing on creating social infrastructure from state-of-the art healthcare facilities to the best schools, restaurants, and shopping and entertainment places,” a Gujarat government official says. He adds that so far, the city has modern infrastructural facilities like a utility tunnel to avoid road digging for underground cabling faults, a district cooling system that will regulate air-conditioning centrally, and an automated waste collection system.
As the State government, which holds 100% equity stake in GIFT City, expands the limits of the city to nearly 3,400 acres in the next few years, many out-of-town real estate developers — Sobha, Hiranandani, Raheja, among others — and a host of locals like Zaveri are showing interest.
An evolving culture
Gujarat, with its 1,660-km-long coastline, has India’s largest private sector port in Mundra, owned by the Adani Group, and the largest cargo-handling port in the country in Kandla. It is a logistics hub and has renewable energy sites, oil refineries, and a strong petrochemical presence. The State’s workforce is geared towards these industries, along with textiles and diamonds, all labour-intensive, with not much of a service sector focus. It is neither an information technology hub nor a financial services centre.
“While Bengaluru and Hyderabad are known for their IT sector, GIFT City’s transformative impact is poised to transcend industry boundaries and be industry-agnostic,” says Deep Vadodaria, 39, the CEO of Nila Spaces, a property developer with a focus on the city’s residences.
He gives the example of Australia-based Deakin University’s first-ever international campus coming up here. He feels diverse industries and businesses will stimulate economic growth, spur innovation, and create jobs. “The potential for GIFT City to redefine the socio-economic landscape of Gujarat is palpable,” Vadodaria says, adding that the people entering the State will also make it more rounded in its work culture too, rather than just having a single IT identity.
Janak Thakor is a realtor and member of the Ahmedabad district panchayat. “Prices have skyrocketed in just a few years,” he says. “People of this area would never have thought that one acre of their land would go for ₹10 crore [up from ₹25 lakh-₹30 lakh],” he adds.
Thakor talks to residents of Lavarpur village outside GIFT City about rising land prices. Many want to sell, given the escalation, so that they can settle down to a life that does not involve the hard labour of farming bajra and toor dal.
Just a couple of kilometres away, but in a different world, in the GIFT City club restaurant, Lalitsinh Thakor, 49, a local politician and jeweller who dabbles in land brokering, waves his hands around saying, “There was nothing here 20 years ago. It was barren, uneven riverbank land. We never used to visit this part from our village, Dabhoda, just a few kilometres from here. Look at it today. Sitting here you feel you’re not in Gujarat but in Mumbai or Dubai. Look at the tall buildings that have come up and taller ones being built.”
Saurabh (name changed to protect identity), the waiter at the glass-fronted club, says with a broad smile, “Maybe the next time you come, you can have a beer or a whisky.”
The security guard from Uttar Pradesh is delighted. The annual Filmfare Awards will be held here on January 28. “All the top Bollywood celebrities will come for it. The whole of Mumbai will be here and GIFT will become another Bombay!”
