GIFT City in Gujarat: Here's what you should know about India’s first IFSC and a global financial hub

GIFT City, situated between Ahmedabad and Gandhinagar, spans 880 acres. It comprises SEZ and non-SEZ zones, catering to finance, IT services, and housing

GIFT City, or Gujarat International Finance Tec-City, is a smart city and the first operational International Financial Services Centre (IFSC) in India. Designed to be a global financial and IT hub, it also houses GIFT Nifty and tracks the performance of the Nifty 50 index, but is traded on the NSE International Exchange (NSE IFSC) in GIFT City.

GIFT City, or Gujarat International Finance Tec-City, is a smart city and the first operational International Financial Services Centre (IFSC) in India. (Picture for representational purposes only)(Mehul R Thakkar/HT)

GIFT Nifty has been in the news over the last two months owing to several macroeconomic and domestic reasons. 

All about GIFT City

Located between Ahmedabad and Gandhinagar, GIFT City is spread across 880 acres along the Sabarmati River. It features a Special Economic Zone (SEZ) and a non-SEZ area, designed to host global finance, IT firms, and residential projects. Currently, about 30% of the city is operational, with another 30% earmarked for housing.

The IFSC in GIFT City enables financial transactions in foreign currencies (excluding INR) for both residents and non-residents under India's regulatory framework.

Property prices jumped 74% in GIFT City in the last five years

Over the past five years, property prices in GIFT City have seen significant appreciation. According to data from real estate consultancy ANAROCK, land values in the region increased by nearly 74%.

Prior to the COVID-19 pandemic, prices hovered around ₹4,300 per square foot. By the end of the first quarter of 2024, prices had climbed to ₹7,500 per square foot. Alongside this, residential rents increased by 40%, rising from ₹25,000 to ₹35,000 per month. Commercial office space rents grew by 32% over the same period. Meanwhile, residential capital values surged from ₹4,700 per square foot in 2019 to close to ₹8,200 by early 2024.

Union Budget 2025 proposed several incentives for IIFC Centre at GIFT City

The upward trend in GIFT City was further reinforced during the Union Budget 2025-26.

On February 1, Finance Minister Nirmala Sitharaman announced a series of incentives for businesses operating in the IFSC. Among these were targeted benefits for ship-leasing companies, insurance firms, and global corporations' treasury operations.

To ensure that more companies can avail of these benefits, the government extended the deadline for starting operations in the IFSC to March 31, 2030. In addition, existing tax concessions were extended, and exemptions were granted on life insurance policies issued by IFSC-based insurers. These measures sought to boost GIFT City as a preferred global destination for financial services.

Gujarat's GIFT City Liquor policy led to prices of housing units going up by 10% to 20%

In December 2023, the Gujarat government introduced a significant policy shift by allowing controlled alcohol consumption within GIFT City. Under the new guidelines, individuals working in the city and their official guests can consume alcohol at licensed venues such as hotels, clubs, and restaurants, provided they hold valid liquor access or temporary permit

Experts said that this has led to housing and land prices in the area going up by 10% to 20%. This has also led to several non-resident Indians investing in housing projects in the fintech hub.

"The inflow in GIFT City over the last few years has been increasing. There are multiple triggers as to why capital and rental values of commercial properties in SEZ and non-SEZ areas have also increased. These include recent incentives by the government such as relaxed regulations, exemptions and a new liquor policy," said Abhishek Bhutani, Managing Director of Logistics and Industrials, Ahmedabad, Cushman and Wakefield, a real estate consultancy firm.

Experts say that since the government permitted liquor consumption, several investors have purchased flats in the area, and prices have gone up in the last few months after the policy announcement.