Indias first financial services hub gets going

India Inc. Staff

GIFT City in the state of Gujarat, located near Ahmedabad airport, has been classified as the country's model Smart City. 'India Investment Journal' caught up with its Managing Director & Group CEO, Ajay Pandey, during a visit to London to explore why it offers the ideal blueprint for India's Smart City drive. What makes GIFT City a model Smart City for India GIFT is an acronym for Gujarat International Finance Tec-City. GIFT City is one of the model smart cities in India because when the entire initiative of smart cities started off and when in June 2015 the criteria was listed, we were the only name listed as a 'model smart city'. This goes to show that we are in a way leading the pack of this journey. This was conceptualised when the Prime Minister, Narendra Modi, was the chief minister of Gujarat. It is India's first international financial services centre (IFSC), on the lines of London, Dubai, Singapore. So it has a Special Economic Zone (SEZ), taxation benefits for the banking sector, insurance sector, capital market players, broker community, among others. It is the only geography in the country where such benefits are available. The City itself is about 886 acres of land, out of which there is a component of about 260 acres which is a one-of-its-kind SEZ. The City was notified as India's first IFSC in April 2015. In the last one year, we worked very closely with the government of India in Delhi and for some budget announcements which have proved conducive enough for these players to come in. What state of readiness is this City in The way it stands today, we have quite a few players in the banking sector already operational and close to $700 million worth of transactions have already been done.

A lot of international players have begun to show their interest in coming to GIFT City. The Bombay Stock Exchange (BSE) has announced that India's first international securities and commodities exchange would open up at GIFT in the month of January, corresponding to Vibrant Gujarat 2017. Both the BSE and National Stock Exchange (NSE) are in advanced stages to open India's first international exchange. In the UK, we have held meetings with the London Stock Exchange Group (LSEG), which has a partnership with NSE. They were keen to understand the progress made. We have also had meetings in London Metal Exchange and the Lloyds Insurance marketplace. It is very special to India as a country because it is the first time something like this is happening in India. Such transactions were taking place in Singapore, Dubai and London. This is an attempt to bring back some of the jobs, businesses and other stories back to India. What are some of the plans to populate this City We are organising an International Financial Services seminar during Vibrant Gujarat, supported by the Department of Economic Affairs in the Ministry of Finance. GIFT city showcases some of the world's most unique infrastructure. A few things to flag up include:

Smart street lighting
The first city where water from the tap is drinking water
Dual source of power supply
Automated waste disposal system
India's first district cooling system, which is 30 per cent more cost efficient
A certain portion of the City's power that is getting covered through the solar infrastructure.
Zero discharge of water in the city, to ensure we don't waste any water - it is used either for air conditioning, cooling purposes or irrigation purposes.
Many elements of green standards have been followed

So the hardware is in place alongside some of the softer elements like competitive tax regime, international arbitration centre and ease of doing business. Therefore, the City is smart not only in terms of the infrastructure but also as India's first financial services centre.

What are some of the businesses already based at GIFT City

We have 3,500 already working there. There are 10 banks already operational, all leading Indian banks including ICICI, State Bank of India, among others. Two of India's large insurance companies - New India Insurance and GIC - are already operational and Tata Communications outfit has a presence there. Oracle has declared GIFT City as their fourth software development centre in India. The City is being developed on a walk to work concept with residential buildings and an operational school with 500 kids enrolled. So the City is already up and running and ready to accept more businesses. This year will mark the beginning of a great ecosystem. The location is also ideal, just 15-20 mins from Ahmedabad airport, which is well connected to Delhi and Mumbai; and direct flights to major international destinations. India's first bullet train is planned between Mumbai and Ahmedabad.

How interested have other countries been in this initiative

They are all very interested in India and for the first time now they have a defined geography that also has regulations which are conducive for them to do business. Everyone wants to be part of India's growth story but what GIFT has done is to enable the whole interest to a different level all together. Our story is no longer a power point or a planning story. It is an already operational story, which will serve as a model for other smart cities of the country.

What are some of the crucial aspects involved in creating a Smart City

It has to be planned well in advance. Unfortunately, in India businesses come first and the infrastructure follows which means you are always in a catch-up situation. But our learning is that if you have great infrastructure, it gives a lot of confidence and brings in fair amount of discipline right from the word go. Through a special clause of the Indian Constitution, we have been given an extraordinary power in terms of single window treatment. So our other major learning is the importance of sorting out the governance mechanism of running a Smart City. Finally, every Smart City is not only about roads, lights and infrastructure. It is also about the character of the city. It should have some kind of an identity, which in our case happens to be as India's first financial services centre. Once there is a focus on identity, then you can create an ecosystem that supports that story. There are some great plans for Smart Cities across India and the execution steps have started. I think it is early days but it is pretty much on track. The real competition among the various states will become clearer as we move along.

How is Vibrant Gujarat 2017 likely to help

GIFT is an important project done on a public-private-partnership (PPP) basis - 50 per cent of the shareholding is with the government of Gujarat and 50 per cent is a company called ILFS. Therefore, it is an important project from the government of Gujarat perspective. GIFT is organising one of the financial services seminars and we will have a host of visitors for Vibrant Gujarat visiting GIFT City as well.