GIFT City is the acronym for Gujarat International Finance Tec-City, which is a central business district and India's first operational greenfield smart city and International Financial Services Centre (IFSC). The concept is an institution and a Special Economic Zone (SEZ). The founding vision for GIFT City was announced in 2007 by the then Chief Minister of Gujarat, Narendra Modi, to create a world-class financial hub comparable to global centers like Singapore and Dubai. It was formally inaugurated as India's first IFSC on April 10, 2015. The primary problem it solves is bringing back financial services and transactions currently carried out in offshore financial centers by Indian entities, thereby enabling Indian corporates easier access to global financial markets.
GIFT City is divided into a Special Economic Zone (SEZ) and a Domestic Tariff Area (DTA). The SEZ area, which hosts the IFSC, is treated as an offshore financial jurisdiction and a non-resident zone under India's Foreign Exchange Management Act, offering special tax regimes and incentives. The key mechanism is the unified regulatory authority, the International Financial Services Centres Authority (IFSCA), established by the International Financial Services Centres Authority Act, 2019. The IFSCA regulates all financial products, financial services, and financial institutions within the IFSC, assuming the powers of four domestic regulators: RBI, SEBI, IRDAI, and PFRDA, concerning the IFSC from October 1, 2020. Key provisions include a 100% income tax exemption for any 10 out of 15 years for IFSC units and exemptions from Securities Transaction Tax (STT) and Goods and Services Tax (GST) on specific financial services.
The regulatory framework is constantly evolving; for instance, in 2025, the IFSCA introduced the Foreign Currency Settlement System (FCSS) under the Payment and Settlement Systems Act, 2007, to allow IFSC Banking Units (IBUs) to settle foreign currency deals locally. Also in 2025, the IFSCA notified the Capital Market Intermediaries Regulations, 2025, to create a comprehensive framework for intermediaries, replacing ad-hoc circulars. The core concept of the IFSC as a separate financial jurisdiction with a unified regulator remains the same.