GIFT City Gains Momentum as Global Treasury Destination
As geopolitical tensions in West Asia continue to unsettle global markets, Gujarat International Finance-Tec (GIFT) City is rapidly emerging as a compelling alternative hub for corporate treasury operations. According to officials, more than 15 global entities are actively considering establishing their treasury functions within India's first International Financial Services Centre (IFSC) at GIFT City.
Shifting Global Dynamics Drive Interest
Treasury operations, which involve managing a company's cash, funding, hedging, and cross-border financial flows from a centralized location, have traditionally been anchored in established hubs like Singapore, Dubai, London, and Hong Kong. However, the escalating Middle East crisis over the past three months has prompted global corporations to rethink their capital and risk management strategies, leading to increased interest in GIFT City.
Sanjay Kaul, MD and Group CEO of GIFT City, emphasized, "Geopolitical shifts have resulted in rising interest costs, fragmented liquidity, and heightened regulatory complexity. Companies are now actively exploring alternative locations that offer regulatory stability, cost efficiency, and proximity to high-growth markets."
Notable Engagements and Pipeline Growth
Recent outreach efforts have yielded significant traction. The IFSC recently hosted the senior leadership team of Evern Renewable Energy, backed by Brookfield Corporation, a global alternative investment management firm with over $1 trillion in assets under management. Additionally, GIFT City's engagements in Singapore involved interactions with prominent institutions such as Temasek, Enterprise Singapore, Goldman Sachs, DBS, BNP Paribas, Zurich Insurance, Keppel, and Jungle Ventures.
Discussions have focused on positioning GIFT City as a robust platform for international financial and technology services, including global capital flows, treasury operations, insurance, and cross-border opportunities, while strengthening collaborations in key markets like Singapore and Hong Kong.
Diverse Corporate Base and Expanding Pipeline
A diverse mix of companies has already established treasury entities at GIFT City, including:
- ArcelorMittal
- GAIL
- Indian Oil Corporation
- ONGC Videsh
- ReNew Power
- Welspun Group
This growing base is complemented by a strong pipeline of over 15 additional treasury entities. Interest spans sectors such as energy, infrastructure, global manufacturing, and renewable energy. Industry sources highlight a wide range of global enterprises in the pipeline, including:
- An emerging healthcare platform backed by a cross-border joint venture between a Mauritius-based conglomerate and a European medical device firm.
- A North America-headquartered leader in networking and enterprise technology solutions.
- A global customer experience and business process outsourcing provider.
- A large telecom infrastructure company specializing in tower and network solutions in South Asia.
- A digital transformation consulting firm focused on financial services.
Interest also extends to a clean energy company in renewable power, a diversified natural resources and mining conglomerate, and a leading steel manufacturer part of a broader industrial group in South Asia, underscoring GIFT City's cross-sectoral appeal.
Regulatory and Tax Advantages
The unified regulator, IFSCA, offers a liberal foreign exchange regime, allowing firms to transact in multiple foreign currencies with full capital account convertibility. This facilitates seamless cross-border fund flows and centralized treasury functions like liquidity management, hedging, and global funding.
Jaiman Patel, partner at Ernst & Young in GIFT City, noted, "Operating outside the direct applicability of FEMA provisions provides greater flexibility for units in GIFT-IFSC to undertake global treasury business. The 20-year income tax holiday, recently extended in the Union Budget, further enhances its appeal as an international treasury hub. Serious inquiries have surged amid global uncertainty."
Broader Ecosystem Benefits
As more firms establish operations, they will increasingly utilize banking, accounting, and legal services within the IFSC, benefiting the broader ecosystem. With a growing roster of large corporates already present, GIFT City is being taken far more seriously as a global treasury destination.
For Indian corporates, the IFSC serves as a gateway to international financial markets without relocating treasury functions overseas. For multinationals, it offers a stable and cost-efficient base to manage regional operations, positioning GIFT City as a key player in the evolving global financial landscape.
