BS BFSI Summit: Why go to Mauritius, come to GIFT City, say fund managers

BS BFSI Summit: As GIFT City gains traction, panellists agreed it is well-positioned to become a key player in international finance, transforming India's role in the global financial landscape

Asset and fund managers at the Business Standard BFSI Summit on Friday emphasised the growing appeal of GIFT City as a cost-effective and strategic alternative to traditional financial hubs like Mauritius and Singapore. Speaking on ‘What GIFT City Offers to banks, insurance firms, and asset managers’ at the Jio World Centre, industry leaders underscored the benefits of locating fund management and financial services within the International Financial Services Centre (IFSC) in Gujarat.

 

“Now, consultants are saying, ‘Why are you in Mauritius? Come to GIFT’,” said Dipesh Shah, from the International Financial Services Centres Authority (IFSCA). With the Centre offering firms the benefits of offshore heavens within India, many companies no longer feel the need to move operations abroad, said Shah. 

GIFT City: Opening doors for global fund managers

 

The panel, which included representatives from PwC, Mirae Asset Investment Managers (India), HDFC International Life & RE, and BNP Paribas, agreed that GIFT City is not only attracting Indian financial institutions but also global investors who see value in establishing themselves closer to India’s markets.

 

Kunal Shah, partner at PwC India, highlighted the Centre’s tax benefits for Indian investors, calling GIFT a ‘win-win’ for both fund managers and investors. “GIFT offers opportunities to undertake fund management activity for foreigners, non-resident Indians (NRIs), and Indians within India,” he said. 

Accessible to global and Indian Investors

Vaibhav Shah, senior vice-president, Mirae Asset Investment Managers (India), spoke of the rising global interest in GIFT City. “Wherever I travel, I see curiosity and excitement around GIFT City. We have been managing a $300 million fund from there, with high acceptability among NRIs,” he said, adding that foreign nationals have become significant investors.

 

Shah added that further easing of fund transfer protocols for NRIs and foreign nationals will be hugely beneficial, given the positive reception GIFT has received globally.

 

GIFT City is a ‘multi-decadal opportunity’

Rahul Prasad, chief executive of HDFC International Life & RE, discussed GIFT City’s importance in expanding India’s insurance market. “We have launched six insurance products in just 14 months... GIFT City is a ‘multi-decadal opportunity’ with significant room for growth.”

 

He added, “We’re in constant dialogue with the IFSC authorities, who have been keen listeners, working to resolve concerns and support our expansion.”

 

Enabling India’s $5 trillion economy ambitions

Ganeshan Murugaiyan, head of corporate coverage & advisory, BNP Paribas, praised GIFT City’s role in India’s ambitions to become a $5 trillion economy. He noted that several multinational corporations are already transferring treasury centres from Singapore to GIFT City. Murugaiyan also highlighted GIFT City’s importance in structured finance and aviation, pointing out that BNP Paribas now routes much of its aviation financing through GIFT.

 

“For financing in clean energy and beyond, GIFT City is becoming increasingly important,” he said, predicting that structured finance would continue shifting to the IFSC.

 

As GIFT City gains traction, panellists agreed it is well-positioned to become a key player in international finance, potentially transforming India’s role in the global financial landscape.

 

What is GIFT City?

GIFT City, or Gujarat International Finance Tec-City, is India’s first smart city built as a global financial hub on the banks of the Sabarmati River, covering 886 acres. This modern business district supports both Indian and international financial institutions, allowing them to provide cross-border banking and financial services within India.

 

GIFT City hosts International Financial Service Centres (IFSCs), regulated by the Indian government, offering infrastructure for offshore banking, asset management, insurance, and capital markets. The city also caters to IT and business process outsourcing firms. With a mix of commercial and residential spaces, GIFT City aims to create a world-class environment for financial services, supporting India’s ambition to become a key player in the global financial industry. Catch all special coverage of the Business Standard BFSI Summit 2024 here: BS BFSI Summit 2024