Gandhinagar: Scores of young and exhausted finance professionals file out of massive glass-fronted buildings at sundown. The sun bounces off the glass as the men and women are ferried home in office vans through manicured streets. The scene is vastly different from the busy business districts of Gurugram and Mumbai, where professionals head to the nearest pub or restaurant after work.
But Gujarat International Finance Tec-City or GIFT City, India’s glitzy new financial business district and Prime Minister Narendra Modi’s pet project, is a dry and lifeless hub.
People who work here say that this shiny new smart city lacks a soul, buzz, and booze, which are necessary accessories for a young urban workforce in the new India. And, it’s failing at the walk-to-work goal too. For now, GIFT City is in the poised-to-take-off mode.
Located in Gandhinagar district, GIFT City was conceptualised in 2007 and is touted to be India’s first greenfield smart city and International Financial Services Centre (IFSC). Today, Gift City is home to more than 20,000 employees across the 400-plus companies such as Oracle, Bank of America, Cyril Amarchand Mangaldas law firm, Citibank, State Bank of India, Bombay Stock Exchange, and the National Stock Exchange. There is also a commodity bourse and a bullion exchange.
“They have made it beautifully, but the intention was to make this like Singapore. That objective seems to have taken a back seat,” says Sudhi Ranjan Saha, holding a hot cup of tea and a cigarette, standing outside his office building in Tower 1. He worked in GIFT City for six months in 2015 and has been working here again since the last two years.
Saha is mindful of the prohibition in GIFT City like elsewhere in Gujarat, and the proximity to Gandhinagar doesn’t help either. “In banking and finance, liquor and a buzzing city are part of the culture. Ahmedabad has it to a certain extent, but it is a laid-back city,” he said.
There are other problems too. So far, only one residential project is complete—Janaadhar Mangala with houses for the lower-income groups; a few others are underway. But GIFT City’s ‘walk to work’ moto remains a dream. Unless one owns a vehicle, commuting from Gandhinagar or Ahmedabad to GIFT City is a struggle. A lone five-star hotel and a few scattered restaurants don’t quite cut it as post-work entertainment.
Tapan Ray, managing director and Group CEO of GIFT City, did not respond to ThePrint’s calls and text messages.
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A far cry from Singapore
The vision behind Gift City was to create a self-reliant city with every infrastructural service imaginable—from office spaces, residential apartments, schools, hospitals, and hotels to clubs, retail, and recreational facilities. The ultimate goal was to compete with global financial hubs like Dubai and Singapore.
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However, experts argue that it is a far cry from the Singapores and the Dubais of the world, even though the city, spread across 886 acres of land with 62 million sq ft of built-up area, houses various modern infrastructural marvels—a utility tunnel, a district cooling system, and an automated waste collection system. So far, more than 22 million square feet have been allocated to companies, with a total committed investment exceeding $240 million.
“While many companies have shown interest in GIFT City, a lot of them only have shell offices with a small set up. Majority of their workforce is in places like Mumbai,” says Ramakant Jha, who served as the managing director and Group CEO from 2010 to 2015 and oversaw most of the city’s physical infrastructure development. Although construction began in 2012, the sounds of drills and the movement of cranes are still commonplace.
GIFT City has an exclusive domestic area and a multi-service Special Economic Zone (SEZ). In 2015, the Modi government also notified the IFSC to attract business outside the domestic economy’s jurisdiction. IFSCs deal with flows of financial products and services across borders. As of now, the Global Financial Centres Index ranks GIFT City at the 62nd position, far from Singapore, which holds the third position, following New York and London.
The GIFT IFSC offers a number of benefits—total tax exemption for 10 years for office units in the IFSC area, no minimum alternate tax for companies opting for the new tax regime, Goods and Services Tax (GST) exemption on services received by units in the IFSC, and for investors, no GST on transactions carried out in IFSC exchanges, and a range of state subsidies.
The setting up of a unified regulator for the IFSC, the International Financial Services Centre Authority (IFSCA), which combined the roles of four domestic regulators such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Pension Fund Regulatory and Development Authority (PFRDA), and the Insurance Regulatory and Development Authority of India (IRDAI) further spurred investment.
Gift City also offers incentives for non-IFSC SEZ units such as exemption of customs duty for all goods imported into the SEZ, GST on services, and a single-window clearance for all approvals from the Union or state government.
But senior professionals from across the world haven’t moved here because they have all possible facilities in business districts like Singapore, Jha says.
“We have not been able to match it. Let alone better it. There is an entire ecosystem that has been developed there. We have to be careful that the vision is not lost,” he adds.
About 10 years ago, Gift City company had prepared a region plan, covering an additional 2,500 acres in the adjoining area. Since the ultimate target was to have about one million people working in GIFT City, the city needed to be large enough to be able to provide office spaces, housing, schools, colleges, hospitals, and entertainment for at least three members per family. The current size simply cannot provide.
The government is acting on it now, as per reports. The expansion will add 2,300 acres spread across four villages to the project area.
“The IFSC, a unified regulator, creating capital markets products that are being traded out of Gift City and hand-holding banks and financial institutions with speedy clearances has attracted companies to the business district, creating a gateway for investors to come into the country, into Gift City,” says Deven Choksey, managing director of DR Choksey FinServ Pvt Ltd, a Mumbai-based wealth management and investment advisory firm.
However, prohibition laws and a lack of options to unwind after work are still major deterrents for multinationals and foreign investors. “This is what they need to focus on in the second phase (of GIFT City expansion),” Choksey adds.
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All work, no play
In July last year, Singapore High Commissioner Simon Wong, in an interview with The Indian Express, called GIFT City “quite a ghost town after working hours.”
But it is quite desolate even during the day.
At about 1.30 pm on a Wednesday, during the peak lunch hour, Bunty Rajput leisurely stands behind the till at Sankalp Express, a small South Indian eatery. It’s the only restaurant near Gift Towers 1 and 2. In any other business district, there would have been a queue of people waiting for a table, but Sankalp Express’s manager, Rajput, can afford to relax. He has finished serving the two tables that were occupied.
Behind the eatery is a small tea shop next to a parking lot. As offices empty out in the evenings, every second person heading to the parking lot makes a pit stop here.
Gift City’s solitary five-star hotel, Grand Mercure, opened its doors in 2019. It has two sparsely-occupied restaurants—Sangam, an all-day multi-cuisine diner with a chic fusion decor, with mandala art on the back of chairs and tall lamps hanging from the ceiling; and Samorah, a fine-dining specialty restaurant offering the famed Gujarati thali. The Grand Mercure is also the only place in the otherwise dry Gift City where one can quell their longing for a chilled beer or a peaty scotch. Permit holders can buy booze from the hotel’s liquor shop and drink in their rooms.
There is also a Gift City Club, complete with two restaurants, a pool and a sports bar, Afterworx.
However, without permission to serve liquor, the bar’s image on the club’s website shows four clinking glasses—not beer mugs or champagne flutes, but tumblers filled with juice and water.
Dimpi, who has been working at Grand Mercure for seven months, is among the few who work in Gift City and live there too. The hotel has leased houses in the Janaadhar Mangala complex for its employees.
“For every need, small or big, I need to go to Gandhinagar. We just have a small grocery shop to buy staples like eggs and bread. There’s no mall, no cafe,” she says.
Electric buses run by the state transport corporation connect Gandhinagar to Gift City, but traveling to the city for almost everything turns out to be quite an ordeal.
For Hatim Khokawala, who joined a US-based chipmaker right after college, GIFT City’s environment is “very nice.”
“My company provides a lot of things such as transport, a nice cafeteria,” Khokawala says. But there are a few things he isn’t quite getting a taste of. The first is cosmopolitanism. “Those I work with are mostly locals from Gujarat,” he says. His second complaint is ubiquitous throughout the Gift City—a place to hang out after work.
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Gujarati pride
Despite the problems, there is a lot of Gujarati pride. Local employees, heads of businesses, as well as industrialists talk about GIFT City as an ambitious vision that is taking its natural time to shape up.
Gujarat has successfully created multiple investment hubs across the state over the years, such as the ones at Sanand or Tapi. But these are all mostly industrial manufacturing estates. GIFT City, in comparison, is a new learning curve for the state.
GIFT City enjoys bipartisan support in the state, says Amit Dholakia, professor at the Maharaja Sayajirao University of Baroda.
“The Congress never raised any questions regarding the GIFT City inside or outside the assembly. Overall, it is seen as something that’s good for Gujarat, something that will put the state on the global map. It is associated with words such as pride and vision,” he adds.
Proponents like to highlight the upcoming metro line and blueprints for recreational facilities, which include a ‘GIFT Eye’—a ferris wheel to outmatch the London Eye.
“The frequency of the public transport buses is coordinated with shift timings. That doesn’t give employees the flexibility of staying back to wrap up some work unless they have their own vehicles,” says Chirag Patel, who has been working as a trader at GIFT City’s Dalal Street for three months.
It will take some time but GIFT will come up like Singapore, Ratan Moondra
But Patel is quick to add that transportation woes might be a thing of the past once an under-construction metro railway line, connecting GIFT City to Gandhinagar and Ahmedabad, becomes operational sometime next year.
“Look at these smooth roads, the well-planned buildings. Everything else will also come in its own time…yeh sab Modiji ka vision hai (This is all Modi’s vision),” he added.
The GIFT City company floated an Expression of Interest (EOI) in September to develop hotels, convention centres, amusement parks, green spaces, theatres, art galleries, water sports, gaming zones and so on across a minimum of 20.59 acres in the SEZ area.
“Anything new will have some hurdles. It will take some time but GIFT will come up like Singapore,” says Ratan Moondra, founder of Moon SEZ Consultants, which helps clients set up bases or conduct transactions in SEZ and IFSC areas. Moon SEZ has a small office in GIFT City and has offered its services to many Alternative Investment Funds, fund managers and ancillary companies coming into the city.
“The social infrastructure will come up, but what we also need is some regulatory changes. There needs to be a single consolidated window for SEZ and IFSC approvals,” he added.
Consultants working with GIFT City investors say the Union and state governments have been identifying roadblocks and making regulatory changes where required.
Kamal Vataliya, an Ahmedabad-based real estate consultant, says the Gujarat government made a key amendment in 2021 to spur investments in residential real estate at GIFT City.
“Earlier, only those working in Gift City could own a residential property there. In 2021, they relaxed the rule for the first 5,000 houses, saying anyone can buy a house and live inside Gift City. A number of builders came forward and at the time of the launch itself, about 80-90 per cent stock was sold,” says Vataliya, who has worked closely on commercial and residential deals in GIFT City.
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A bunch of residential projects are now under construction by builders such as Sobha Limited, Kaavyaratna Group, ATS Savvy Developers Llp, Sangath Infrastructures Private Limited, and Shivalik Group among others. Vataliya says at least two of the builders will start handing over possession this year.
The change in rules helped GIFT City get its biggest calling card—a Bollywood star. In June this year, actor Akshay Kumar purchased an opulent river-facing duplex apartment.
“Akshay Kumar’s investment is a selling point for investors outside Gujarat who want to leave busy, fast-paced hubs for a more peaceful life,” says Mitesh Thakkar, a real estate broker who has worked on deals in GIFT City.
While these are steps in the right direction, Ramakant Jha says what the project needs is some out-of-the-box thinking.
“The entire area can be notified as a national city, what we call a global finance city, and put under the Union Ministry of Finance just like how cantonment areas are under the defence ministry. All the tax collected by the finance ministry can be allocated for Gift City,” Jha says.
This way, there will be specific rules and regulations, separate from the laws of the land, that is the state of Gujarat.
Jha suggests, a small percentage—about 10 percent—of tax collected in GIFT IFSC can be set aside and ploughed back in for the development of infrastructure and social amenities in the business district.
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Better than BKC
Those on the panel had informally told ministers at the Centre about how Gandhinagar and Ahmedabad may not be able to mimic the fabric that Mumbai has, member of Maharashtra IFSC panel.
The Gift City got its IFSC tag when the BJP-led Maharashtra government, under former chief minister Devendra Fadnavis, was trying to position Mumbai’s Bandra Kurla Complex (BKC) as a viable IFSC candidate.
When it was clear that the Modi government had chosen Gift City to become an IFSC first, Maharashtra suggested a ‘hub and spoke’ model for the IFSCs in Mumbai and Gift City to coexist. One of the two centres can have the base office, while the other can host a larger setup.
“Eventually, that is exactly what is happening now. There is an informal hub and spoke model. Those on the panel had informally told ministers at the Centre about how Gandhinagar and Ahmedabad may not be able to mimic the fabric that Mumbai has. And we were never officially told to kill the Mumbai IFSC project. It’s just that the GIFT proposal went ahead swiftly, and Mumbai’s did not,” a member of the Maharashtra government’s Mumbai IFSC panel says, requesting anonymity.
But passionate advocates of GIFT City believe that there was never a competition. GIFT City, being a greenfield development pushed by Modi himself, is still a clear winner.
“This is going to be better than BKC,” Vataliya says. “You exit GIFT City and within half an hour you are at the Ahmedabad airport, which is 21 km away. You exit BKC, and there is nothing in terms of infrastructure and no guarantee on when you might reach the airport,” he adds.
The global index that ranked GIFT City at the 62nd position placed Mumbai at the 66th spot. Some experts say it is a classic chicken and egg situation. Should the infrastructure come first or the businesses?
If you build it, they will come
Ambareesh Baliga, an independent market analyst, cites the example of BKC—GIFT’s closest domestic rival.
“All you need is a couple of anchors to come in. What was BKC in 2002-03? There was only IL&FS. Then Bharat diamond bourse turned out to be a trigger. The next trigger was when a couple of banks shifted. Then you had the stock brokerage houses and so on. By 2015-16, we had all the required infrastructure and BKC became the place to be,” he says.
Baliga adds that things will fall into place in time. Everything about GIFT City is holding its breath for greatness. ‘If you build it, they will come,’ appears to be the prevailing mood.
Meanwhile, as Saha finishes his cigarette outside GIFT Tower 1, he shares that he is from West Bengal but has lived in Mumbai, Belgium, and is currently based in Ahmedabad. While his life is far from fast-paced now, he believes there is nothing in Mumbai that Ahmedabad cannot offer—with the exception of free-flowing liquor.
“If GIFT City gets a few things right, like connectivity and recreation, who knows….” Saha says, as he glances at his cup of tea. It is half full.
(Edited by Ratan Priya)