What is growing and why it matters
GIFT City is riding India's strong credit markets as it competes with Singapore and Hong Kong for global capital. Banks operating there held about $193 billion in assets at the end of September, up roughly 60% from $120.69 billion in June, according to IFSCA figures K. Rajaraman shared on Bloomberg Television on Thursday.
"Sustained growth has come through credit markets, especially offered by the banks," he said, adding that most of the increase in bank assets has come from deposits held in non-rupee currencies and from companies tapping international commercial debt. Activity also benefited from a dedicated Reserve Bank of India swap window linked to foreign-currency non-resident deposits that ran from June through the end of August.
Who is building in the hub
Banks in the hub are on track to rank among the largest providers of capital to Indian companies, supporting both onshore operations and overseas expansion, Rajaraman said. The economic zone, where firms including HSBC Holdings, Standard Chartered and Mitsubishi UFJ Financial Group have built large businesses, reduces certain taxes and regulatory hurdles to make international capital raising easier.
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On the asset management side, Mirae Asset Investment Managers (India) and Jio BlackRock Asset Management have set up shop, expanding the mix of players using the platform.
Policy friction and the to do list
The surge comes as questions surface around the tax regime. According to Rajaraman, the government and IFSCA are collaborating to make sure tax incentives and other measures to attract and keep multinationals are implemented.
Officials also intend to enable Indian firms to access global investors by permitting shares to be listed in two venues, including at GIFT City. SEBI and IFSCA are drafting the rules for that structure. "Dual listing is certainly a goal."
Why investors should watch
More bank balance sheet in GIFT City can translate into more lending capacity, and clarity on incentives plus a path to dual listings could broaden how Indian firms tap international money. The bottom line: a more active GIFT City could show up in your portfolio via lenders growing fee pools and companies accessing global capital.
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