What is GIFT City? The Commercial Hub In Spotlight Over Massive Spike In Gold, Silver Imports From UAE

A trade research group has raised questions on a huge single-year, 210 per cent spike in bullion imports from United Arab Emirates to India through Gift City exchange, an under-construction commercial hub in Gujarat. Global Trade Research Initiative (GTRI), the research group which has highlighted the fact has said in its report that the spike may be due to concessional tax rates, but has expressed surprise over how silver import through GIFT City exchange meets all procedural requirements while importers wanting to import through other Indian ports are told that they are not fulfilling conditions for import.

As per data published by GTRI in its report, India's bullion import from UAE has spiked 210 per cent in financial year 2023-24. The value stood at USD 10.7 billion. Out of this silver imports were worth USD 5.4 billion.

It has been mentioned that although a concessional tax rate of 8 per cent may be the reason for the spike. Almost all of India's silver imports are being cleared from GIFT City exchange with movement of the precious white metal through other Indian ports has come down considerably.

“The key concern is how imports cleared through Gift City meet the rules of origin requirements specified in the India-UAE FTA when importers from other ports fail to meet these. This is strange as the Dubai-based suppliers may be the same in both cases. There is apprehension that imports from Gift city might violate rules of origin conditions,” GTRI chief Ajay Srivastava said as quoted by The Hindu.

What is GIFT City?

GIFT City or Gujarat International Finance Tec-City is an under-construction commercial hub that's is being set-up in Ahmedabad District of Gujarat.

Advertising 'Hurdle Free Business At The GIFT City' the official website says that the hub is '...designed to be at or above par with globally benchmarked business districts...'

When was GIFT City made?

The development of the GIFT City is ongoing but the construction started way back in 2007 after Gujarat government announced the plan to set up the city. The development gained pace when Narendra Modi became prime minister in 2014. It became India's first, operational International Finance Services Centre (IFSC) in 2015.

What sort of business activities take place in the GIFT City?

Financial firms, banks, fund management corporations, aircraft leasing companies and even stock markets have acquired presence in the GIFT City.

On its official website, GIFT City says that the hub is targeting companies in sectors like Banking, capital markets, fund management, insurance, bullion, finance company, aircraft leasing, ship leasing, global in-house centers (GICs),fintech, foreign universities, and ancillary services.

How many companies are operating in the GIFT City at present?

More than 200 companies have a presence in the GIFT City. Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have set up their offices there. Major banks like State Bank of India, Standard Chartered, JPMorgan and others have started operations.

Is it just a commercial city? Or there is residential space as well?

As reported by The New Indian Express, about 5000 residential units have been occupied inside GIFT City. This means that the commercial hub is home to about 15 to 20,000 people.

Published on: Tuesday, July 09, 2024, 03:39 PM IST