How GIFT City can unlock its full potential

Explore how GIFT City is emerging as a global hub for treasury and commodity trading, driven by regulatory clarity, technology and stronger industry collaboration.

Key takeaways

GIFT City has the potential to become a global leading hub for treasury and commodity trading by scaling ambition and execution speed.
Faster regulatory evolution and wider product permissibility are essential to attract global market participants and deepen liquidity.
Developing a holistic ecosystem — across financing, hedging, derivatives, liquidity, and technology — can be more effective than a piecemeal product-specific approach.
Collaboration between regulators, corporates and industry bodies can accelerate clarity, confidence and large-scale business adoption in GIFT City.
Global best practices from Singapore, Dubai, Abu Dhabi and other financial centers can help India position GIFT City as a long-term engine of economic growth.

The regulator’s intent is very clear — they want the best global products to operate from GIFT. IFSCA is actively simplifying and clarifying regulations, but true progress will come only when a holistic suite of trading, treasury and financing products is enabled from GIFT.

Hemal Shah

Partner, Consulting Services, EY India

For your convenience, full text transcript of this podcast is available below.

Pallavi Janakiraman

Hello and welcome to the EY India Insights Podcast. I am Pallavi, your host for today.

In today’s episode, we are joined by Hemal Shah, Partner, Consulting Services, EY India to discuss how GIFT City is evolving as a global hub for treasury and commodity trading and what India can learn from leading financial centres such as Singapore, Dubai, and Abu Dhabi.

Hemal has over two decades of experience advising clients across financial services and business transformation. He specializes in helping organizations strengthen their treasury, risk management, and operational excellence frameworks to compete globally.

In this conversation, Hemal shares how the right mix of regulatory clarity, technological enablement, and collaboration can help position GIFT City among the world’s most dynamic financial centers and contribute significantly to India’s long-term economic vision. Thank you, Hemal, for joining us today.

How is GIFT City evolving as a global hub for treasury and commodity trading, and what lessons can it draw from the established financial centers such as Singapore, Dubai, and Abu Dhabi?

Hemal Shah

Gujarat International Finance Tec-City (GIFT City) and International Financial Services Centres Authority (IFSCA) have the best opportunity on hand to scale and win the global arbitrage game and be reckoned as the most powerful and dynamic financial, treasury and commodity trading centers in the world. India has mastered the skills, course, technology and scale game. We need to be more aggressive on ambition and a clear path of execution. Our target should be to contribute a minimum of 8% to 10% of our future GDP from this jurisdiction.

We just have to learn and implement fast from the emergence and the learnings from the other evolved large financial, treasury and commodity trading centers. Regulators need to increase speed of evolution to facilitate global trade, treasury, liquidity, hedging and financing transactions, and book a comprehensive set of global products to offer entities setting up shops here and having global trade presence.

First and timely movers are seeking advantage with productive and constructive dialogue with the regulators who are providing clarity, direction, vision, and all the requisite support in enablement and scaling of their business plans. They are encouraging companies to set up holistic entities in GIFT with focus on overall global trade, global liquidity, short term and medium-term financing, hedging and large-scale treasury transactions and operations, and bringing the global and the relevant skills and technology to manage the business out of GIFT GCC (Global Capability Center).

In the past one year, there has been promising development across all fronts. But yes, the pace and the change need to be faster to gain the advantage and supremacy compared to the other centers.

Pallavi

Thank you, Hemal. What are the key regulatory, institutional and technological enablers that are required to build a comprehensive treasury commodity ecosystem in GIFT City and drive greater participation from corporates to financial institutions?

Hemal Shah

Regulations need to be simple, clear and comprehensive. Its ambit of permissibility has to widen substantially. Cost needs to be economical. Options need to be in abundance for market making and market participation. More importantly, having an evolving to-be target and a futuristic blueprint of varied sets of treasury and commodity trading products, mix of holistic market participants, regulation changes, global alliances with other trading and treasury centers and organizations across the world.

This will help concentrate all the efforts in one direction and continuous dialogue with the industry and market participants will help provide clarity and planning on all developments. It will significantly boost confidence and encourage potential participants to evaluate a wider, full form, substantial and comprehensive scalable operations of their businesses in GIFT. The regulators and others involved in the region should have this as their core priority.

Pallavi

Thank you, Hemal. Where do current regulatory and operational frameworks in GIFT differ from the leading global hubs? What steps are being taken to bridge these gaps, particularly around forex hedging, cash pooling and derivatives?

Hemal Shah

The intent of the regulator is very clear. They want the best of the global products to exist and operate from GIFT. IFSCA is also taking active steps to simplify and clarify the necessary developments. But we will only flourish if we bring the holistic set of trading and treasury and financing products out of GIFT. We have to take the best practices from regions like Singapore, Dubai, Swiss, the Netherlands, Hong Kong, London and other Asian regions and ensure that entire commodity trading and treasury ecosystem flourishes and grows so that it is important to take a holistic approach rather than a piecemeal or a product-specific approach.

On the product front, be it forex or commodity trades or financing or liquidity products, or derivatives, be it OTC (over the counter) or exchanges, we need to offer what is available on the global platform and have all the market participants finding business arbitrage of doing business in GIFT. As long as we have a feasible business plan, instead of just being a short-term window of tax haven and tax arbitrage, I think that businesses will do well.

Regulators should encourage. Their vision is much beyond 10 years, and it is in sync with the GDP vision and target of 2050 and beyond. One key example of outlining the regulators’ effort is the recent Expert Committee report on commodity trading, formed by IFSCA. The report helps in classifying commodity trading as a financial product or service. It is allowing issuance of trading as a wider range of commodity and OTC derivatives for hedging. It is permitting IFC banks to engage in commodity trading products over and above the other treasury products. It is framing risk management, infrastructure and ecosystem guidelines, as also implementing macro level measures to position GIFT as a global commodity trading hub.

In summary, the regulator's proactive initiatives, such as adopting some of the expert committee recommendations aim to make GIFT City a global competitive destination for commodity trading and treasury operations.

Pallavi

How can GIFT City introduce a broader range of treasury and commodity products such as OTC derivatives, trade financial solutions and risk management instruments to deepen market liquidity and attract global investors?

Hemal Shah

The first step is to get the leading global market participants across all asset classes meet different currency peers, interest rate products, derivative products, debt products, exchange traded or OTC products, banking and non-banking or capital market products, short-term trade, long-term financing, credit insurance, rating agencies and other regulatory bodies to support smooth functioning of business out of GIFT. All of these elements are very important for GIFT to operate as a full-fledged financing, treasury and commodity trading center.

Regulators need to encourage them and make their business simpler and scalable by clarifying and simplifying business regulations related to all these products. After enabling their business, we need to attract and encourage companies doing businesses in India to look at opportunities in GIFT to set up shop. And full-GCCs as well to support their financial risk and financial supply chain, trade and trading related activities.

We need to harbor and incubate all the requisite present and future scale of business, products and technology, and entice skilled and semi-skilled professionals to prefer doing business from the GIFT jurisdiction. We need to make life simpler and of high quality by encouraging people to prefer GIFT as the location on multiple parameters – be it personal, professional or business, and not just on short-term basis. Having a long-term goal is very important over here.

Pallavi

What role can technology, fintechs and digital platforms play in transforming treasury operations, improving transparency and enhancing decision making efficiency for corporates operating in GIFT City?

Hemal Shah

This region has to be integrated with the global hubs, and it needs to evolve and co-exist with the other major regions. Technology systems for banks, exchanges, training centers, treasury centers are most pivotal to running efficient operations. Emerging technological changes and evolving digital platforms will play a substantial role in this art of the possible. Having them set up their own development centers in GIFT and incubating new products, and charting a new path for integration with other market systems will be very important and imperative.

GCC incentives to set up a full-fledged center of excellence or build a pure holistic captive with requisite skills and arm technology enablers will be a natural enabler. Market or business participants should not fear the world of technology in any form and manner in their evolution path.

Pallavi

What are the top priorities of positioning GIFT City as a globally competitive financial hub? How can collaboration between regulators, industry bodies and corporates accelerate this journey?

Hemal Shah

First priority is ease of changing and adapting regulations so that people can see a visible and encouraging regulatory arbitrage of doing business in GIFT more productive. Regulators need to rampantly work on the requisite change or clarity or simplicity of doing business from GIFT. There has to be evolving simplicity of regulations where the intent of the regulators and their attempt and reforms are taken positively and constructively.

There has to be a continuous dialogue with the industry. Industry bodies need to encourage their members to judiciously evaluate the business case on a holistic basis and also seek regular help from the regulators and other market participants or advisors, so that the same can be made scalable over a period of time. Companies also need to assess the business case of setting up a full-fledged trading and treasury entity, with substantial business and role focused on being a COE (center of excellence) out of India or out of GIFT and thereby grow its global operations – that has to be the vision.

Pallavi

Thank you, Hemal. That brings us to the end of this episode of the EY India Insights Podcast. A big thanks to you, Hemal, for sharing your perspectives on how GIFT City can unlock its full potential as a global financial and trading hub.

Hemal Shah

Thank you.

Pallavi

To all our listeners, if you enjoyed this discussion, do not forget to follow the EY India Insights podcast for more conversations on emerging business trends shaping India’s growth story. Until next time, this is Pallavi signing off.

Presenters

Hemal Shah

Partner, Consulting Services, EY India

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Duration

13m 49s

How GIFT City can transform business opportunities in India

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How GIFT City can unlock its full potential

Key takeaways

Pallavi Janakiraman

Hemal Shah

Pallavi

Hemal Shah

Pallavi

Hemal Shah

Pallavi

Hemal Shah

Pallavi

Hemal Shah

Pallavi

Hemal Shah

Pallavi

Hemal Shah

Pallavi

Presenters

Hemal Shah

How GIFT City can transform business opportunities in India

Discover how IFSC at GIFT City is becoming a world-class financial center, unlocking unique opportunities for businesses and investors.