GIFT City aims to position India as a global financial services hub. Critically evaluate the progress made and challenges remaining.

GIFT IFSC, Gandhinagar — India's only operational International Financial Services Centre, regulated by the unified IFSCA — reached its highest-ever rank of 46th in the Global Financial Centres Index (March 2025) and topped the reputation index among emerging centres [1]. Progress is substantial in scale, but hub status remains policy-driven rather than self-sustaining.

Progress achieved

• Capital mobilisation at scale: IFSC Banking Units mobilised $52.8 billion under RBI's FCNR(B) swap facility, $11.62 billion in ECBs and $11.12 billion through bank bond listings on IFSC exchanges [3].
• External-sector cushion: RBI's USD-INR swap window (launched 8 June 2026) drew $73 billion in eleven weeks, FCNR(B) deposits alone contributing $65.40 billion, easing rupee volatility [2].
• Ecosystem depth: over 1,000 registered entities across banking, funds, insurance and fintech; IBUs now disburse nearly $20 billion in dollar loans to Indian corporates, displacing London and Singapore's share [1].
• Regulatory reform: SCRR, 1956 was amended to permit direct listing by public Indian companies on GIFT's international exchanges with a 10% public float, aligning norms with global practice [4].

Challenges remaining

• Episodic inflows: the bulk rests on a time-bound window — FCNR(B) eligibility ends 30 September 2026, ECB/OFCB 31 December 2026 — leaving structural depth untested [2].
• Administrative push dependence: uptake required direct Finance Ministry engagement with bank MDs/CEOs, indicating incentives are not yet self-propelling [5].
• Thin professional ecosystem: an IFSCA expert committee was constituted precisely to build GIFT into a global finance and accounting hub, acknowledging gaps in talent and allied services [6].
• Competitive and structural limits: Dubai (DIFC) and Singapore offer deeper legal, arbitration and dispute-resolution ecosystems; secondary-market liquidity and onshore capital-account restrictions still constrain scale.

GIFT IFSC has convincingly proved capacity for large, rapid capital raising, but not yet continuous market depth. Converting a swap-led surge into durable business demands liquidity-building measures, judicial and talent infrastructure, and calibrated progress toward capital account convertibility — allowing GIFT to graduate from a policy window into a genuine global financial centre.