GIFT City GUJARAT! NOW. The New Face of Business In Gujarat. Cover Story. The First of its Kind

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2 Cover Story GUJARAT! NOW GIFT City The New Face of Business In Gujarat hat has been lacking until now however, is a high-tech, s t a t e - o f- t h e - a r t, g l o b a l Wfinancial hub, that offers foreign businesses exactly the kind of business environment they need to thrive in Gujarat. Something that can compete with some of the world s most cutting-edge financial districts, like Lujiazui in Shanghai, Shinjuku in Tokyo and Canary Wharf in London. Enter the Gujarat International Finance Tech-City, or GIFT City as it has more popularly come to be known, India s first International Finance Service Centre (IFSC) SEZ. The First of its Kind So what will make up the GIFT City? Broadly, three components : a) a Multi-service SEZ, b)a Domestic Finance Centre/ Corporate Office / Trade Centre, and c) Associated Infrastructure & Housing and Social Facilities. With a realizable real estate potential of 62 million sq ft spread across office, Being the first IFSC in the country has its advantage as it will go a long way in facilitating foreign exchange earnings, creating employment and most importantly, making global capital available at competitive rates... We need at least four IFSCs in the country. Today, an Indian can spend up to USD $ 2,00,000 annually at a foreign stock exchange or currency market. These investors need not go to London or New York as the foreign exchanges can have their offices right here in GIFT. residential and social space, GIFT City is being developed by the Gujarat International Finance Tech-City Company Limited (GIFTCL), a company formed through a 50:50 joint venture partnership between Gujarat Urban Development Company Limited (GUDC) and Infrastructure Leasing & Financial Services Limited (IL&FS). By offering world-class infrastructure and facilities to global firms, GIFT City, located smack bang in the middle of Ahmedabad and Gandhinagar along the river Sabarmati, will cater to India s large financial services potential. Estimates put forth by GIFTCL say that the development will provide 5,00,000 direct and an equal number of indirect jobs. Common discourses on the merits of GIFT City often revolve around the - Ramkant Jha, Director, GIFT City 26 Gujarat! NOW

3 Liberty to transact in foreign currency at the IFSC in GIFT will significantly raise foreign firms investment and participation in India, - S. S Thakur, former chairman, HDFC Bank

4 GUJARAT! NOW Leading the Winds GIFT Project Multi-Service SEZ Domestic Finance Centre / Corporate Office / Trade Centre Domestic Finance Centre / Corporate Office / Trade Centre Activities in Multi-Service SEZ Processing Area Non-Processing Area Social Facilities International Fiancé Service Centre (IFCS) International Techno Prk and International Market Zone Commodity Exchanges Global Trading Exchanges Insturance Officehore Banking IT / Ites KPO, BPO Services Date Centre Related Commercial & Office Buildings Serviced Apartment & Residentail Flats Hotels & Restaurants and Food Court Business Hotel, Shopping Centres. Retail Stores and Banks Training Centre for Financial Services Medical Centre Entertainment Centre & Theature Regulator s Offices Schools (International and CBSE) Hotels Convention Centre Hospital Training Centre (Language School) Comparison of GIFT City with global Central Financial Business Districts iconic buildings that have been planned to be built here. And while we acknowledge that this legion of skyscrapers being built here is going to be one-of-its kind in Gujarat, being Gujarat! NOW, we can t help but focus on those aspects of this development that are likely to create a continuing impact on GIFT City itself as well as on the rest of Gujarat through decisions made and practices implemented. Foreign investment in India has been growing at the current dramatic pace only since the last 10-odd years at the most. Undeniably, over the next couple of decades, it is likely to increase even more dramatically, and is likely to give rise to the need of other such financial business districts across the country. Key Stats, GIFT City Target Busines Segments Estimated Employment Generation Financial Services. Banking, Product Development, Capital Market & Trading, IT Services, ITeS,BPO Services. 500,000 direct, jobs and equivalents indirect jobs. Estimated Built- Up Area 5.76 million sq. mtr, of residential + commercial + social space

5 Cover Story GUJARAT! NOW ICICI, HDFC, SBI, Bank of Baroda, Bank of India and others set up offices in Europe and South East Asia. They can now set up their offices in an IFSC and cut down on the cost of transaction... It will now be a major challenge for management institute and law colleges to churn out professionals in international finance management. This will be a boon for GIFT as these skill sets will be required for operations in an IFSC - Ramkant Jha, Director, GIFT City GIFT City, being the first of its kind Greenfield development in Gujarat, is likely to become a prime example for such future developments, in the state as well as for the country. Through the choices made here, this development has the potential to usher in a new wave of thinking about such developments ; p l a c e s t h a t p r o v i d e a g r e a t infrastructure network and a highquality working environment for businesses ; places that are energy-wise and use technology and knowledge to maximize the potential for global businesses to function at low costs to themselves as well as to the environment. Fo r e x a m p l e, t h e i n t e g r a t e d transportation system that will be implemented at the GIFT City minimizes the need to drive within the development, instead enhancing walkability between work and home. The development will also use a district cooling system, which cools buildings using chilled water, instead of airconditioning a great positive for a development that otherwise would prove to be very energy-intensive. Comprehensive water management and waste management plans designed for implementation at GIFT City will further help the development be as energy-efficient as possible. 30 Gujarat! NOW

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7 GIFT City will employ about 500,000 people in financial and related services ICT, IT, ITeS and the rest, while about 500,000 will be indirect jobs, i.e., within the support services sector, making the total employment potential of GIFT City about a million ; GIFT City will employ about 500,000 people in financial and related services ICT, IT, ITeS and the rest, while about 500,000 will be indirect jobs, i.e., within the support services sector, making the total employment potential of GIFT City about a million ; a little over 10% of the 8 million jobs estimated by the McKinsey Report. Now, since the focus of this city is financial services, the business environment here has to be what people from the financial services sector are used to. The financial services sector includes banking, trading, insurance, private equity funds, and the rest, as well as consultancy services related to financial services, such as law firms, chartered accountants etc. for example, Ernst & Young, PWC and the rest. Another focus industry within GIFT City will be IT, which will support the financial services sector here. These companies will develop information technology products for the financial services sector. GIFT City will also house a data centre designed on the principles of cloud technology ; a technology that already forms an inseparable part of the future of any business in the services sector. What kind of a development will GIFT City be, physically and process-wise? What are the challenges involved at an overall level, when you re looking at such a huge paradigm shift in the business environment of Gujarat? GIFT City is divided into two parts : one is the Special Economic Zone which caters to international services and export-oriented services, and the other is the sector that will house Domestic Financial Services. Government regulations here prescribe that export-oriented services be housed only in special economic zones. To align ourselves with this regulation, we have got approvals from the Government of India for GIFT City to house such services. 33 Gujarat! NOW

8 Cover Story GUJARAT! NOW This close proximity of domestic and international services will, as we see it, translate into a great synergistic way of working for people and businesses in both parts of the development, because of the obvious advantage of potential transactions that could happen across these zones. Any commercial products that a domestic financial service might need developed in, say Singapore for example, would now be developed right across the road within GIFT City itself. To further provide environments conducive to specialized financial services or services that work in close association with each other, we are dividing the entire GIF T City development into different enclaves, such as banking enclave, insurance enclave, market enclave, and so on, within both the domestic zone as well as the SEZ. Nowadays, financial services are carried out through consortia, where different A Business Environment That is Conducive to Business groups conglomerate for the provision of their services ; no one bank takes all the risk. So these banks are used to this type of working ; in a manner that we o t h e r w i s e c a l l e c o n o m y o f agglomeration. This is what we re creating in GIFT City : a business environment that is conducive to business. A market enclave for example would have buildings that would house stock market brokering offices, insurance agents and all related infrastructure and facilities. Within GIFT City we re also developing entertainment zones, eating areas, outdoor games etc., so people can really enjoy living and working here. Look at Nariman Point or Bandra Kurla Complex. If one wants to step out of his or her office for a quick coffee, or go to the gym, this is not possible here. GIFT City on the other hand, while catering to all the mega-scale requirements, is also in tune with these detailed working patterns of its users. To deliver both levels of these requirements, a vibrant business culture will be developed at GIFT City. This close proximity of domestic and international services will, as we see it, translate into a great synergistic way of working for people and businesses in both parts of the development, because of the obvious advantage of potential transactions that could happen across these zones. Any commercial products that a domestic financial service might need developed in, say Singapore for example, would now be developed right across the road within GIFT City itself. - Ramkant Jha Director, GIFT City, 34 Gujarat! NOW

9 GUJARAT! NOW Leading the Winds An Economy of Agglomeration The will it happen question that people ask where GIFT City is concerned, given that the nature and scale of this development is very big. But the fact is that we re talking about an economy of agglomeration as I told you before, and when we re looking at a development of this nature, we cannot spread out. The idea is to be able to walk across between any two points within GIFT City. So we necessarily need to have high-rises, and this kind of a high density area is bound to raise eyebrows. But this high-density area will also be very green ; since we re going up, we have more ground area for green zones and landscaping. What is the current status of construction at GIFT City? Work on two buildings has already started; one building has reached the fourth floor & another has reached the seventh. All infrastructure works have started and by December, these two building would be fully complete. Business with entertainment : that s how we envision GIFT City. Then ofcourse we re also developing housing for a population of 100,000 people. This residential zone would have schools. hospitals, shopping malls, playgrounds and the works. Further, this entire development will be connected by an elevated walkway to the nearest metro station which will only be 500 mts away. So, the people who do not live within GIFT City would be able to get to Ahmedabad or Gandhinagar within 10 to 20 minutes. If you ask about the challenges involved, obviously : every first has its challenges. The first one here is that of acceptance. In fact, all our efforts are geared towards completing atleast one building on the 15th of August, something that will be quite a challenge. Our workers are doing a slab every seven days. which is extremely fast, and to constantly maintain that quality of construction while keeping up this pace, is quite a task. There are a number of energy-efficient technologies, green initiatives, that GIFT City will incorporate within its working, such as district cooling, integrated transport networks and comprehensive waste and water management plants. Can you tell us a little bit more about these? Lets start with district cooling. The district cooling system is 30% more efficient than having individual airconditioning for the separate buildings. 35 Gujarat! NOW

10 Cover Story GUJARAT! NOW And the initial outlay for this system is also reduced. The overall infrastructure for this system will be laid out by GIFT City. Or take solid waste management. There will be an integrated, automated solid waste management system laid out across GIFT City, with chutes enabled with a suction system. All waste so collected would be taken to a disposal point along the periphery of the development, where all this waste will be converted into energy. This energy, though it would be a small amount, would become part of the electricity supplied across GIFT City. Water supplied everywhere in GIFT City will be purified to the extent that you can drink from the tap. And waste water collected from across the development will also be purified and used for our district cooling system. Through these mechanisms, we will have a zerodischarge system put in place where water management is concerned. In addition, we will also weave in a comprehensive rain-water harvesting system, where water collected would either recharge the ground water table or would be used for watering all the green areas. We re also encouraging solar power generation, as well as energy generated using wind power. Rooftops and vertical surfaces of some of the skyscrapers within GIFT City will have solar panels on their surfaces. So despite the total power requirement for GIFT City being too huge, about 800 MW, to be provided for by renewable energy, we re definitely trying to integrate these processes within our energy management systems. There have been some concerns voiced regarding the iconic skyscrapers that constitute the central financial business district that GIFT City is positioned to be and how these are likely to impact the environment. How would you respond to these concerns? This kind of a development may look very spectacular here, but if you go by the technology elsewhere in the world, its not that big... This is not something that we re experimenting with in Gujarat for the first time. This is how financial services function. From the business point of view, these services want to be located close to each other. 36 Gujarat! NOW

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