A Global thought Leadership Platform on Fintech] on 9 December 2023
The popular Chief Minister of Gujarat, Shri Bhupendrabhai, the ministers of the state government, Chairman of IFSCA, K. Rajaraman ji, esteemed leaders of renowned financial institutions and various organizations, ladies and gentlemen.
I welcome all of you to the second edition of Infinity Forum. I remember when we met during the inaugural Infinity Forum in December 2021; the world was filled with uncertainty due to the pandemic. Everyone was concerned about global economic growth, and those worries still persist today. You are all well aware of the challenges posed by geopolitical tensions, high inflation, and debt levels.
During such times, Bharat has emerged as a splendid example of resilience and progress. The deliberation on 21st-century economic policies in GIFT City in such a crucial period is going to contribute to the pride of Gujarat. Today, I would also like to congratulate the people of Gujarat for another achievement. Recently, UNESCO included Gujarat’s traditional dance Garba in the Intangible Cultural Heritage. This is a significant accomplishment, and the success of Gujarat is the success of the country.
Today, Bharat’s growth story has shown the world what results can be achieved when policies are given top priority, when full efforts are made for good governance, and when the welfare of the country and its citizens becomes the foundation of economic policies. The Indian economy has progressed at a rate of 7.7 per cent in the first six months of this fiscal year alone. The IMF had stated in September this year that 16 percent of global growth in 2023 will be contributed by Bharat. Earlier in July 2023, the World Bank expressed greater hopes for Bharat and its economy amid global challenges. In March this year, the Prime Minister of Australia remarked that Bharat is in a strong position to provide leadership to the global south. A few months ago, the World Economic Forum also mentioned the reduction of red tape and the creation of a better investment environment in Bharat.
Today, the entire world is hopeful about Bharat, and this hasn’t happened without reason. It is a reflection of Bharat’s strong economy and the transformative reforms undertaken in the last 10 years. These reforms have strengthened the economic foundations of the country. During the pandemic, when most countries were focusing primarily on fiscal and monetary relief, we directed our focus towards the expansion of longterm growth and economic capacity.
An important goal of our reforms is to enhance integration with the global economy. We have made the FDI policy more flexible in several sectors, reduced compliance burdens, signed three FTAs, and continue to take many significant steps today. The establishment of the GIFT IFSCA, integrating Indian financial markets with global financial markets, is part of our larger reforms. The vision for GIFT City has been crafted as a dynamic ecosystem that will redefine the landscape of international finance. It will set new benchmarks for innovation, efficiency, and global collaboration. The establishment of the International Financial Services Centres Authority as a unified regulator in 2020 is a crucial landmark in this journey. Even during the challenging economic upheavals, IFSCA has formulated 27 regulations and more than 10 frameworks, opening up new avenues for investment.
You’ll be pleased to know that based on the suggestions made in the first edition of Infinity Forum, several initiatives have been launched. For instance, in April 2022, IFSCA announced a comprehensive framework to govern fund management activities. Today, 80 fund management institutions are registered with IFSCA that have set up funds exceeding USD 24 billion. Two leading international universities have obtained approval to start their courses at GIFT IFSC from 2024. The framework for aircraft leasing was issued by IFSCA in May 2022, and now 26 units have commenced operations in collaboration with IFSCA.
The resounding success of the first edition, with so much work done based on your suggestions, naturally raises the question of what’s next. Will the scope of GIFT IFSCA remain the same? My answer would be no. The government aims to propel GIFT IFSCA beyond traditional finance and ventures. We envision GIFT City as the global nerve centre for new-age financial and technology services. I believe that the products and services of GIFT City will help address significant challenges globally, and you, as stakeholders, will have to play a crucial role in this regard.
Today, one of the most significant challenges facing the world is climate change. Bharat, being one of the largest economies globally, is not untouched by these concerns, and we are aware of it. Just a few days ago, Bharat presented new commitments before the world at the COP Summit. To achieve global targets for Bharat and the world, it is imperative to ensure the adequate availability of cost-effective finance.
During our G-20 presidency, one of our priorities was to understand the need for sustainable finance to ensure global growth and stability. This would contribute to the transition towards greener, resilient, and inclusive societies and economies. According to some estimates, Bharat would require at least USD 10 trillion by 2070 to achieve the Net Zero Target. Financing from global sources is essential for this investment. Hence, we aim to make IFSC a global hub for sustainable finance.
GIFT IFSC serves as an efficient channel for the necessary flow of green capital to build a low-carbon economy in Bharat. The development of financial products such as green bonds, sustainable bonds, and sustainability-linked bonds will make the path and access easier for the entire world. As you know, Bharat has announced the ‘Global Green Credit Initiative’ as a pro-planet initiative at COP28. I would appreciate input from all experienced individuals here on developing market mechanisms for green credit.
Bharat is currently one of the world’s fastest-growing fintech markets. The strength of Bharat in fintech is aligned with the vision of GIFT IFSC, making it an emerging centre for fintech. In 2022, IFSCA issued a progressive regulatory framework for fintech. To promote innovation and entrepreneurship, IFSCA also has a fintech initiative scheme providing grants to both Indian and foreign fintechs. GIFT City has the potential to become the gateway and fintech laboratory for the global fintech world. I encourage all of you to make the most of this opportunity.
Within a few years of its establishment, the way GIFT-IFSC has become a prominent gateway for the flow of global capital is a subject of study in itself. GIFT City has developed a unique ‘tri-city’ concept. The connectivity of GIFT City between the historical city of Ahmedabad and the capital city Gandhinagar is exceptional. The cutting-edge digital infrastructure of GIFT IFSC provides a platform that enhances the speed and efficiency of businesses. You are well aware of its global connectivity. GIFT IFSC has emerged as a management that attracts the biggest minds in the financial and technology world.
Today, there are 580 operational entities in IFSC. This includes 3 exchanges, including the international bullion exchange, 25 banks, with 9 foreign banks, 29 insurance entities, 2 foreign universities, and over 50 professional services providers, including consulting firms, law firms, and CA firms. I believe that GIFT City will be among the world’s premier international financial centres in the next few years.
Bharat is a country where deep democratic values coexist with a rich tradition of trade and commerce. There is a diverse range of opportunities for every investor or company in Bharat. Our vision for GIFT is intertwined with Bharat’s growth story. Let me share some examples. Today, 400,000 air passengers travel daily. The number of passenger aircraft in our country in 2014 was 400, which has now exceeded 700. In the last 9 years, the number of aircraft in Bharat has doubled. In the coming years, our airlines are planning to purchase around 1000 aircraft.
In these circumstances, the range of facilities provided by GIFT City to aircraft lessors is truly remarkable. With the increasing movement of goods via water routes and a growing number of ships in Bharat, IFSCA’s ship leasing framework is offering an opportunity to capitalize on this trend. Similarly, Bharat’s strong IT talent, data protection laws, and GIFT’s data embassy initiative provide secure digital connectivity to countries and businesses. Thanks to the young talent in Bharat, we have become the base for global capability centres of many major companies.
In the next few years, Bharat will become the world’s third-largest economy, and it aims to be a developed nation by 2047. New forms of capital, digital technologies, and advanced financial services will play a crucial role in this journey. With its efficient regulations, plug-andplay infrastructure, reach to the large Indian hinterland economy, cost advantages, and talent pool, GIFT City is preparing opportunities that are unmatched by any other.
Let’s move forward together to fulfill global dreams with GIFT IFSC. The Vibrant Gujarat Global Investor Summit is just around the corner, and I invite all investors to participate in it. I extend my best wishes for your efforts. Let’s explore innovative ideas in addressing global challenges and take them forward.
Source: Government of India