GIFT city's international exchange: Ten things about Modi's pet project

PM Modi in Gandhinagar (Photo: ANI Twitter)

A gong resonates in Gandhinagar. Only, this isn't a metallic one, but Prime Minister Narendra Modi's digital gong, announcing the launch of India's first international exchange-India INX on Monday, at the International Financial Services Centre (IFSC) in Gujarat International Financial Tech City (GIFT). With this, India has found a new place on the global financial map. 

PM Modi described the event as an 'important milestone'. The idea of GIFT City was conceived in 2007 when he was the chief minister of Gujarat.

Here are 10 things you must know:

1. The International Exchange will provide a platform for domestic companies to raise capital in foreign currency through bonds. The exchange will also permit trading in such securities. Countries from Asia, Africa and Europe will be able to raise funds from IFSC.

2. The 16-storey tower that houses the exchange is a wholly-owned subsidiary of BSE.

3. This exchange will trade in equities, commodities and interest derivatives in the first phase. Later, it will trade equity instruments of Indian and foreign companies. 

4. Masala bonds will also be available for trading here

5. IFSC houses several International Banking Units (IBUs) of banks that have already conducted business worth $1.5 billion

6. It will operate 22 hours a day to allow international investors and non-resident Indians to trade from anywhere across the globe.

7. It is one of the world’s most advanced technology platforms with a turn-around time of four micro seconds.

8. According to The Indian Express, in the next three years, BSE will be investing around Rs 500 crore in the international exchange. BSE managing director and chief executive officer Ashish Kumar Chauhan, is better than its own domestic exchange at Mumbai

9. India INX will begin operations with 100 employees, most of whom have relocated from Mumbai, apart from local and foreign personnel. In addition, about 100 brokers have applied to shift to IFSC, of which 50 have already acquired space at Hiranandani Signature, which has so far seen 30 per cent of the 4.2 million sq ft of commercial space being signed up including BSE’s India INX, Kotak Mahindra Bank and other brokerages, reports The Indian Express.

10. The GIFT City will help bring investments worth $ 1-3 trillion in the next 10-15 years

How Narendra Modi roped in BSE for the GIFT city project:

Prime Minister Narendra Modi, then Chief Minister of Gujarat, invited BSE to a book launch event in 2013, and subsequently, a Memorandum of Understanding (MoU) was signed at the Vibrant Gujarat summit in 2015. 

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The PM said, "I deliberated a lot with experts of how to make India a thought leader in the field of finance. It was clear that we would need to have the best facilities and ability to transact in all markets of the world. GIFT City was born out of this vision. Our aim was to provide world class facilities to India’s talent in finance and technologies."

Modi's dream come true:

While during the inauguration ceremony, PM Modi said that in 10 years time he would like to see GIFT City “become the price setter for at least a few of the largest traded instruments of the world”, be it commodities, currencies or equities. 

According to PM Modi, "The concept of IFSC is simple but powerful. It aims to provide on-shore talent with an offshore technological and regulatory framework. This is to enable Indian firms to compete on an equal footing with offshore financial centres."

What is GIFT city:

GIFT stands for (Gujarat International Finance Tec-City). It is India's first International Financial Services Centre -- a fully integrated city with a walk to work culture, it has the next-in-class infrastructure, connectivity, people, technology and legal framework – emerging as a platform for businesses across the world.

GIFT city is emerging as the new financial capital of the world’s financial capitals, according to website sources. The site is 12 km from the Ahmedabad International Airport and 8 km from Gandhinagar.