JPMorgan sets up unit in GIFT city to develop derivative products

By Preeti Singh and Saikat Das  JPMorgan Chase & Co., in a first for any global bank, has set up a unit to develop derivative products in India’s newest international hub, according to people familiar with the matter.  

The US bank will pitch the products to clients in Asia-Pacific and Europe, in addition to providing support for the offerings developed from the Gujarat International Finance Tec-City, or GIFT City, said the people who asked not to be identified citing private information. It plans to hire five people in the next 12 months to lead the effort in the hub, the people added.

 

The GIFT City unit adds to the lender’s centers in Hong Kong and London for high-quality product development, sales and support, the people said. 

 

JPMorgan’s move will provide a fillip to New Delhi’s attempts to position GIFT City, located in Gujarat state in India’s western coast, as an alternative trading center to Singapore and Dubai. It shows how high-quality product development can be done out of the hub that can support not only the India-related transactions of foreign banks but also their global activities, the people said. 

 

JPMorgan declined to comment. The International Financial Services Centres Authority, the regulatory body for India’s special economic zones including GIFT City, didn’t immediately respond to a request for comment.

 

At least one other global bank has expressed interest in setting up a similar unit, said the people. HSBC Holdings Plc, BNP Paribas and Sumitomo Mitsui Banking Corp. have opened branches in GIFT City to tap into opportunities to offer services not permitted in India, including derivatives trading, acquisition financing as well as providing services for their wealthy customers.   JPMorgan opened its international business unit in GIFT City in 2022, where it’s allowed to provide services to its group entities outside the free trade zone without adding any liabilities to its balance sheet, under exemptions permitted by the regulator for economic zones.