A revdi-funded dream? Tax breaks, hype, unease: PwC reveals GIFT City’s fragile foundations

By Rajiv Shah

Backed by generous subsidies (or so-called "revdis") channeled to Prime Minister Narendra Modi’s flagship project, Gujarat International Finance Tec-City, or GIFT City, a recent PricewaterhouseCoopers (PwC) report claims it is “uniquely positioned to connect India to international markets and foster next-generation FinTech and IT innovation.”

Titled Moving the Needle on Gujarat’s GIFT City, authors Gayathri Parthasarathy and Amitabh Mukherjee explore “what it will take for GIFT City to surpass established global hubs and emerge as a leading international financial center.” They argue strongly for this politically supported initiative, highlighting its “world-class infrastructure and seamless connectivity.”

The report describes GIFT City as “India’s first operational smart city,” hosting the country’s “first International Financial Services Centre (IFSC).” It projects that within a decade, GIFT City will become a vibrant financial ecosystem, housing 32 banks, over 150 capital market intermediaries, 47 insurance and reinsurance firms, 32 FinTech and TechFin entities, over 250 alternative investment funds, and more than 30 aircraft/ship lessors and bullion market traders.

To demonstrate GIFT City’s growing appeal to global businesses and investors, the report cites its 46th ranking on the Global Financial Centres Index (GFCI) in March 2025, a notable improvement from previous years. It also ranks fifth among 15 emerging centers expected to gain prominence in the next two years and leads the reputation index among them. In May 2025, GIFT Nifty recorded a monthly turnover of USD 102.35 billion, signaling strong global investor confidence. However, the PwC survey underpinning the report reveals a contrasting perspective.

Despite claims that GIFT City is “increasingly seen as a strategic base for multinational corporations” and poised to drive FinTech and IT innovation, stakeholder interviews conducted across GIFT City, Ahmedabad, Bengaluru, Pune, and Mumbai from April to June 2025 tell a different story. About 51% of respondents believe GIFT City lacks “very high growth potential” as a financial services hub. Additionally, 60% doubt it will become a “leading international business and financial hub within five to ten years,” with only 40% optimistic about its long-term prospects. Moreover, 80% do not expect it to evolve into a niche hub for finance, FinTech, and technology.

While 77% of senior executives acknowledge talent availability in GIFT City, they note a “gap in specialized expertise, especially in key industries.” Only 17% believe ample talent exists across key sectors, while 34% describe talent as limited, 26% report moderate availability, and 23% highlight a shortage of skilled professionals. Furthermore, 54% of senior executives cite ecosystem maturity as a key limitation, with 62% pointing to challenges in attracting experienced professionals due to relocation issues. Another 46% note the absence of a robust talent pool as a drawback.

Senior executives are hesitant to relocate to GIFT City, with 63% citing limited personal and professional networks. HR departments observe that freshers are more open to relocation, while professionals with 8–15 years of experience are less willing. HR executives from financial services firms in GIFT City report high attrition rates in Global Capability Centres, ranging from 30–40%, compared to 10–20% in metro cities, indicating weak talent retention and workforce stability.

The survey also reveals that while students and freshers show high relocation willingness, this declines among experienced professionals. Compensation in GIFT City is 10–15% lower than in major metropolitan areas, with few competitive salary packages or clear career advancement pathways offered. Gujarat’s TechFin talent pool ranks seventh in India, and Ahmedabad, the state’s largest talent hub, ranks eighth among Indian cities. The report concedes that GIFT City has yet to match the maturity of India’s traditional financial hubs.

Among optimists, 78% of working professionals see “strong potential” in GIFT City, citing regulatory benefits, tax incentives, and a business-friendly environment tailored for financial institutions. These include no Goods and Services Tax on procurement, a 10-year tax holiday within a 15-year window for income-tax exemptions, exemptions from Minimum Alternate Tax for companies opting for reduced tax rates, interest income exemptions, concessional tax rates on dividend income for non-residents, and no reverse charge GST on imported services.

Based on 200 respondents, including mid-to-top-level executives, recruitment specialists, working professionals, undergraduate students, and educational institutions, the report acknowledges that 66% of senior executives view GIFT City as a potential business hub, primarily due to its tax incentives, which are seen as a key driver for business expansion.

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