India’s federal budget announced on Sunday doubled the tax holiday for businesses in the Gujarat International Finance Tec‑City (GIFT City) to 20 years. The move targets the low‑tax hub in Prime Minister Narendra Modi’s home state, offering a 15% flat rate after the incentive period.

Global reinsurers and domestic banks are already lining up to set up units, drawn by the city’s status as a gateway for international capital flows. The incentive aims to cement GIFT City as India’s premier international financial services centre, competing with established hubs like Singapore and Hong Kong.

After the 20‑year period, firms will face a 15% corporate tax, compared to the 35% baseline for non‑GIFT operations. This long‑term certainty is expected to attract more foreign direct investment, boost job creation, and strengthen India’s position in global finance.

Analysts warn that the policy’s success hinges on infrastructure upgrades and regulatory clarity. Investors should monitor the rollout of the 15% tax regime and the pace of new financial product approvals, as these will dictate GIFT City’s competitiveness against regional rivals.