India is presenting a special "gift" to the world.

The Gujarat International Finance Tec-City, or GIFT City, project — a special economic zone in India's western state of Gujarat — is an endeavor by the country to join a connected global marketplace.

Scheduled for completion by 2021, GIFT City is designed to attract international investors and the trading community and to do business in foreign currencies, of which there is still a shortage in this fast-growing economy.

Mumbai, known as the country's financial capital for decades, has seen most of the transactions conducted with the Indian rupee. The GIFT City project sets up an international financial services center, the first of its kind in the country, so investors can conduct transactions in foreign currencies according to regulations enacted in 2015.

In this way the concept is similar to what the Hong Kong Special Administrative Region does for China as a financial window, said Dipesh Shah, head of the GIFT International Financial Services Centre, known as the GIFT IFSC.

So far it has attracted 12 leading banks, including State Bank of India, 17 insurance companies, many capital market players, and law and arbitration firms. The cumulative business transactions of the banks in GIFT City have surpassed $16 billion.

"GIFT IFSC provides huge competitive advantage in terms of tax structure and supportive regulatory framework which is comparable with other global financial centers," he said, adding that other advantages include the waiver of taxes such as the security transaction, commodity transaction, dividend distribution and capital gains taxes, as well as the goods and services tax.

"IFSC entities are also eligible for a graded tax holiday for the first 10 years, apart from various other tax benefits available on (capital expenditure and) stamp duty," Shah said.

"Our vision is to create a hub where foreign investors can transact Indian securities with minimal tax and government interference, and also for domestic companies to raise funding in foreign currencies," he said.

The GIFT IFSC was ranked as the third most promising financial services center globally in a report published in 2018 by the China Development Institute in Shenzhen and Z/Yen Partners in London.

A few foreign banks have applied for licenses to operate, according to an official who requested anonymity. The official said Industrial and Commercial Bank of China has made an "evaluation of the opportunities" that the GIFT IFSC offers, and the Shanghai Gold Exchange has shown interest in connecting with its exchanges.

"GIFT IFSC will go a long way in reducing India's current account deficit in financial services," Shah said.

"The huge hinterland demand for international financial services here in this country has prompted the Indian government to tap this demand and try and create a large number of jobs through GIFT IFSC," he said.

Arunava Das is a freelance journalist based in Kolkata, India.