More than 100 companies have approached JPMorgan Chase to explore banking and payment services for corporate treasury operations in India’s Gujarat International Finance Tec-City, reflecting growing multinational interest in the country’s international financial hub, according to Bloomberg. The discussions involve potential activity over the next 12 to 18 months. Companies considering operations at GIFT City include multinational corporations, insurance companies, and financial technology businesses seeking more efficient ways to manage liquidity, borrowing, and cross-border payments.
Corporate treasury centers enable multinational companies to centralize cash management, financing, foreign exchange and financial risk activities across subsidiaries and markets. Establishing these operations in one location can provide companies with greater visibility over their cash positions while helping them deploy surplus capital and manage borrowing costs more efficiently.
JPMorgan said the level of corporate interest in GIFT City is unlike anything the bank has previously seen in the market. Companies are particularly interested in the ability to maintain foreign-currency accounts alongside accounts denominated in Indian rupees.
This combination could allow multinational businesses to manage both their international and domestic financial activities from a single treasury platform. It may also reduce the operational complexity involved in moving funds between subsidiaries, currencies and banking jurisdictions.
JPMorgan provides corporate treasury clients with services including physical pooling, cash concentration and notional pooling.
Physical pooling involves transferring balances from multiple subsidiaries’ accounts into a centralized account. This allows a corporate group to consolidate liquidity and potentially reduce its need for external borrowing.
Cash concentration similarly brings together funds from different business units, giving treasury teams a more complete view of available capital and enabling capital to be directed to areas where it is most needed.
Notional pooling allows companies to offset positive and negative balances across accounts without physically transferring the funds. The structure can help multinational businesses manage interest expenses and liquidity while preserving the separate accounts of individual subsidiaries.
The growing interest creates an opportunity for JPMorgan and other international banks to provide liquidity management, payments, foreign exchange and financing services to companies establishing treasury operations at GIFT City.
Located in Gujarat, GIFT City was developed as an international financial and technology center that could compete with established hubs such as Singapore, Dubai and Hong Kong.
Its International Financial Services Centre enables Indian and international companies to conduct foreign-currency transactions, access international capital markets and centralize financial activities under a specialized regulatory framework.
Companies operating in the financial center work with the International Financial Services Centres Authority, which oversees banking, insurance and capital markets activities within the zone. This structure reduces the need for businesses to coordinate with several separate regulators for their international financial operations.
GIFT City also offers tax and regulatory incentives intended to attract banks, asset managers, insurers, fintech companies and multinational corporations. A 20-year tax holiday that took effect in April has contributed to the increased interest in establishing financial and treasury operations at the hub.
Banking assets at GIFT City have surpassed $100 billion, more than doubling over a two-year period. The growth reflects increased activity among domestic and international financial institutions, as well as India’s effort to retain more cross-border financial services and capital flows within the country.
Ten corporate treasury centers are currently operational at GIFT City, including AMNS Global Treasury Centre IFSC and Amefird Treasury. JPMorgan expects multinational companies to account for much of the next stage of growth.
Companies including Adani Group, Bharti Airtel, Genpact and ZF Friedrichshafen have also been linked to plans or evaluations involving treasury operations in the financial center. ArcelorMittal has secured licenses for two treasury centers and plans to use GIFT City to support cash-pooling activities for its Indian entities.
Several factors are encouraging companies to reconsider where they locate their treasury functions. Businesses are seeking access to lower-cost financing, more efficient handling of surplus cash and greater flexibility in managing assets across currencies.
Commodity-price volatility and changes in global interest rates have made liquidity management increasingly important. Centralized treasury operations can help companies respond more quickly to funding requirements and reduce unused cash held across separate subsidiaries.
GIFT City’s foreign-currency capabilities may be particularly attractive to companies with significant international operations. Businesses can potentially hold and manage dollar-denominated assets while maintaining access to rupee services for their Indian operations.
The expansion may also help India retain greater oversight of financial activities that companies have traditionally managed from international centers such as Singapore, Dubai, London and the Netherlands.
For JPMorgan, the increase in multinational interest could create additional demand across payments, cash management, foreign exchange, trade finance and corporate lending.
The bank’s discussions with more than 100 companies indicate that GIFT City is moving beyond its initial development phase and becoming a potential base for the regional or global treasury activities of large corporations.
Not every company holding discussions will necessarily establish operations at GIFT City. Businesses must evaluate regulatory requirements, tax treatment, technology infrastructure, staffing and the costs of transferring existing treasury functions.
However, the volume of inquiries suggests that multinational companies are increasingly considering GIFT City as a practical alternative to traditional financial hubs.
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