A fresh new star is rising in India's finance sky! The Gujarat International Finance Tec-City, or GIFT City, is now turning heads as banks rush to tap into India’s booming demand for US dollar loans. Forget the old giants like Hong Kong and Singapore — this Indian hub is snatching away big chunks of business. In the financial year ending March, banks at GIFT City disbursed nearly $20 billion in dollar loans to Indian companies. That’s a whopping one-third of all such loans given worldwide to Indian firms! Just two years ago, this figure was a modest 16%, shows the data from the International Financial Services Centres Authority (IFSCA), the authority that runs the hub. Big names are betting big here. Mitsubishi UFJ Financial Group (MUFG), which opened shop in GIFT City in 2022, now lends most of its $20 billion India balance sheet from here. According to insiders, two-thirds of MUFG’s India book is from GIFT. MUFG’s deputy chief executive, Shashank Joshi, shares that the bank offers various cool products like foreign currency loans, structured products, and trade financing to corporates right from GIFT. HSBC is also growing its footprint. Hitendra Dave, HSBC’s India CEO, reveals the bank is boosting trade finance and branching out into wealth and cross-border market products. HSBC now manages about $10 billion assets at GIFT City, offering close to 50 international services — and they plan to launch insurance products soon. What’s the secret sauce? GIFT City offers juicy tax perks! Start with a 10-year tax holiday on business income. The biggest carrot: no withholding tax on loans, which means cheaper financing for companies. In contrast, places like Hong Kong and Singapore charge up to 15% withholding tax. Standard Chartered’s Sachin Shah notes that borrowing costs in GIFT City are 50 to 70 basis points lower depending on company profiles. This sweetens the deal for Indian corporates. The wave is shifting: "GIFT City is taking a larger share of the offshore borrowing market for Indian companies," says Vivek Ramji Iyer, a partner at Grant Thornton Bharat LLP. He warns that this growth signals trouble ahead for traditional hubs. Why now? India is gearing up for a massive investment boom. After tough times, businesses are ready to spend big. S&P Global Ratings predicts about $800 billion capex from 2026 to 2030, and a stunning $1 trillion by 2035! Banks and private lenders want to fuel this growth, especially as China’s property crisis dims their market. Even Indian banks are shifting gears. Axis Bank closed branches in Hong Kong, London, and a few other places, moving their foreign business to GIFT City. It's like the mothership calling home! K. Rajaraman, chairman of IFSCA, is the cheerleader and regulator rolled into one. He points proudly to successes like the move of the Nifty equity derivatives contract from Singapore to GIFT City, skyrocketing turnover to $1 trillion from $255 billion last year. Still, the journey is just starting. Challenges remain — attracting top talent and matching the perks and vibe of older hubs is tough. Some efforts, like green bond trading or foreign equity capital raising, have yet to take off. Rajaraman’s dream? To make GIFT City India’s financial pride, offering global capital to corporates at the best rates. Experts like Yashraj Erande from Boston Consulting Group applaud rapid progress but say GIFT City needs bigger scale and a richer market with multiple products to truly roar. Will GIFT City be the new financial tiger of Asia? The exciting race has just begun!