GIFT City bets on aircraft leasing, treasury hubs to deepen India’s capital markets

GIFT City is aggressively promoting aircraft leasing and treasury operations as part of a broader effort to deepen India's capital markets and bring more international financial activity onshore.

Speaking to CNBC-TV18 at the Leadership Collective event, Sanjay Kaul, MD and Group CEO of GIFT City, said the financial hub is prioritising sectors where India has strong underlying demand but where financing activity continues to take place overseas.

Aircraft leasing has emerged as one such focus area.

According to Kaul, India has around 1,000 leased aircraft currently operating while domestic airlines have order books estimated at between 2,000 and 2,500 aircraft.

"A majority, if not all, of the leasing financing of these aircraft happens outside the country," Kaul said.

"If India is one of the largest-growing aviation markets, why should the financing not happen from within India?" he asked.

GIFT City currently hosts more than 40 aircraft lessors as policymakers seek to position the International Financial Services Centre as a domestic hub for aviation financing.

Kaul said the push reflects a wider strategy of aligning financial services with India's economic strengths.

Alongside aviation finance, GIFT City is also targeting global treasury operations.

Traditionally, Indian companies raising overseas capital have operated treasury functions abroad because the ecosystem and financing infrastructure were concentrated in foreign financial centres. Kaul said GIFT City's growing capabilities are beginning to change that equation.

"Now we have our international financial services centre within the country, which offers, if not all, at least a majority of those services," he said.

"It gives them comfort that they are nearer home."

Kaul said Indian multinational companies operating overseas are a key target for treasury-related activity within GIFT City.

He stressed that treasury operations extend well beyond borrowing and lending, covering broader financial management and capital allocation activities.

The strategy appears to be gaining traction among financial institutions.

PD Singh, CEO of India and South Asia at Standard Chartered, said the bank's early investment in GIFT City has delivered strong growth and enabled new business opportunities.

"We were the first foreign bank there," Singh said, adding that Standard Chartered now provides US dollar settlement infrastructure for the centre.

According to Singh, 11 banks are already operating on the settlement rails, which are also being opened for cross-border payments.

"So payments that earlier took a day or a day and a half to clear are now almost real-time and can happen instantly," he said.

Singh said the breadth of transactions being conducted from GIFT City demonstrates growing scale.

He cited refinancing of education loan books, social bond financing, aircraft and shipping finance, overseas direct investment-linked capital flows and commodity hedging among the activities already undertaken.

"We are no longer in the discovery phase," Singh said. "It is now about making sure that we ramp up."

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Kaul said funds and capital formation remain central to GIFT City's ambitions, although some procedural frictions continue to exist.

He clarified that these are not major policy hurdles but operational issues and matters involving international recognition arrangements.

As GIFT City expands, Kaul said regulatory clarity, stability and sovereign comfort remain critical to attracting global capital and strengthening India's position in international finance.