Gift City vs Dholera: Which is Better for Investors & NRIs?

As part of the smart cities initiative, India has promoted the development of 100 new urban communities. These communities are centred around driving economic growth by utilising the power of technology to create harmonious settlements poised to shoulder the growth of Modern India.

Prominent examples of these “Smart Cities” are the cities under development in Gujarat, GIFT City and Dholera SIR. Both of these are also examples of a “greenfield smart city”, which is a term used to describe cities that are built from scratch and whose development is not constrained by existing infrastructure. 

Key Differences Between GIFT City and Dholera

While the primary objective of these smart cities involves creating smart outcomes for its citizens, they are not all similar in their designs. Each city is developed to cater to a specialised objective in India’s growth story. 

For instance, GIFT City was developed to be a global financial and technology hub that can provide a “plug and play” infrastructure for businesses seeking unparalleled growth on the world stage. Similarly, Dholera SIR is designed to be a global manufacturing and trading hub and is being built with the vision of being the “engine for economic resurgence of the country”. 

As a result, key differences exist between these smart cities housed in the state of Gujarat. These differences are highlighted below:

Infrastructure and Connectivity

Compared to Dholera SIR, GIFT City boasts a well-developed infrastructure that houses several operational financial institutions, stock exchanges, IT companies, and multinational firms. The design language of GIFT City consists of vertical high rises offering smart offices, commercial spaces and residential areas. It is also well connected by road and rail with proposed Metro linkage.

Build a successful Gift City Gandhinagar career in India’s growing financial hub.

Dholera SIR is still in its early developmental stages, with ongoing land allocation and infrastructure development. The proposed design language of this city reflects a horizontally spread-out smart city with large land parcels for industries, smart grids, and multimodal transport networks. However, it houses its own international airport and is well connected by express highways with a proposed high-speed rail link.

Investment Opportunities

Both greenfield smart cities offer unique investment opportunities for forward-thinking investors looking for their next big score. GIFT City is ideal for investors in finance, IT, commercial real estate, and fintech. Meanwhile, Dholera SIR caters to investors in manufacturing, infrastructure, logistics, and smart city projects.

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For those looking to invest in the finance industry, the unique proposition of GIFT City, which is India’s first IFSC (International Financial Services Centre), allows business setups for offshore banking, stock exchanges, insurance, and asset management firms. It also doubles for those looking to invest in IT & fintech as GIFT City offers a world-class infrastructure for IT firms and BPOs (Business process outsourcing firms) and is quickly emerging as a hub for data centres. GIFT City also offers investment opportunities in its burgeoning commercial and real estate space. 

Investors might be happy to know that Dholera SIR has the potential to be a major hub for chips manufacturing & electronics assembly, electric vehicle (EV) production and battery plants, and defence manufacturing and production of aircraft components, to name a few, thanks to its large land availability, strategic location, governmental incentives, and multimodal connectivity.

Benefits of GIFT City vs Dholera

Intended to be major economic zones for India, they offer their own distinct advantages compared to each other.

Being India’s first IFSC, businesses that have set up their operations in GIFT City get to experience tax holidays on their income generated for 10 consecutive years (applicable only within the first 15 years of operation). They are also exempted from paying DDT on dividends paid out to shareholders, along with exemptions from paying MAT if opting to operate under the new tax regime.

Dholera SIR, on the other hand, offers low-cost land allotment & lease benefits for industrial setups as well as rebates on electricity for renewable energy projects (including 100% exemption from electricity duty for 10 years for solar & wind projects). Similar to GIFT City, Dholera also offers a corporate tax holiday, although this is limited to the initial 5 years of operation, coupled with a 50% tax break for 5 more years.

Challenges and Limitations

Of course, nothing is perfect. And naturally, that applies to these cities as well. Although these cities are hubs with immense potential for growth, savvy investors might benefit from being aware of the challenges and limitations faced by these smart settlements.

1. Regulatory & Policy Uncertainty: IFSC & SIR Act regulations frequently change, causing uncertainty for global investors.
2. Infrastructure & Connectivity Challenges: Dholera SIR is still under development, with key infrastructure (airport, roads, and metro) incomplete.
3. Limited Market Participation & Global Recognition: Currently, GIFT City experiences low trading volumes, restrictions on Indian investors, and a lack of global financial institutions. Similarly, Dholera SIR struggles to attract large MNCs due to competition with established industrial hubs like Pune and Chennai.
4. Skilled Workforce Shortage: Both cities face a shortage of skilled working professionals, highlighting the need for specialised training programs & incentives to attract top talent.
5. Residential & Social Infrastructure Gaps: Because these cities are under development, the current infrastructure isn't enough to sustain a vibrant urban life to attract businesses and professionals.

Which is Better for Businesses and Investments?

Choosing the right city to set up your future business in or finding the right avenues to channel your investment can be rather tricky. To help you choose between GIFT City and Dholera SIR, here is a table outlining their main features:

Conclusion

Both GIFT City and Dholera SIR are remarkable examples of India's smart city ambitions, each with a distinct role in the nation's economic growth. While GIFT City is positioned as a financial powerhouse, attracting global banks and IT firms, Dholera SIR is set to become a manufacturing and industrial hub, driving large-scale production and infrastructure development.

For investors, the choice between the two depends on their industry focus, risk appetite, and long-term vision. GIFT City offers a well-established financial ecosystem with immediate opportunities, whereas Dholera SIR presents a high-growth industrial landscape with long-term potential.

Despite the challenges, both cities offer unparalleled investment incentives, government backing, and futuristic infrastructure. As India continues its journey towards becoming a global economic leader, these smart cities stand at the forefront of innovation, sustainability, and economic transformation.

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FAQs About Gift City vs Dholera

What are the main differences between GIFT City and Dholera?

• GIFT City is primarily a global financial and IT Services hub, whereas Dholera SIR is primarily a large-scale industrial and manufacturing hub.
• Currently, GIFT City is further along its development than Dholera SIR.
• Gift City operates under IFSC Regulations, and Dholera operates under the Dholera Special Investment Region Development Authority (DSIRDA).