India’s Union Budget 2026–27, presented on 1 February 2026, introduced a significant policy enhancement for Gujarat International Finance Tec-City (GIFT City) by extending tax incentives for units operating within the International Financial Services Centre (IFSC). The announcement marks a strategic step toward strengthening India’s global financial positioning while creating a strong foundation for sustained business expansion across sectors such as aviation leasing, asset management, banking, and cross-border finance.
Extended Tax Framework Enhances Long-Term Business Confidence
One of the most impactful measures introduced in the Budget is the extension of the IFSC tax holiday, allowing eligible units to claim tax deductions for up to 20 consecutive years within a 25-year window. This replaces the earlier structure that provided a shorter incentive period, thereby significantly improving long-term planning visibility for businesses. The revised policy framework also proposes a concessional tax regime following the tax holiday period, enabling companies to maintain operational competitiveness even after the incentive phase ends. For global firms evaluating jurisdictional advantages, such long-term policy clarity plays a crucial role in investment decisions.
Strategic Implications for Aviation Leasing and Financial Services
The extended tax holiday is particularly relevant for specialized sectors such as aviation leasing, where long asset lifecycles require stable fiscal environments and predictable regulatory structures. By offering extended tax certainty, GIFT City strengthens its value proposition as an alternative jurisdiction for aircraft financing and leasing activities.
Companies operating in capital-intensive sectors benefit from reduced financial uncertainty, enabling more efficient structuring of cross-border transactions, financing arrangements, and asset ownership models. As a result, the policy is expected to encourage both new entrants and existing IFSC participants to scale operations.
Positive Outlook for Office Demand and Infrastructure Growth
Beyond financial incentives, the extended tax framework is likely to stimulate demand for high- quality commercial office infrastructure within GIFT City. Longer-term business commitments often translate into increased leasing activity, expanded operational footprints, and greater investment in integrated infrastructure. Developers and investors are expected to benefit from improved absorption rates and stronger demand visibility, supporting the next phase of commercial real estate growth within the IFSC ecosystem.
Strengthening India’s Global Financial Ecosystem
GIFT City has been positioned as India’s gateway for international finance, combining regulatory innovation with tax efficiency and foreign currency operational flexibility. The policy measures announced in Union Budget 2026 reinforce India’s ambition to compete with established global financial centres by providing a stable and forward-looking regulatory environment.As international capital flows continue to evolve, jurisdictions that offer policy certainty and operational efficiency are likely to attract increased participation. The extended tax holiday reflects a strategic commitment toward building a resilient and globally integrated financial ecosystem within India.
The Road Ahead
The extension of IFSC tax incentives is more than a fiscal measure — it represents a long-term signal of policy continuity and institutional support for GIFT City’s growth journey. For businesses operating within or considering entry into the IFSC, the announcement enhances confidence in India’s vision of developing a world-class financial and leasing hub. As infrastructure development, regulatory innovation, and industry participation continue to align, GIFT City appears well-positioned to enter a new phase of expansion driven by global integration and sector-specific specialization.
