What do Indian fintechs really need? 

Depending on who you are and what you do for a living, you could say more capital; less regulation; better talent; more fees; less competition… the list is long. And if you were one of those who said Indian fintechs need to loosen up, guess what? Gujarat heard you. 

The western Indian state is doubling down on investments and offering more sops in an area where it has long lagged behind the rest of India. 

Booze. 

Gujarat International Finance Tec-City, or GIFT City, is just a few kilometres away from the state capital of Gandhinagar, and is Gujarat’s biggest bet on turning itself into a global financial powerhouse. The state government, which has maintained a nearly six-decade-long ban on alcohol production, consumption, and sales, first began allowing alcohol for people working in GIFT City in 2023. 

The objective was to make the place a more attractive destination for professionals. But the process of getting a permit still seemed as onerous as securing a banking licence from the Reserve Bank of India. Employees needed a “recommendation officer” from their company to submit a permit form to GIFT City officials, and the permit card they were issued could only be used to take up to five people for a drink in a few designated areas. 

Two years on, the Gujarat government seems to have realised this does nothing to portray the state as the free, fun-loving paradise it thinks talented young folks would want to live and work in. 

So this month, it rolled out a few more relaxations to its GIFT City alcohol policy. Employers no longer need to provide recommendation letters, and employees can directly apply to government authorities for a liquor permit valid for up to two years.

But to be honest, alcohol or not, Indian fintechs have been eyeing GIFT City as a home base for a while now. Especially firms involved in cross-border businesses.

Already, some 100 fintechs have set up shop there.

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One founder told me he is considering moving his fintech there because it would make conducting business a lot easier—you can onboard NRI customers with far simpler KYC requirements; get incentives such as a 10-year tax holiday, and escape GST and capital gains tax if you serve foreign customers; and raise money from foreign investors a lot easier.