Parliament Panel Proposes Regional Fintech Clusters Like GIFT City

India’s ambitious fintech growth could soon be steered through specialized regional hubs. A recent recommendation by a key Parliamentary Standing Committee on Finance has suggested developing regional fintech clusters, modeled on Gujarat’s GIFT City, to accelerate innovation, investment, and policy alignment across the country.

This forward-looking proposal seeks to decentralize fintech activity, foster competition among states, and embed regulatory clarity—all while addressing the rising demand for digital financial services across urban and semi-urban India.

Why Regional Clusters Now?

India’s fintech ecosystem has grown by leaps and bounds, contributing to financial inclusion, real-time payments, alternative lending, and wealth tech. However, the growth remains concentrated in major urban centers such as Bengaluru, Mumbai, and Delhi NCR. GIFT City, India’s first operational International Financial Services Centre (IFSC) in Gujarat, has emerged as a promising fintech and financial innovation zone.

Recognizing GIFT City’s success, the parliamentary panel now suggests replicating this model across other regions, enabling state-level fintech hubs that can support local innovation while ensuring national integration.

“The development of regional fintech clusters would help democratize fintech infrastructure and capabilities, ensuring India’s tech-led financial revolution reaches all corners of the country,” the committee noted.

 What GIFT City Offers—and Why It’s a Model

GIFT City has gained attention as India’s flagship financial innovation zone, offering tax incentives, relaxed regulations for financial entities, access to global capital, and a sandbox environment for fintech experimentation. It houses the IFSC Authority, India’s unified regulator for international finance operations.

By leveraging regulatory agility, infrastructure readiness, and policy backing, GIFT City has become a magnet for global fintech players, digital banks, and crypto-related service providers looking for a compliant environment to test and scale.

Proposed Benefits of Regional Fintech Zones

According to the committee’s report, regional fintech clusters will:

• Enable state-led fintech innovation tailored to local economic needs

• Ease pressure on central regulators by creating cooperative policy environments

• Promote job creation and entrepreneurship beyond metro cities

• Encourage collaboration between local governments, private players, and academia

• Build resilient digital infrastructure for financial services in Tier 2 and Tier 3 cities

The panel has emphasized that states should be empowered and incentivized to create these fintech hubs, potentially with special economic zone (SEZ) status or sandbox mechanisms similar to GIFT City’s.

Role of Regulators and Government Support

The success of this model hinges on collaborative governance between the Reserve Bank of India (RBI), SEBI, IRDAI, and state-level fintech task forces. The report encourages central authorities to provide a regulatory roadmap and standard operating frameworks to guide the states.

“A layered regulatory architecture will help balance innovation with safety, ensuring responsible fintech growth nationwide,” the report notes.

Furthermore, the government may look into providing seed funding, infrastructure support, and tax breaks for startups setting up in these new regional hubs.

 Global Inspiration

India isn’t alone in this strategy. For instance, countries like Singapore—with its fintech regulatory sandbox—the UK—with regional hubs in London, Edinburgh, and Manchester—and the UAE’s DIFC have already adopted geographically distributed fintech ecosystems.

Consequently, with its large, young, and tech-savvy population, India’s move to regionalize fintech infrastructure could, in turn, offer a globally scalable model of inclusive and competitive financial innovation.

 What’s Next?

If the government adopts the recommendation, the Finance Ministry and NITI Aayog could lead the initiative to coordinate with state governments. Pilot programs may be announced in fintech-friendly states such as Maharashtra, Karnataka, Tamil Nadu, and Telangana.

The committee has also urged the creation of a Fintech Innovation Index to rank states on ecosystem readiness, digital penetration, regulatory ease, and startup activity—helping identify high-potential zones for future fintech clusters.

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