Mumbai is planning to launch its own international financial services centre, which would put it in competition with Gujarat International Finance Tec-City, or Gift.
The question is whether India can support more than one global finance hub.
Establishing an international financial services centre in India involves setting up a special economic zone with its own regulations, including for foreign currency transactions, because there are restrictions on flows of rupees in and out of the country.
“Mumbai is not only the financial capital of India but we hope that in the years to come, it will play a major role as an international financial services centre,” says Devendra Fadnavis, the chief minister of Maharashtra, the state of which Mumbai is the capital city.
“I think we are late by 20 years. Twenty years back we should have started the activity of developing Mumbai as an international financial services centre,” he said, according to the Press Trust of India news agency.
He said the international financial services centre would be in the Bandra Kurla Complex (BKC), which is Mumbai’s modern new business district and is already home to a number of foreign banks. He said a master planner has been appointed for the project.
But doubts have been raised over the viability of a second centre following the establishment of a global finance hub in Gujarat near Ahmedabad.
India's department of commerce has asked the department of economic affairs to look at whether a second international financial services centre is feasible in the country, The Hindu newspaper reported.
The department has also requested that it will look at the plans for Mumbai, raising the point that many developed countries find it difficult to set up more than one global finance centre. Mr Fadnavis has in the past suggested that collaborating with Gift could be an option.
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