Freeports, announced in Sunak’s budget in March, are a cornerstone in the Government’s levelling up agenda – with claims they can boost investment, infrastructure, and jobs in specific and targeted geographic areas. This incentive is fuelled by slashing taxes and fees on any business or production done there. Although they have been a controversial subject, their use throughout Asia is a vision of success to emulate, particularly India’s Gujarat International Finance Tec-City (GIFT City).

Although Britain’s freeports are set to look different from this entire city built just to support the FinTech sector, there is much to be learned from GIFT City. This special economic zone (SEZ), a ‘smart city’ built entirely from the ground up as a trading and services hub for India’s growing FinTech sector, employs over 3 million people, constitutes about 5% of the GDP and has an estimated market capitalisation of over $200 billion.

The government’s challenge in levelling-up Britain’s economy has been highlighted by official data showing London accounted for almost half of foreign direct investment (FDI) into the UK in 2019. The ONS said London’s FDI was more than three times that of the second highest region – the south-east. Between them, London and the south-east accounted for 55% of FDI in 2019 according to the ONS figures.

Like the GIFT City, freeports, by using similar methods of localised incentives and support infrastructure, are designed to be a method of attracting investment and jobs to areas in need, therefore aiming to help levelling-up, and rebalancing the economic map away from London.

Gaurav Singh, founder of JPIN VCATS, comments on the use of freeports in the UK:

“Perhaps most famously, China’s use of Free Ports, or Special Economic Zones, slowly introduced trade liberalisation and therefore foreign investment, to China. India is doing the same – cutting regulation in specific areas to supercharge growth and development, bringing jobs, infrastructure, and the best and brightest to those areas and thus India as a whole.

Although Britain, as a fully emerged economy, will see freeports used in a different context – ultimately, they will be for the same purpose, and have the same outcome. Britain will see a larger amount of business being done in these areas. This has significant potential to help ‘level-up’ areas previously lacking in investment and infrastructure.”