GIFT City: Why AMCs Are Scrambling to Establish Operations There?

India’s GIFT City (Gujarat International Finance Tec-City), located between Gandhinagar & Ahmedabad, is a cornerstone of India’s pioneering International Financial Services Centre (IFSC) and its first operational Greenfield smart city. The GIFT City idea was first pioneered by the Gujarat State Government in 2007-08 under the then Chief Minister Narendra Modi, the present Prime Minister of India. The foundation stone of the GIFT City was laid on January 28, 2011, jointly by the then Gujarat CM Modi and Union Finance Minister Pranab Mukherjee.

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GIFT City is primarily a special economic zone (SEZ) focused on financial services for both global & local:

• Asset management and investment hubs
• Banking
• Insurance & reinsurance
• Aircraft and ship leasing
• Fintech
• Global trading exchanges

The GIFT City SEZ for financial services is regulated by the International Financial Services Centres Authority (IFSCA), which has its own unified regulatory framework separate from the normal Indian multiple financial regulations.

In 2015, the Indian Government, under PM Modi, formally established the GIFT City (Gujarat International Finance Tec-City) via gazette notification for the IFSC status and as an enabler in positioning the country as a global financial hub ─ India’s answer to Singapore or Dubai international exchanges. Eventually, on January 9, 2017, PM Modi inaugurated India’s first international stock exchange (INDIA INX), a BSE subsidiary.

Subsequently, in 2017, India’s number one stock exchange, NSE (National Stock Exchange of India Limited), established NSE IX (NSE International Exchange) ─ formerly known as NSE IFSC.  GIFT City international exchanges are regulated by the IFSCA (International Financial Services Centres Authority). The transaction currency is primarily USD for both global & local investors/traders. Local (Indian) investors can invest in USD under the RBI’s LRS (Liberalised Remittance Scheme) up to $250,000 per FY.

India’s GIFT City now has three exchanges serving both local & global investors:

• India INX (India International Exchange): A wholly owned subsidiary of BSE (Bombay Stock Exchange). It was established in 2017 and deals in multi-assets ─ Equity Index F&O, Single Stock F&O, FX Derivatives, Commodity Derivatives (including precious metals, base metals and energy), debt securities (local & global bonds), and equity & Depository receipts listings.
• NSE-IX (NSE International Exchange): Established in 2017 by India’s number one stock exchange, NSE. It was formerly known as NSE IFSC. It’s also another multi-asset international exchange for both global & local investors/traders, offering mainly Indian large-cap stocks & indices (F&O only) and US stocks & indices. 
• IIBX (India International Bullion Exchange): India’s answer to Dubai Commodity Exchanges or even COMEX; established in 2022 by a consortium led by NSE, BSE, MCX, and also NSDL & CDSL ─ focuses exclusively on bullion/precious metals (Gold & Silver).

In India, GIFT City international exchanges, such as NSE IX, India INX, and IIBX, were established to bring back offshore trading through legal or illegal Foreign Trading platforms (FTPs). NSE IX was also incorporated to compete with SGX (Singapore) and the Dubai Exchanges amid the growing popularity of the 16/5 SGX Nifty Future. Now, GIFT Nifty Future has replaced SGX Nifty Future, especially in the overnight US session and the morning Asian Session (pre-NSE).

Why did India create GIFT City?

For decades, Indian financial services activity often happened outside Indian jurisdiction, costing India any revenue and also oversight:

• India-focused funds domiciled in Singapore or Mauritius for tax incentives
• Aircraft leasing activities in Dublin
• Offshore derivatives are often traded in Singapore (SGX)

The GIFT City was created to bring this offshore financial activity back to India while still offering global-style regulations. The cost of trading (transactions) is globally competitive in GIFT City, where international exchanges (IXs) operate as offshore-style exchanges within India's regulatory framework. Designed to rival established international financial hubs such as Singapore, Dubai, Hong Kong, and London, GIFT City functions as an onshore "deemed foreign jurisdiction" within India. This unique status enables financial institutions to conduct cross-border activities in foreign currencies (primarily USD, EUR, and GBP) under the RBI’s liberalised regulations, with tax efficiencies and minimal domestic regulatory friction.

Unlike domestic exchanges, these IXs cater to both local & global participants, including foreign investors seeking exposure to Indian indices and equities in direct USD/EUR – thereby reducing currency hedging risk. These IXs were primarily conceived as a strategic initiative to position India as a global financial powerhouse. GIFT City bridges domestic and international markets by offering world-class infrastructure, progressive regulation, and significant trading incentives.

The IFSC zone within GIFT City operates under a liberalised regulatory regime governed by the International Financial Services Centres Authority (IFSCA). This unified (common) regulator oversees banking, capital markets, insurance, fund management, and fintech ─ in line with established global hubs such as Singapore, Dubai, and Hong Kong. Over the last few years, India’s GIFT City has witnessed a surge in the fund management sector led by diversification of assets ─ both local & global ─ and reasonable transaction/operating costs. Many AMCs (Asset Management Companies) ─ both local & global ─ are now flocking to GIFT City and are increasingly establishing offices & operations or launching relevant products ─ serving both institutional & retail clients. As of early 2026, GIFT City hosts hundreds of registered AMCs, with billions in commitments. The scramble reflects GIFT City’s transformation from an ambitious vision into a globally competitive AMC hub for both local & global asset management, including ongoing expansions in fintech, insurance, and fund management.

Overview of GIFT City and Its IFSC Framework

GIFT is India’s 1st operational Smart City ─ planned in an urban area near Gandhi Nagar, Gujarat, and especially designed for banks & financials and fintechs. GIFT City has all the modern facilities available in global fintech hubs such as Singapore, Dubai, and Hong Kong. The Gift City has ready-to-move plug & play offices with hi-tech utilities, high-speed broadband connectivity, and amenities like residential towers, hotels, swimming pools, movie screens, and business clubs, smart residential and commercial hubs. It is divided into the Domestic Tariff Area (DTA), subject to standard Indian laws, and the IFSC/SEZ zone, which enjoys special privileges. The IFSC focuses on international financial services, including global asset management, investment funds, international banking, insurance and reinsurance, aircraft and ship leasing, fintech innovations, and global trading exchanges.

GIFT City IFSC's regulatory & operational advantages

• Unified Regulator & Regulation: The IFSCA provides a single-window, globally aligned framework, enabling faster approvals and innovative products compared to fragmented domestic regulatory oversight.
• Multi-Currency Operations: Transactions in USD, EUR, and other global currencies, with seamless repatriation and no mandatory rupee conversion for many activities.
• Extended Operating Hours: The India INX exchanges offer nearly 22-hour trading, aligning with global markets.
• Infrastructure Edge: State-of-the-art facilities reduce setup costs and enhance efficiency.
• Exemptions from many domestic restrictions under FEMA for IFSC units.

​​​​​​​The Global Access Platform: A Game-Changer for Indian Investors

Launched in late February 2026, the Global Access platform (GAP) may be one of India’s most significant outbound investment initiatives. It allows resident Indian investors and NRIs to invest directly in international stocks and ETFs without needing a foreign broking account. Phase 1 focuses on the US market, providing access to over 50 large-cap blue-chip stocks, including Apple, Microsoft, Amazon, Tesla, and NVIDIA, as well as ETFs. The GAP is expected to expand further to over 30 global markets, including the U.K., Japan, and Europe, by 2026. The soft launch saw strong adoption, with approximately 2,000 clients enrolling on day one. This positions GIFT City IX as a regulated, cost-effective gateway for portfolio diversification, reducing reliance on informal channels or foreign brokers.

Fund management has become a pivotal segment under the IFSCA (Fund Management) Regulations, 2025 (with amendments in 2026). FMEs are registered in categories such as Authorised (e.g., family offices), Registered Non-Retail (e.g., AIFs and sophisticated schemes), and Registered Retail (e.g., mutual funds for broader investors). Recent updates allow greater flexibility in hiring, fundraising extensions (in six-month tranches), and third-party fund management services up to USD 50 million.

The International Financial Services Centres Authority (IFSCA), established in 2020, serves as the unified regulator, consolidating oversight previously fragmented across RBI, SEBI, IRDAI, and PFRDA. This single-window approach, combined with world-class infrastructure & trading facilities, has transformed GIFT City into a compelling alternative for global financial operations. For the last few years, AMCs have flocked to GIFT City to establish operations amid ongoing policy reforms and fiscal stimulus - including tax incentives.

GIFT City IFSC Growth is both Monumental & incremental.

• The number of FMEs increased from around 63 in 2023 to 202 by early 2026
• Over 310 schemes operate across categories, with retail products gaining traction through low minimum investments (only $500 in some cases) and USD/FX-denominated structures.

Major Indian AMCs have already set up offices in the GIFT City

• ICICI Prudential, Edelweiss, Nippon India, DSP, Sundaram, Tata, and Bandhan
• Have launched funds such as India equity, mid-cap, global equity feeders, and AIFs. 
• India equity funds (large & midcaps)
• India debt funds
• AIFs
• Global feeder funds

Easier access to global investors ─ From GIFT City, AMCs can launch USD-denominated funds for:

• Foreign institutions
• NRIs
• Global family offices
• Sovereign wealth funds

This allows global investors to invest in India without the need for complicated Indian tax compliance or opening a bank account.

Global interest is also growing, supported by tax-neutral relocations effective from April 2026, which enable seamless shifts from offshore jurisdictions such as Mauritius or Singapore without triggering capital gains tax.

GIFT City competes with Singapore/Mauritius structures

• Earlier, most Indian funds were structured like this: Investor → Singapore/Mauritius fund → India stocks.
• Now it can be: Investor → GIFT City fund → India stocks
• This keeps fees, jobs, and financial activity in India.

Why Asset Management Companies Are Rushing to GIFT City

The surge in AMC activity stems from a potent combination of fiscal, regulatory, operational, and strategic factors that position GIFT City as a superior onshore alternative to traditional offshore centres. Tax benefits form the cornerstone of appeal.

GIFT City IFSC Offers Substantial Tax Incentives for qualifying non-residents and structures (like u/s 10(4D))

• NIL (0%) capital gains tax at the fund level
• No Securities or Commodities Transaction Tax (STT/CTT) and stamp duty on trades executed 
• No GST on financial services
• No TDS for foreign investors
• Investors are taxed only in their home country
• The tax holiday is extended to 20 consecutive years out of 25, with 15% post-holiday. The Union Budget 2026 doubled it from 10/15 years to 20/25 years, with a 15% concessional rate thereafter.

IFSC units previously enjoyed a 100% income tax exemption for 10 consecutive years within 15 years, alongside reduced Minimum Alternate Tax (MAT), no GST on management fees, exemptions from STT/CTT/stamp duty on IFSC exchange trades, and capital gains relief for non-residents on specified securities. The Budget 2026 extension to 20 consecutive years out of 25, with a 15% post-holiday tax, significantly enhances the viability of long-duration funds and operations. Tax-neutral relocations from April 2026 further eliminate barriers to onshoring, mirroring structures in Singapore or Luxembourg while retaining activity in India.

Unified and Agile Regulation ─ Faster Regulatory Approvals

GIFT IFSC offers:

• Single & common regulator ─ IFSCA, consolidating power in mainland India, usually held by SEBI, RBI, IRDAI, and PFRDA
• Faster approvals ─ Simplified registrations and compliance frameworks allow for quicker fund setups with an innovative product & service structure compared to mainland India.
• Global regulatory standards
• Easier onboarding of investors
• Enhanced deregulation and smart regulations

The IFSCA's single-window regulator model streamlines approvals, product launches, and compliance compared to the mainland's fragmentation. Faster registrations, innovative structures (e.g., retail mutual funds, global feeders), and recent amendments (e.g., scheme extensions, third-party services) reduce regulatory constraints and enhance rapid market response.

AMC’s Global Access and Currency Flexibility

• AMCs can launch USD. FX-denominated funds targeting foreign institutions, NRIs, family offices, and sovereign wealth funds, offering natural hedging against INR volatility and simplified compliance. 
• This facilitates inbound foreign capital into Indian assets (equity, debt, mid-caps) and outbound global investments under LRS limits. 
• Products include India-focused strategies, AIFs, and feeders, bypassing mainland complexities in taxation, banking, and repatriation.

Liberal foreign exchange rules & flexibilities

• Operate in USD, EUR, GBP
• Raise funds abroad
• Trade global financial assets
• Move money freely globally across various jurisdictions
• Banks there can take foreign currency deposits and loans

This is not easily possible in mainland India due to FEMA restrictions.

Operational Cost Efficiency

Overall, setup and operating costs—office rentals, talent (HR), and infrastructure—are substantially lower than in Singapore or Dubai, yet regulatory standards match or exceed global benchmarks. Combined with 22-hour operations and plug-and-play facilities, this delivers cost advantages without compromising quality.

Strategic and Market Momentum

GIFT City repatriates offshore activity (previously routed through Mauritius/Singapore) while creating jobs, retaining fees, and boosting India's strategic financial sovereignty. The ecosystem's virtuous cycle—more FMEs attract more investors and liquidity—has driven rapid scaling, with projections for continued exponential growth amid India's economic rise.

Strategic vision: India’s ‘Singapore’ or ‘Hong Kong’ (Mainland ─ India)

The Indian government wants GIFT City to become:

• India’s global finance hub is like Singapore or Hong Kong to mainland China
• Gateway for foreign capital into India (financial market
• Hub for offshore derivatives trading
• Base for global fund management

The Indian government is now trying to make GIFT City (IFSC) a global financial hub (capital) for India or South Asia, like Singapore for Asia, Hong Kong for mainland China (Asia), Dubai DIFC for the Middle East, or London for Europe and New York (NY) for America & the entire world.

In brief, AMCs are rushing to GIFT City because it offers:

• Huge tax incentives & lower operating costs than foreign peers
• Global quality infrastructure at an affordable/competitive cost compared to global peers
• Access to global investors & markets
• USD-denominated funds
• Easier unified regulator
• Ability to run offshore-style structures from India
• Ease of doing business, ensuring deregulations and proper smart regulations
• AMCs can manage funds in USD, EUR, GBP and other major foreign currencies, providing a natural hedge against INR depreciations for global investors.
• It serves as both an inward & outward gateway of funds; FIIs can invest through this route, while Indian capital may also be invested overseas via the RBI LRS scheme.

Conclusions

AMCs are scrambling to GIFT City due to its tax-neutral environment, minimal regulatory constraints, and its strategic role as the gateway to global capital. For both local & global investors, it provides diversified, tax-optimised exposure to domestic & international opportunities. For AMCs, it offers a strategic platform to capture diaspora and foreign inflows. Sustained momentum could elevate GIFT City to a top-tier global financial centre, reinforcing India's position in the global capital market and fostering innovation in the asset management ecosystem.