Hello, this is Priyanka Salve writing from Singapore.
Welcome to the latest edition of Inside India. A one-stop-shop for stories and developments in the world’s fastest growing large economy.
India’s Gujarat International Financial Tech City, also known as GIFT City, aims to be what Hong Kong is to mainland China or what Dubai International Financial Center is to the United Arab Emirates. More than a decade after its inception, GIFT City is finally attracting interest from major asset management companies, although progress has been slow.
I spoke to experts to find out whether India’s first and only global financial center is finally coming into its own.
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big story
A signboard at Gujarat International Finance Tech City (GIFT City) on the outskirts of Ahmedabad, Gujarat, India, on Wednesday, May 21, 2025.
Bloomberg | Bloomberg | Getty Images
More than a decade after its launch, major asset management companies are flocking to India’s GIFT City, driven by strong domestic investor appetite for global markets, relaxed regulations on the use of foreign currency, and increased taxes.
Experts say GIFT City, located in Prime Minister Narendra Modi’s home state of Gujarat, has emerged as a key gateway for international investors seeking access to India’s growth opportunities and resident Indians seeking international wealth solutions.
Rajesh Gandhi, partner at Deloitte India, said the government earlier this year had improved the tax system to put GIFT City on par with global financial centers such as Singapore.
While these tax incentives are encouraging inbound investments, the government has also relaxed capital controls for outbound investments made through the city, Gandhi said, adding that his firm is seeing an increase in outbound and inbound funds being set up in India’s first global financial center.
Experts say global fund houses have woken up to pent-up demand from Indian investors into overseas markets such as the US, and GIFT City offers the most convenient route.
worldwide interest
Last week, Standard Chartered announced plans to launch a Signature CIO fund from Gift City.
Sameer Sabharwal, Standard Chartered’s global head of wealth solutions, retail products, data and analytics, told CNBC that the company plans to launch the fund “in the coming weeks” and expand its wealth solutions suite over time.
British International Banking Group was one of the first foreign banks to start operations in GIFT City in 2020. It also plans to expand its wealth management business in a region that Subbarwal describes as “one of the fastest growing international financial centers in the world” with the launch of the Signature CIO Fund.
According to government data, the number of fund management organizations in the city increased from 194 in November last year to 217 in May this year.
BlackRock, another major global asset manager, is launching a global ETF from Gift City through a joint venture with Indian billionaire Mukesh Ambani’s Geo Financial Services.
The joint venture, Jio BlackRock Asset Management, won regulatory approval to launch the fund from GIFT City in May.
Rishi Kohli, the company’s chief investment officer, told Moneycontrol, a news outlet part of Network 18, owned by Mr. Ambani’s Reliance Industries, that the company is preparing to launch two outbound funds from the financial center by the end of September, one a global equity fund and one an emerging markets fund.
Experts said strong capital controls limit the amount of money Indian asset managers can deploy in overseas markets, with a cap on total foreign investment of $7 billion that has already been exhausted.
As a result, Indian equity funds have recorded positive inflows for 65 consecutive months, even though the Indian market has significantly underperformed global markets, according to data from India’s mutual fund industry body AMFI.
However, this situation may change as funds operating in GIFT City are not subject to foreign investment restrictions, allowing these funds to tap into India’s growing investor base.
There’s a long way to go
But experts said despite the tailwinds, GIFT City has a long way to go before it can compete with global financial centers such as Singapore, Delaware in the US and Dubai International Financial Center in the United Arab Emirates.
From a regulatory perspective, GIFT City is on par with other global financial centers, but it needs to shed its image as a uniquely Indian center and emerge as a destination for global capital. It also needs to match the lifestyle benefits you get from living in a city like Dubai or Singapore.
Some argue that development simply “takes more time.” Vivek Singhania, co-founder of Mumbai-based fund management services provider Dovetail Capital, said it took 20 years for DIFC to become the powerhouse it is today. He told CNBC that the regulatory regime for Gift City was formed around 2020 and is now being gradually put in place.
Singhania said his company is in talks with several US- and Singapore-based funds as well as Indian funds keen to set up operations in the city.
Among those taking a bullish view on GIFT City is Vikas Sathya, managing director and chief executive officer of Shriram Wealth. His firm scouts funds operating out of GIFT City for “high-net-worth clients” in India and abroad.
He predicted that GIFT City would become a major global financial center by 2030, adding that the arrival of BlackRock, one of the largest global fund houses, was a “huge sign”.
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