Hello, this is Priyanka Salve, writing to you from Singapore.
Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest-growing large economy.
India’s Gujarat International Finance Tec-City, also known as GIFT City, aspires to be what Hong Kong is to mainland China, or what Dubai International Financial Center is to the United Arab Emirates. While progress has been slow, after more than a decade of its launch, GIFT City is finally drawing interest from leading asset management firms.
I spoke with experts to figure out if India’s first and only global financial center is finally coming into its own.
Any thoughts on today’s newsletter? Share them with the team.
The big story
Signage in Gujarat International Finance Tec-City (GIFT City) in the suburbs of Ahmedabad, Gujarat, India, on Wednesday, May 21, 2025.
Bloomberg | Bloomberg | Getty Images
A strong domestic investor appetite for global markets, relaxed rules for foreign currency usage, and increasing tax sops are driving leading asset management companies to India’s GIFT City, more than a decade after its launch.
GIFT City, located in Prime Minister Narendra Modi’s home state of Gujarat, is emerging as an important gateway for international investors looking to access India’s growth opportunity, as well as resident Indians seeking international wealth solutions, experts said.
Earlier this year, the government improved tax structures to put GIFT City on par with global financial centers such as Singapore, said Rajesh Gandhi, Partner at Deloitte India.
While these tax benefits are driving inbound investment, the government has also loosened capital controls on outbound investments made via the City, Gandhi said, adding that his firm was seeing an increase in outbound and inbound funds being set up in India’s first global financial center.
Global fund houses are waking up to the pent-up demand from Indian investors for overseas markets such as the U.S., and GIFT City offers the most convenient route, according to experts.
Global interest
Last week, Standard Chartered announced plans to launch its Signature CIO funds from GIFT City.
Samir Subberwal, global head of wealth solutions, retail products, data and analytics at Standard Chartered, told CNBC that the company will launch the funds “in the coming weeks” and plans to expand its suite of wealth solutions over time.
The British international banking group was among the first foreign banks to start operating out of GIFT City in 2020. And with the launch of Signature CIO funds, it plans to expand its wealth management business in what Subberwal describes as “one of the world’s fastest-growing international financial centres.”
Government data shows that fund management entities in the city increased to 217 in May this year from 194 in November last year.
Another major global asset manager, BlackRock, through its joint venture with Indian billionaire Mukesh Ambani’s Jio Financial Services, is looking to launch global ETFs out of GIFT City.
Jio BlackRock Asset Management, the joint venture company, secured regulatory approval to launch funds out of GIFT City in May.
It is preparing to start two outbound funds from the financial center before the end of September, one global equity fund and another emerging markets fund, Rishi Kohli, the firm’s chief investment officer, told Moneycontrol — a news outlet part of Network18, which is owned by Ambani’s Reliance Industries.
Due to strong capital controls, there are limits on the funds that asset managers in India can deploy in overseas markets, experts said, pointing to the aggregate $7 billion ceiling on outbound investments, which has already been exhausted.
As a result, despite Indian markets underperforming their global peers by a wide margin, equity funds in India logged positive inflows for the 65th consecutive month, according to data from India’s mutual fund industry body AMFI.
But funds operating from GIFT City can change that as the outbound investment limits do not apply to them, allowing these funds to tap the growing pool of Indian investors.
Long road ahead
But despite these tailwinds, experts said that GIFT City has a long way to go before it can compete with global financial centers such as Singapore, Delaware in the U.S., and Dubai International Financial Center in the United Arab Emirates.
From a regulatory aspect, GIFT City is on par with other global financial centers, but it needs to shed its image as an India-specific center and emerge as a destination for global capital. It also needs to match the lifestyle benefits that come with living in cities such as Dubai and Singapore.
Some argue that it just needs “more time” to develop. DIFC took 20 years to become the powerhouse it is today, said Vivek Singhania, co-founder of Mumbai-based fund administration service provider Dovetail Capital. He told CNBC that regulatory structures at the GIFT City were formed around 2020, and now things are gradually coming together.
Singhania said his firm is in discussions with a several U.S. and Singapore-based funds as well as Indian funds that are keen to set up operations in city.
Among those bullish on GIFT City is also Vikas Satija, managing director and chief executive at Shriram Wealth. His firm scouts for funds operating out of GIFT City for their “high-net-worth clients” in India and outside.
He predicts that by 2030, GIFT City will become a key global financial center and adds that the arrival of one of the largest global fund houses, BlackRock, is a “big sign.”
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