GIFT City: India's International Financial Services Hub Explained

Gujarat International Finance Tec-City (GIFT City) is located between Ahmedabad and Gandhinagar. It is India's first operational International Financial Services Centre (IFSC). The IFSC is the key component within GIFT City where financial institutions operate in foreign currencies and participate in global markets under a dedicated regulatory structure.

The rationale was straightforward: large volumes of cross-border financial activity involving India were being routed through Singapore, Dubai, and Mauritius because there was no comparable regulated centre within India. GIFT City was designed to bring that activity onshore, under Indian law, but with an internationally aligned framework.

The IFSC framework

The IFSC enables banking, insurance, capital markets, and fund management in foreign currencies. Exchanges such as India INX and NSE IFSC operate for extended hours, allowing alignment with global market timings that domestic Indian exchanges do not cover.

Special Economic Zone status

GIFT City is designated as a Special Economic Zone (SEZ). This creates a distinct regulatory and tax structure compared to the domestic market. IFSC entities are eligible for certain tax incentives, including a time-bound income tax exemption window. These benefits are subject to applicable conditions and may change.

Single regulator: IFSCA

The International Financial Services Centres Authority (IFSCA) is the unified regulator for all IFSC activities, covering banking, capital markets, and insurance. This differs from the domestic market, where SEBI, RBI, and IRDAI regulate different segments separately.

GIFT City supports investment flows in both directions, which is what distinguishes it from a purely domestic financial centre.

Outbound: Indian investors accessing global markets

Indian residents can invest internationally through IFSC-registered structures under the Liberalised Remittance Scheme (LRS). LRS sets an annual limit on outward remittances per individual. Investments made under LRS are subject to applicable tax rules, including Tax Collected at Source (TCS) on remittances above specified thresholds. Investors should verify current LRS limits and TCS provisions before investing.

Inbound: Global investors accessing India

Foreign and NRI investors can access India-focused strategies managed through GIFT City. These structures provide a globally aligned entry point into Indian equity and debt markets without navigating the full domestic regulatory onboarding process.

GIFT City's strategic advantage is direct access to India's markets within a regulated onshore framework. The limitation is track record: as a relatively young centre, it is still building the depth of liquidity and institutional participation that established centres have accumulated over decades.

GIFT City is outside Indian regulation

GIFT City operates entirely within India and is governed by Indian law. The IFSCA is an Indian statutory authority. The difference is the type of regulatory framework applied, which is internationally aligned, not that it is beyond Indian jurisdiction.

Only foreign investors can use GIFT City

Indian residents can invest through IFSC structures under LRS. Global investors and NRIs can access India-focused strategies through the same platform. Both directions are available within the regulatory framework.

DSP Investment Managers operates an IFSC platform at GIFT City that provides access to both outbound (global) and inbound (India-focused) investment strategies. These include equity and fixed income structures across different geographies and investment approaches within the IFSC regulatory framework.

Details of available strategies, minimum investment requirements, and applicable terms are on the DSP GIFT City platform.