GIFT IFSC: A hub for global fund managers

In the heart of India, a financial revolution is quietly unfolding at the Gujarat International Finance Tec-City (GIFT IFSC), establishing itself as a bustling hub for global fund managers. Over the past few years, GIFT IFSC has emerged as a preferred destination for financial institutions, asset managers, and investors seeking an attractive, stable, and globally connected environment for their operations.
Amid a relative slowdown in developed markets,the Indian economy is on a firm footing for establishing itself as a global growth engine, attracting investors with its positive growth story.India's allure as an emerging market has led to a surge in foreign portfolio investment (FPI),with more than $10 billion flowing into the equity markets in the last three months alone, while net FPI investments are at $19.09 billion during the current calendar year.Given the positive sentiments India's appeal as an investment destination is evident making it a prime focus for foreign funds seeking significant opportunities in a vibrant and sustainable market ecosystem.
Analysing the FDI Flow 
India’s thriving economy has also attracted $46 billion in FDI during FY2023, registering a remarkable growth of 89% since FY2014. This warrants scrutiny of the jurisdictions contributing to this inflow. Notably, Singapore emerged as the leading source of FDI to India, contributing 37% ($17.2 billion) of the basket. The small island nation of Mauritius had a 13.32% share followed by the US at 13.13%.Remarkably, Mauritius outperformed several developed economies in its contribution to India's FDI. Smaller economies like Singapore and Mauritius played a vital role in bolstering India's FDI inflows, owing to their world class International Financial Service Centres (IFSCs) that attract offshore fund managers seeking cost -effective bases.
GIFT City: India's Innovative Offshore Base
To foster an offshore location for funds within its borders the GIFT City, was conceived as a futuristic urban center designed to compete with the world's leading international financial hubs. Its inception in 2007 was driven by a vision to provide India with a world-class financial district that would offer both domestic and international financial services under a single regulatory framework. Situated between Ahmedabad and Gandhinagar, the unified regulator boasts numerous distinctions including being India's first functional Smart city with cutting edge infrastructural facilities like District cooling system (DCS), Automated waste collection system (AWCS),and Underground Utility Tunnel.Recognised among the top 15 centres expected to gain global significance in the next couple of years,GIFT City has become an ideal location for offshore funds seeking entry into a dynamic and vibrant emerging market ecosystem poised for sustainable growth.
With focus on elevating India's stature in the global finance and technology GIFT City offers enticing incentives including,100% income tax exemption for 10 out of 15 years alongside a 9% minimum alternate tax on book profits.Additionally, interest income paid to non- residents on money lent to IFSC units is not taxable, making GIFT City significantly attractive to investors.Further GIFT City offers no GST on services received by units in IFSC, making it a preferred offshore location for global funds seeking both cost- effectiveness and dynamism.Besides SEZ(Special economic zone) various relaxations for fund management entities and Alternative Investment Funds(AIFs), according to information.
With a hospitable environment GIFT City has become home for multiple funds supported by leading BFSI entities including Aditya Birla Sun Life (AMC), Kotak Investment Advisors, Mirae Asset Investment Managers(India), Nuvama Asset Management and SBI Fund Management, according to information.
GIFT City represents India's ambitious vision to establish a world-class financial and technological hub within the country, offering a competitive and attractive ecosystem for businesses, investors, and financial institutions. Its success will likely contribute significantly to India's role in the global financial arena.

(Ira Singh, Asstt Editor)