{"id":985,"date":"2025-05-22T10:13:07","date_gmt":"2025-05-22T10:13:07","guid":{"rendered":"https:\/\/iqeq.com\/in\/?p=985"},"modified":"2025-05-29T07:05:37","modified_gmt":"2025-05-29T07:05:37","slug":"the-emerging-landscape-of-gift-ifsc-a-conversation-with-nehal-sampat-partner-price-waterhouse-co-llp","status":"publish","type":"post","link":"https:\/\/iqeq.com\/in\/insights\/the-emerging-landscape-of-gift-ifsc-a-conversation-with-nehal-sampat-partner-price-waterhouse-co-llp\/","title":{"rendered":"The emerging landscape of GIFT IFSC: A conversation with Nehal Sampat, Partner, Price Waterhouse & Co LLP\u00a0"},"content":{"rendered":"
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In recent years, India\u2019s financial landscape has experienced a significant transformation towards innovative investment avenues driven by a combination of changing investor preferences and emergence of new financial instruments. Among such avenues, alternative investment funds (AIFs) have garnered significant traction, especially in India\u2019s first International Financial Services Centre (IFSC) within Gujarat International Finance Tec-City (GIFT City). GIFT IFSC represents a strategic vision to position India as a global financial hub, particularly in the realm of fund management.<\/span>\u00a0<\/span><\/p>\n

In this conversation between IQ-EQ\u2019s Khushboo Chopra and Price Waterhouse & Co LLP\u2019s Nehal Sampat, we delve into the evolution of fund management in GIFT IFSC, exploring the opportunities it presents for fund managers and investors both domestically and internationally.<\/span>\u00a0<\/span><\/p>\n

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Khushboo Chopra (KC):\u202fNehal, thank you so much for joining me to discuss the evolving landscape of India’s maiden IFSC. For anyone who isn\u2019t familiar with it, could you start by providing a quick overview of GIFT IFSC and its relevance in the Indian market?<\/span><\/b>\u00a0<\/span><\/p>\n

Nehal Sampat (NS):<\/span><\/b>\u202fThank you for having me, Khushboo. The genesis of GIFT IFSC lies in the Government\u2019s \u201conshoring the offshore\u201d initiative. Traditionally, India has been an importer of financial services and there are many \u201cIndia focused\u201d financial services, which have been rendered from offshore financial centres. GIFT IFSC was conceptualised with an objective of encouraging such financial services to be rendered from India, and to build a robust ecosystem for international finance and financial services within India’s borders. I may add that entities in the IFSC are regarded as non-resident from an exchange control regulations perspective, making it akin to setting up entities outside India.<\/span>\u00a0<\/span><\/p>\n

GIFT IFSC currently ranks 46<\/span>th<\/span> in the Global Financial Centres Index and is among the top 15 financial centres deemed likely to gain prominence in the coming years. This validates the Government\u2019s initiative to develop GIFT IFSC into a world-class financial hub.\u00a0<\/span>\u00a0<\/span><\/p>\n

In fact, the vision of the Government and the International Financial Services Centres Authority (IFSCA) has broadened into GIFT IFSC actively contributing to the aspiration of Viksit Bharat 2047 (which aims for India to become a developed nation by 2047). This would be by way of positioning India as a leading global financial hub, attracting global investments and enhancing the nation’s presence in global markets.<\/span> \u00a0<\/span><\/p>\n

KC: I do see many asset managers and funds being set up in GIFT IFSC. What kind of asset managers are establishing themselves in the IFSC and which types of fund are gaining more traction?<\/span><\/b>\u00a0<\/span><\/p>\n

NS:<\/span><\/b> Your observation is spot on. As of 31 December 2024, 750+ entities were registered with IFSCA, of which almost half are from the asset management space (being fund managers and funds). To give you a sense of scale, 200+ funds have been registered with IFSCA, which have raised over US$15 billion in commitments. These commitments have been raised by different types of asset managers across different types of investment strategies \/ asset classes.<\/span>\u00a0<\/span><\/p>\n

If I may touch upon the regulatory framework before responding to your questions, IFSCA introduced the Fund Management (FM) Regulations in May 2022 and updated them very recently. The FM Regulations were formulated after considering international best practices and adopting a risk-based approach. They seek to regulate different types of fund manager (and through them, funds) in a single, comprehensive framework.<\/span>\u00a0<\/span><\/p>\n

The FM Regulations classify fund management entities (FMEs) into three distinct categories based on the activities they intend to undertake, as tabulated below:<\/span>\u00a0<\/span><\/p>\n

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Currently, most FMEs are registered as \u201cnon-retail FMEs\u201d and the majority of the funds set up in GIFT IFSC are \u201crestricted schemes\u201d, especially Category III AIFs. Recently, there has been a surge in \u201coutbound funds\u201d raising funds from resident Indians for overseas investments and even retail schemes are getting launched now.<\/span>\u00a0<\/span><\/p>\n

KC: What are the key drivers fueling this growth of funds and fund management entities in the IFSC?<\/span><\/b>\u00a0<\/span><\/p>\n

NS:<\/span><\/b> That’s a great question! GIFT IFSC offers a blend of regulatory, operational and tax advantages, making it an attractive destination for funds and fund managers. Let\u2019s explore the primary drivers that make the IFSC stand out:\u00a0<\/span>\u00a0<\/span><\/p>\n

Regulatory and operational advantages<\/span><\/b>\u00a0<\/span><\/p>\n