India has always held strong appeal for multinational corporations and startups alike. But in recent years, Gujarat International Finance Tec-City (GIFT City) has transformed into a powerful magnet for global capital. Positioned as India’s first and only International Financial Services Centre (IFSC), GIFT City is attracting an increasing number of Foreign Portfolio Investors (FPIs)—many of whom are shifting their strategies away from traditional investment hubs like Mauritius and Singapore. GIFT City Overtakes Mauritius & Singapore
This strategic redirection is driven largely by India’s compelling tax incentives, enhanced business infrastructure, and regulatory clarity—all of which position GIFT City as a future-ready global finance hub.
Why FPIs Are Moving from Mauritius and Singapore to GIFT City
For decades, jurisdictions like Mauritius and Singapore were favored by foreign investors due to their Double Taxation Avoidance Agreements (DTAs) with India. However, the landscape is rapidly changing.
Recent revisions to these treaties, along with new anti-avoidance rules like the Principal Purpose Test (PPT), are introducing greater scrutiny and compliance burdens. FPIs now must prove their jurisdictional choice and demonstrate genuine business activities in these countries—making these routes less predictable and more cumbersome.
In contrast, GIFT City offers transparent tax regulations and long-term policy stability, attracting investors seeking security and ease of operations.
GIFT City’s Tax Regime: A Game Changer
One of the biggest reasons for the surge in interest is GIFT City’s generous tax incentives. The Indian government offers a 10-year income tax exemption on business income for units operating from GIFT City—a benefit strongly backed by a robust legal framework.
Unlike treaties with other nations, which are subject to renegotiation, this exemption is unlikely to be altered, offering a rare level of certainty to investors. Legal experts, such as Vinod Joseph from Economic Laws Practice, underline the long-term stability of these exemptions compared to the volatile nature of international DTAAs.
Simplified Compliance and Lower Regulatory Barriers
Another major advantage of GIFT City is its streamlined regulatory environment. According to Rohit Arora, CEO and Co-founder of Biz2X, the new tax treaty amendments have increased reporting requirements for FPIs investing through Mauritius and Singapore. This added complexity is making GIFT City’s simplified framework far more attractive.
GIFT City is designed to minimize friction in financial operations, making it ideal for fund managers and institutional investors who value clarity, speed, and compliance ease.
100% NRI and OCI Ownership in GIFT City-Based Funds
The Securities and Exchange Board of India (SEBI) has also stepped in to boost the appeal of GIFT City. In a move welcomed by many, SEBI now allows Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) to own up to 100% of a global fund based in GIFT City.
Previously, these investors were capped at 50% ownership, limiting their ability to fully participate in fund management. This change represents a huge leap in inclusivity and control for global Indian investors—and a significant win for GIFT City’s fund ecosystem.
Lower Operational and Setup Costs Compared to Global Financial Hubs
Apart from regulatory and tax benefits, GIFT City offers lower business setup and operational costs compared to traditional hubs like Dubai and Singapore. This financial efficiency allows investors and businesses to operate more freely and with reduced overhead.
Siddharth Mody, Partner at JSA Advocates and Solicitors, points out that these lower costs make GIFT City a viable and flexible option for global investors aiming to manage operations and finances more effectively.
GIFT City: India’s Vision for a Global Financial Powerhouse
GIFT City isn’t just a tax haven—it’s a well-planned financial ecosystem with world-class infrastructure, global-standard regulations, and integrated services for banking, insurance, capital markets, and asset management.
The government’s vision is clear: to position GIFT City as India’s answer to Singapore and Dubai, offering not just tax relief but a holistic, future-facing financial ecosystem that supports growth, innovation, and global integration.
The Bottom Line: GIFT City Is Redefining Foreign Investment in India
The rise of GIFT City marks a major shift in the global investment landscape. By offering unmatched tax benefits, regulatory clarity, and operational efficiency, it is quickly outpacing traditional investment jurisdictions like Mauritius and Singapore.
Foreign Portfolio Investors are taking note—and making moves.
As India cements its position as a financial powerhouse in Asia, GIFT City is poised to become the preferred destination for global capital, fostering economic growth, international collaboration, and a new era of investment opportunities.
Ready to explore the future of global finance?
Get in touch with Rumi Global Properties today and discover investment opportunities in India’s first International Financial Services Centre—GIFT City.
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