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Listing of Shares in GIFT City – How to List at India INX & NSE IFSC?

Posted on October 13, 2025October 13, 2025 by Treelife

Introduction to GIFT City: India’s First International Financial Services Centre (IFSC)

What is GIFT City?

GIFT City (Gujarat International Finance Tec-City) is a state-of-the-art smart city located in Gujarat, India. Launched by the Government of India, it is designed to serve as the country’s first International Financial Services Centre (IFSC). The city aims to provide a robust platform for financial services, including banking, asset management, insurance, capital markets, and fintech, while also attracting global investment and facilitating international trade.

GIFT City is strategically positioned as a gateway for global financial services, enabling non-residents to conduct financial transactions in foreign currencies. It offers a competitive tax regime, regulatory flexibility, and world-class infrastructure to support the operations of international businesses and investors.

What is India INX?

India INX (India International Exchange) is the first international exchange to be established in GIFT City, operating under the regulatory framework of the International Financial Services Centres Authority (IFSCA). India INX facilitates trading in a variety of products, such as stocks, derivatives, ETFs, bonds, and commodities, providing an accessible platform for Indian and international investors.

What is NSE IFSC?

NSE IFSC is the International Financial Services Centre (IFSC) subsidiary of the National Stock Exchange of India, located in Gujarat’s GIFT City. It serves as a platform for Indian investors to access global markets, including trading in Unsponsored Depository Receipts (UDRs) for US-listed companies, and other international derivatives and debt securities. NSE IFSC also has a subsidiary, NSE International Clearing Corporation (NSEICC), which acts as the clearing corporation for trades on the platform

Benefits of Listing Shares at India INX & NSE IFSC:

Global Market Access: India INX & NSE IFSC provide companies with access to international investors, increasing visibility and liquidity. They help in attracting foreign investors and non-resident investors.
Favorable Tax Regime: Non resident investors investing in shares listed at India INX enjoy tax exemptions, including no securities transaction tax (STT), commodities transaction tax (CTT), and stamp duty. This reduces operational costs significantly.
Lower Compliance Barriers: Listing at India INX & NSE IFSC has simplified compliance requirements, with easier processes for non-resident investors and foreign currency trading. For instance, foreign investors are not required to obtain a Permanent Account Number (PAN) under certain conditions.
Expanded Trading Hours: India INX offers extended trading hours that overlap with markets in Asia, Europe, and the United States, making it easier for global investors to trade Indian securities.
Innovative Financial Products: Investors have access to a range of innovative products under the Global Access Program.

High-Level Statistics on GIFT City’s Growth and Its Impact on Capital Markets

GIFT City has rapidly grown into a leading financial hub, attracting investments, businesses, and financial institutions from across the globe. Below are key statistics highlighting the city’s impact on India’s capital markets:

Metric	Data
Registered Entities	930+
Stock Exchanges	2
Total Capital Raised	USD 65+ billion
Green/ESG Debt Listing	USD 15.43 billion
Banks Registered	72

#Source: – IFSCA Bulletin for April to June 2025

Key Growth Drivers:

Infrastructure: GIFT City is equipped with advanced infrastructure, including automated waste collection, district cooling systems, and underground utility tunnels, making it a sustainable and efficient environment for financial services.
Regulatory Environment: The presence of a unified regulatory body, the IFSCA, has streamlined the regulatory process, providing a stable environment for businesses and investors.
Global Appeal: GIFT City’s strategic location and robust infrastructure have made it an attractive destination for foreign investors and international firms seeking to capitalize on India’s financial market potential.

GIFT City and Why It’s a Hub for Equity Listing?

Overview of GIFT City: India’s Flagship Smart City for Finance

GIFT City, located between Ahmedabad and Gandhinagar in Gujarat, is India’s first International Financial Services Centre (IFSC). Established by the Government of India, it aims to position India as a global hub for finance, capital markets, asset management, and other financial services. With its world-class infrastructure and regulatory advantages, GIFT City attracts both international and Indian businesses seeking to operate in a dynamic, globalized environment.

The city spans 886 acres of land and has been developed as a “smart city” offering sustainable and efficient infrastructure. GIFT City provides a dedicated space for businesses to operate in an international financial ecosystem, where non-resident investors can trade in foreign currencies.

Key Stats:

Strategic Location: Positioned along National Highway 48, it is 25 minutes away from Ahmedabad International Airport.
Year Established: GIFT City was launched in 2007 and began operations as an IFSC in 2015.
Registered Entities: Over 930+ entities have registered in GIFT City as of December 2023.

Infrastructure & Regulatory Benefits

World-Class Infrastructure: GIFT City offers advanced systems like district cooling and waste management, alongside cutting-edge business and residential spaces, making it a prime location for financial operations.
Regulatory Framework: The IFSCA acts as a single unified regulator, streamlining compliance for businesses and simplifying access to global markets.
Tax Benefits: Companies in GIFT City enjoy exemptions from securities transaction tax (STT), commodities transaction tax (CTT), and stamp duties, alongside other fiscal incentives.

GIFT City as a Global Hub for International Finance

GIFT City is not only a financial center for Indian companies but has rapidly become an international hub for financial services. The city’s strategic location, combined with its attractive regulatory environment, has led to its role as a gateway for global market access.

Fostering Financial Services and Asset Management

GIFT City provides businesses with access to an array of financial services:

Capital Markets: With the operational India INX and NSE IFSC, GIFT City serves as an international stock exchange, enabling Indian companies to list shares and raise capital through global markets.
Asset and Wealth Management: The city is home to numerous asset management firms, private equity funds, and venture capitalists that are leveraging GIFT City’s tax incentives and international appeal.

Attracting Global Investors

Non-Resident Investors: GIFT City’s flexibility allows non-resident Indians (NRIs), foreign portfolio investors (FPIs), and other foreign investors to invest in Indian markets, including through equity listings. The exemption from stamp duty and other transaction taxes makes it highly attractive.
Financial Products: GIFT City has become a major player in international financial products, such as green bonds, foreign currency debt securities, and Masala Bonds. It also facilitates the trading of ESG-compliant products.

Key Stats on Global Appeal:

Growth of Registered Entities: Over 930+ entities as of 2025, representing a diverse range of global financial services.
Trading Volume: GIFT City has seen a significant increase in trading volume, with equity and derivative products being actively traded on India INX and NSE IFSC.
Commitments Raised: A total of USD 22 billion plus raised through capital markets as of 2025.

Why is GIFT City Crucial for Equity Listings?

GIFT City’s infrastructure, tax advantages, and international market access make it an ideal destination for equity listings. Indian and foreign companies can list their shares on India INX, benefiting from increased visibility, market liquidity, and the potential to tap into international capital.

By choosing to list in GIFT City, companies can leverage the unique global appeal of the city and access international investors looking for innovative, tax-advantageous investment opportunities.

How to List Shares in GIFT City: The Step-by-Step Process

Step 1: Eligibility Criteria

Who Can List Shares in GIFT City?

GIFT City provides an opportunity for both Indian and foreign companies to list shares and raise capital through its stock exchanges, like India INX and NSE IFSC. The eligibility criteria for listing shares in GIFT City are as follows:

Indian Public Companies: Indian companies that meet the requirements set by the IFSCA (International Financial Services Centres Authority) and SEBI (Securities and Exchange Board of India) can list their shares in GIFT City, especially on India INX.
Foreign Companies: International companies, particularly those seeking access to the Indian capital market, can list their shares on India INX. This is especially beneficial for foreign companies looking to raise funds in foreign currencies such as USD, EUR, and GBP.
Private Companies (with conditions): Private companies may also be eligible for listing, but they must meet specific conditions outlined by the IFSCA and SEBI, including prior approval for transitioning from private to public status.

India INX’s & NSE IFSC Role in Providing Listings

India INX (India International Exchange) & NSE IFSC are the premier international exchanges located within GIFT City. They play a crucial role in facilitating listings for both Indian and foreign companies, offering them access to global capital markets. The exchange provides a platform for equity listings, derivatives trading, and a variety of other financial products, such as bonds, commodities, and debt securities.

Equity Listings: Companies can list their shares on India INX to access global liquidity and reach a broader investor base.
Foreign Currency Trading: India INX allows companies to list and trade shares in foreign currencies, which appeals to international investors, especially Non-Resident Indians (NRIs) and Foreign Portfolio Investors (FPIs).

Direct Listing Without Prior IPO

GIFT City facilitates direct listings for companies, meaning they can list shares without needing to go through the traditional Initial Public Offering (IPO) process. This route is particularly beneficial for companies that do not need to raise new capital but wish to access liquidity or broaden their shareholder base.

Direct Listing Advantages:
- Cost Savings: Direct listings eliminate the need for underwriting fees and other IPO-related costs.
- Faster Market Access: Companies can enter the market quickly, without the delays typically associated with IPO processes.
- Global Investor Base: Companies can list in foreign currencies and attract investors globally, offering a more diversified pool of investors.

This process enables companies to gain market visibility and liquidity without the lengthy and expensive IPO process, making it a highly efficient route for many companies.

Step 2: Regulatory Framework and Approvals

Key Regulatory Authorities

The listing process in GIFT City is governed by several regulatory bodies, which ensures a streamlined process for businesses while adhering to international standards.

IFSCA (International Financial Services Centres Authority): The IFSCA is the principal regulatory body overseeing all financial activities in GIFT City. It provides a unified framework for the regulation of financial markets, making it easier for companies to operate within the city’s financial ecosystem.
SEBI (Securities and Exchange Board of India): SEBI regulates the securities market in India, including listing and trading requirements for companies listed on India INX and NSE IFSC. It provides oversight to ensure compliance with market norms, protecting both companies and investors.
Ministry of Finance: The Ministry of Finance plays a crucial role in policy formation and ensuring that GIFT City aligns with national economic goals, including fiscal regulations and compliance with international standards.

Filing Requirements for Listing

Before a company can list its shares on India INX, certain filing requirements must be met. These include:

Application to IFSCA: Companies must submit a detailed application to the IFSCA, including:
- Financial statements for the past few years.
- Business and corporate governance documents.
- Risk management and compliance plans.
Disclosure Documents: Companies need to disclose all relevant information about their business activities, financial health, and regulatory compliance to ensure transparency and protect investors.

Step 3: Direct Listing Process

Direct Listing on India INX, NSE IFSC and Other Stock Exchanges

The direct listing process on India INX involves several critical steps:

Preparation and Documentation:
- Companies need to prepare all necessary documents, including financial statements, business plans, and corporate governance structures.
- A prospectus must be created detailing the company’s performance and future outlook.
Application Submission:
- Submit the listing application to IFSCA along with all required documents.
- IFSCA will review the application for compliance with its guidelines and regulatory standards.
Approval from IFSCA Authority:
- Once the application is reviewed, IFSCA will issue a formal approval for the listing.

Listing and Trading:
- After obtaining approval, the company’s shares will be officially listed on India INX, and they can begin trading on the exchange.
- Companies can opt to list in foreign currencies such as USD, EUR, or other globally recognized currencies.
Post-Listing Compliance:
- Companies must comply with ongoing regulatory requirements, including regular financial disclosures, corporate governance practices, and tax filings as per IFSCA and SEBI guidelines.

Benefits and Challenges for Indian Companies Opting for Direct Listing

Benefits:

Cost Efficiency: Direct listings eliminate underwriting fees, saving companies money.
Global Reach: By listing on India INX, companies tap into a broader, global investor base, especially non-resident investors.
Faster Liquidity: Direct listings allow quicker access to capital and liquidity without the waiting period associated with traditional IPOs.

Challenges:

Limited Initial Investor Awareness: Without the publicity and marketing efforts of an IPO, a direct listing may struggle with initial investor interest.
Liquidity Concerns: Despite the growing popularity of GIFT City, liquidity may still be lower compared to more established stock exchanges like the NYSE or LSE.

Advantages for Non-Resident Investors and Foreign Currencies

A key advantage of listing shares in GIFT City is the ability to trade in foreign currencies. This attracts international investors who prefer to invest in USD, GBP, and other major currencies, rather than dealing in Indian Rupees (INR). Non-resident investors (NRIs) and Foreign Portfolio Investors (FPIs) can also participate in the equity listing process with reduced compliance compared to domestic listings. They are not required to obtain a PAN or file tax returns if they meet the specified criteria

Understanding the Direct Listing Scheme in GIFT City

The Direct Listing Scheme introduced by the Indian government enables Indian public companies to list their equity shares directly on international stock exchanges. This scheme begins with the India INX and NSE IFSC exchanges in GIFT City, India’s first International Financial Services Centre (IFSC). By allowing companies to list without first having to go through a domestic listing process, this initiative provides Indian companies with a valuable opportunity to raise foreign capital, attract international investors, and expand their market reach.

Key Highlights of the Direct Listing of Securities:

No Need for Prior Indian Listing: Companies can list directly on international exchanges without listing in India first.
Aims to Boost Foreign Capital: This scheme is designed to help Indian companies increase their valuations, expand global access, and attract foreign investment.
Regulated Framework: The scheme is governed by several regulations, including Section 23(3) of the Companies Act, 2013 and Schedule XI of FEMA (Non-Debt Instruments) Rules, 2019.

Who is Eligible for the Direct Listing Scheme?

The Direct Listing Scheme is currently available only to unlisted public companies in India. This opens up new avenues for those companies that have not yet gone public in India but wish to access global markets.

Ineligible Companies:

Companies that are willful defaulters, under investigation, or in default on public deposits or loans.
Section 8 or Nidhi companies are also excluded.

Private companies are not eligible for this scheme. This ensures that only companies with a clean financial history and a solid market reputation are allowed to list under this initiative.

Approved International Exchanges for Direct Listing

Currently, GIFT City IFSC houses the only exchanges authorized for direct listings in India:

India INX: A subsidiary of the Bombay Stock Exchange (BSE), it provides a platform for both Indian and foreign companies to list their shares.
NSE IFSC: A subsidiary of the National Stock Exchange, NSE IFSC offers a similar platform for companies seeking to list in GIFT City.

Both exchanges are regulated by the IFSCA (International Financial Services Centres Authority) to ensure global standards of financial operations

Compliance Requirements for Listing

For companies wishing to list under the Direct Listing Scheme, several compliance requirements must be met:

FEMA Compliance: Companies must comply with FEMA (Foreign Exchange Management Act) rules related to non-debt instruments.
Companies Listing Rules, 2024: Companies must follow these rules that govern the listing process and procedures for companies.
IFSCA Regulations, 2021: These regulations specify how securities should be issued and listed on exchanges in GIFT City IFSC.
MCA e-Form LEAP-1: This form must be filed within 7 days of submitting the prospectus to the exchange.

Additionally, companies must comply with SEBI regulations, the Companies Act, and PMLA (Prevention of Money Laundering Act).

Who Can Invest in Shares Listed under the Scheme?

The Direct Listing Scheme allows non-resident investors to participate in the listed shares. Eligible investors include:

Non-Resident Indians (NRIs)
Foreign Institutional Investors (FIIs)
Foreign companies and individuals

However, Indian residents and Indian mutual funds are not permitted to invest under this scheme. Entities from land-bordering countries must seek prior approval from the Government of India before participating in the investment process.

Can Existing Shareholders Offer Shares for Sale?

Yes, under the Direct Listing Scheme, existing shareholders are allowed to sell their shares as part of an Offer for Sale (OFS) during the listing process. This provides a liquidity option for original investors who wish to exit or reduce their stake

Does This Count as Foreign Investment?

Investments made through the Direct Listing Scheme are categorized as Foreign Direct Investment (FDI). As such, these investments are subject to the FDI sectoral caps and must adhere to the regulations that govern foreign investments in India. Companies must ensure that they do not venture into sectors where FDI is restricted or prohibited

Dual Listings: Is Domestic Listing Required?

No, a domestic listing is not required for companies to list on India INX or NSE IFSC under the Direct Listing Scheme. Companies can choose to list exclusively on the international exchanges within GIFT City IFSC. However, companies have the option to pursue dual listings later if they wish to list their shares both domestically and internationally

Incentives for Investors

Investors who engage in GIFT City-based listings benefit from several key incentives:

No Capital Gains Tax: Foreign investors are exempt from capital gains tax when selling shares listed in GIFT City.
Forex-Denominated Trades: Investors can trade in foreign currencies (USD, EUR, etc.), avoiding currency risks.
Extended Trading Hours: With 20+ hours of daily trading, GIFT City exchanges allow for seamless trading across multiple time zones.
Globally Aligned Standards: The exchanges maintain global standards for listing and disclosure, ensuring transparency and trust.
Regulatory Certainty: The IFSCA ensures a clear and stable regulatory environment, boosting investor confidence.

Who Regulates the Direct Listing Framework?

The International Financial Services Centres Authority (IFSCA) is the primary regulator overseeing the Direct Listing Scheme in GIFT City IFSC. The IFSCA combines the powers of several key Indian financial regulators to ensure comprehensive oversight:

RBI: Reserve Bank of India
SEBI: Securities and Exchange Board of India
IRDAI: Insurance Regulatory and Development Authority of India
PFRDA: Pension Fund Regulatory and Development Authority

This unified regulatory framework provides a seamless experience for companies and investors alike, ensuring that global standards are upheld.

Infrastructure in GIFT City for Direct Listing

GIFT City is equipped with cutting-edge infrastructure to support the listing and trading of securities, including:

Stock Exchanges: India INX and NSE IFSC facilitate the listing of shares and other securities.
Clearing Corporations: India International Clearing Corp (IFSC) and NSE IFSC Clearing Corp handle the settlement of transactions.
Depository: India International Depository IFSC Ltd ensures secure holding and transfer of securities.
Banking Network: A comprehensive network of Indian and international banks is operational in GIFT City, offering seamless financial services to businesses.

Equity Listing in GIFT City: Benefits and Challenges

Benefits

Access to Global Capital: Allows companies to raise funds in foreign currencies (USD, EUR, GBP) from a wider pool of international investors, including FPIs and NRIs, increasing global visibility.
Lower Operational Costs: Offers cost savings through tax exemptions (no STT, CTT, or stamp duty) and reduced compliance costs due to a simpler regulatory framework.
Tax Exemptions and Fiscal Advantages: Key incentives include no capital gains tax for investors and the ability to trade in foreign-denominated currencies, mitigating currency risk.

Challenges

Regulatory Hurdles: Companies must navigate complex regulations and obtain approvals from multiple bodies (IFSCA, SEBI, SEZ), and deal with cross-border regulatory frameworks.
Market Liquidity Concerns: Liquidity may be lower compared to established global exchanges (NYSE, LSE), which could challenge companies in gaining initial investor traction and concern investors about exit strategies.
Cross-Border Taxation: Companies must understand and comply with complex international tax treaties and the Foreign Exchange Management Act (FEMA), adding complexity to tax compliance and foreign investment caps.

IPO Listing in GIFT City: A Special Focus

The GIFT City platform offers a competitive and regulatory-friendly environment for companies looking to list their Initial Public Offerings (IPOs), with access to international investors and numerous benefits.

How IPO Listings Are Conducted in GIFT City

The process of IPO listing in GIFT City is highly structured and designed to provide seamless access to capital markets for companies looking to raise funds. Here’s a breakdown of the IPO listing process and key steps involved:

Eligibility and Application
- Companies must meet certain criteria, including financial performance, governance standards, and compliance with SEZ and IFSCA regulations.
- An application is submitted to the International Financial Services Centre Authority (IFSCA) for approval, along with financial disclosures and other required documentation.
Approval and Regulatory Review
- IFSCA and SEZ authorities review the application to ensure compliance with international standards.
- Approval is granted once the regulatory checks are complete, and the company is cleared for listing.
Listing on India INX
- Once approved, companies list their shares on India INX, which offers the fastest trading platform in the country.
- Trading begins, and the company gains access to a global pool of investors.
Post-Listing Compliance
- Companies must comply with continuous reporting requirements to maintain their listing status. This includes quarterly financial disclosures and adherence to corporate governance practices.

IPO Process Timeline in GIFT City

Step	Duration	Description
Eligibility & Application	1-2 months	Application submission with necessary documents
Approval & Regulatory Review	1-3 months	IFSCA and SEZ authorities review the application
Listing on India INX	1-2 months	Approval granted, shares are listed and traded
Post-Listing Compliance	Ongoing	Quarterly reports and adherence to governance

Recent Trends and Success Stories

Several high-profile IPOs launched via India INX and NSE IFSC have captured the attention of both domestic and international investors. Here’s a look at some notable IPO trends and success stories in the region:

Success Story: Nifty Futures Listing

One of the key highlights of GIFT City’s success is the listing of Nifty Futures on India INX. The introduction of Nifty Futures as a high-volume product has significantly increased liquidity and trading activity on India INX, positioning the exchange as a key player in the global derivatives market.

Other High-Volume Products

GIFT City has also seen successful listings of several other high-volume financial products, including bonds, ETFs, and structured financial instruments. These products have helped attract significant institutional interest, further solidifying GIFT City’s reputation as a preferred listing destination for companies.

Taxation, Compliance, and Regulatory Advantages for Listing on GIFT City

GIFT City, India’s International Financial Services Centre (IFSC), provides multiple regulatory and financial benefits for companies listing on exchanges like India INX.

Tax Benefits for Non-Residents

Exemption from Capital Gains Tax: Non-resident investors are exempt from capital gains tax on foreign-listed securities.
No Withholding Tax: There’s no withholding tax on dividends or interest income for foreign investors, enhancing returns.

Transaction Taxes

No Securities Transaction Tax (STT): Transactions in GIFT City exchanges are free from STT, unlike traditional Indian exchanges.
No Commodities Transaction Tax (CTT): Investors avoid the CTT, a significant saving in trading costs.
No Stamp Duty: Transactions within GIFT City are not subject to stamp duties, reducing overall transaction costs.

Compliance Ease

Simplified KYC: Non-residents can complete a simplified KYC process, easing the compliance burden.
No PAN Requirement: Non-resident investors do not need a PAN to transact, simplifying investment procedures.

Future of Equity Listings in GIFT City and India INX

Upcoming Regulations

GIFT City’s regulatory framework is evolving to streamline the listing process and protect investors, with potential changes in cross-border trading and investor protections.

Growing Popularity Among Foreign Investors

Foreign investors are increasingly flocking to GIFT City due to its tax incentives, ease of compliance, and access to global capital markets, boosting liquidity and diversifying investment products.

Emerging Trends: Remote Broker-Dealers

The rise of remote broker-dealers is expanding GIFT City’s global reach, making it easier for international investors to trade in Indian markets through automated systems and seamless cross-border operations.

In conclusion, GIFT City has firmly established itself as India’s premier International Financial Services Centre (IFSC), providing a transformative platform for equity listings through its state-of-the-art exchanges, India INX and NSE IFSC. By offering unparalleled access to global capital, a highly favorable tax regime with exemptions on capital gains for non-residents and transaction taxes like STT, and a simplified regulatory environment under the unified IFSCA, it presents a powerful alternative to traditional financial hubs. The innovative Direct Listing Scheme is a game-changer, enabling unlisted Indian public companies to efficiently tap into international markets, raise funds in foreign currencies, and attract a diverse base of foreign investors. This strategic combination of world-class infrastructure, significant cost advantages, and streamlined compliance makes GIFT City a vital and rapidly growing gateway for companies seeking global visibility and for investors targeting India’s dynamic market.

Setting up a PMS in GIFT City – Step by Step Guide

Posted on October 13, 2025October 13, 2025 by Treelife

What is a Portfolio Management Service (PMS)?

A Portfolio Management Service (PMS) is a professional investment management offering where an experienced fund manager, on behalf of a client, manages a portfolio of investments (typically stocks, bonds, or other securities). Unlike mutual funds, a PMS often offers personalized, goal-oriented strategies and a greater degree of portfolio customization tailored to an individual client’s financial needs and risk appetite.

By setting up your PMS in GIFT City—India’s first International Financial Services Centre (IFSC)—you gain access to a unique regulatory sandbox, tax incentives, and the ability to transact in foreign currencies, attracting sophisticated global investors. Your PMS will operate as a Fund Management Entity (FME) regulated by the IFSCA.

How to Setup PMS in GIFT City – Detailed Steps

Step 1: Establish Your Legal Presence in GIFT IFSC

The first critical step is establishing a legal entity within the GIFT City IFSC. This entity will be your officially registered Fund Management Entity (FME).

Your legal structure can take one of the following forms:

New Incorporation: A new company or Limited Liability Partnership (LLP) specifically incorporated within the IFSC.
Branch Office: A branch of an existing Indian or foreign body corporate.
Subsidiary: A wholly or partly-owned subsidiary of an Indian or foreign company.

This entity acts as a “deemed foreign territory” for financial transactions, simplifying compliance for international investors.

Step 2: Fulfill Core Capital and Professional Requirements

The IFSCA has clear eligibility criteria to ensure financial stability and professional competence. Your FME must strictly adhere to these requirements:

Requirement	Details
Minimum Net Worth	Maintain a minimum net worth of USD 500,000 at all times.
Physical Presence	You must secure and maintain a physical office within the GIFT IFSC.
Principal Officer	Must have a minimum of five years of relevant experience in the securities market and meet the IFSCA’s “fit and proper” criteria.
Compliance & Risk Manager	Must have at least three years of relevant experience in the compliance and risk domain.

Step 3: Complete the IFSCA Registration Process

Once your legal entity and key personnel are in place, you proceed to the formal registration with the IFSCA.

Submit Application: Download and complete the official FME application form. This, along with all supporting documents, must be submitted via email to the IFSCA at applications@ifsca.gov.in.
Provide Documentation: The application package is extensive and must include:
- Corporate Documents: Certificate of Incorporation, Memorandum and Articles of Association.
- Financials: Net worth certificate and Audited Financial Statements for the last three years.
- Business Plan: A detailed operational and business strategy for the GIFT IFSC.
- Due Diligence: KYC documents for all promoters, directors, and Key Managerial Personnel (KMPs).
- Structure: Details of the complete shareholding structure.
- Fee Proof: Proof of payment for the application fee.
Pay Prescribed Fees: You must submit the required non-refundable application, registration, and annual fees:
- Application Fee: USD 2,500 (One-time).
- Registration Fee: USD 7,500 (Non-retail FME) to USD 10,000 (Retail FME).
- Annual Fee: USD 5,000 (Recurring).

Step 4: Finalize Client and Operational Setup

Upon receiving final registration approval from the IFSCA, you must set up the necessary operational framework for client transactions.

Minimum Client Investment: For each client, you must accept a minimum investment of USD 75,000.
Segregated Accounts: Set up a separate foreign currency bank account for each client at an IFSC Banking Unit (IBU), along with a separate demat account. This ensures clear segregation of client funds.
Client Agreements: Draft a comprehensive written agreement with each client covering investment objectives, fee structure, risk factors, and contract duration.
Appoint a Custodian: Engage an independent, qualified custodian to hold investor assets. This is mandatory to ensure transparency and prevent any conflict of interest.

Key Benefits of Establishing a PMS in GIFT City

Setting up your GIFT City PMS offers significant competitive advantages over traditional structures, making it highly attractive to global investors:

Unmatched Tax Exemptions: Enjoy a 100% tax exemption on business profits for 10 years and complete exemption from GST, STT, and CTT.
Full Foreign Currency Freedom: Conduct all financial services in specified foreign currencies, simplifying international operations.
Simplified, Unified Regulation: Benefit from a single regulatory body, the IFSCA, providing a streamlined, globally competitive environment.
Direct Access to Global Markets: Invest directly in a wide range of global securities, offering greater diversification for clients.

Conclusion: Capitalize on the Global Opportunity

Establishing a Portfolio Management Service (PMS) in GIFT City IFSC is more than just setting up an office; it’s securing a passport to global finance. The IFSCA’s simplified compliance, coupled with powerful tax benefits and access to foreign capital, makes the GIFT IFSC the premier destination for fund managers looking to scale internationally.

By meticulously following the steps for FME registration—from securing your legal presence and meeting the minimum net worth of USD 500,000, to finalizing client accounts with a minimum investment of USD 75,000—you position your firm at the forefront of India’s financial globalization.

Ready to launch your PMS in GIFT City? Contact our expert advisory team today to navigate the IFSCA registration process and accelerate your journey toward managing global assets.

Aircraft Leasing & Financing in GIFT City IFSCA

Posted on October 7, 2025October 7, 2025 by Treelife

Introduction

Aircraft Leasing in GIFT City – A New Era for Aviation Finance

Aircraft leasing in GIFT City has become a game-changer for India’s aviation sector. With the majority of Indian airlines traditionally depending on global hubs like Ireland and Singapore for aircraft finance, the creation of a dedicated framework at GIFT IFSC provides a domestic alternative that offers both cost efficiency and regulatory clarity.

Significance for India’s Aviation Growth

India is currently the third-largest domestic aviation market and is on track to become the third-largest overall aviation market by 2030.
Fleet expansion is inevitable: industry forecasts suggest 1,500–2,000 new aircraft will be required by 2040 to meet passenger growth.¹
A local hub for aircraft finance in GIFT City reduces dependency on foreign lessors, lowers leasing costs, and creates an ecosystem for investors, airlines, and financiers.

Why GIFT IFSC as a Global Hub

Tax Incentives: Units enjoy a 10-year tax holiday within a 15-year block, exemption from GST, and reduced withholding taxes.
Ease of Doing Business: Single-window approvals and globally aligned IFSCA regulations make it simpler for lessors and financiers to set up operations.
Strategic Location: Positioned in Gujarat International Finance Tec-City (GIFT), it offers infrastructure on par with leading global financial hubs.

Rising Momentum in Aircraft and Engine Leasing

According to industry data, aircraft and engine leasing transactions at GIFT City rose by 30% in 2024 year-on-year.
Growing participation of aircraft leasing companies signals a shift in aviation finance in GIFT City, with international and domestic players leveraging the operating lease of aircrafts and finance lease of aircrafts structures to serve Indian airlines more effectively.

What is Aircraft Leasing & Financing?

Aircraft leasing and financing are the backbone of modern aviation, enabling airlines to expand fleets without heavy upfront capital. For India, where rapid air travel growth demands thousands of new aircraft, aircraft leasing in GIFT City provides a strategic domestic solution.

Types of Aircraft Leases

Operating Lease of Aircrafts

Short to medium-term arrangement (typically 3–10 years).
Ownership remains with the lessor; the airline only pays for use.
Allows flexibility for airlines to return or replace aircraft at lease-end.
Commonly used by low-cost carriers expanding capacity without long-term commitments.

Finance Lease of Aircrafts

Long-term lease (often covering most of the aircraft’s useful life).
Treated as an asset purchase with financing; lessee assumes risks and rewards of ownership.
Useful for full-service carriers planning to retain aircraft longer.

Comparison Table: Operating Lease vs Finance Lease

Feature	Operating Lease of Aircrafts	Finance Lease of Aircrafts
Ownership	Lessor retains	Lessee effectively owns
Duration	3–10 years	10–20 years
Balance Sheet Impact	Off-balance sheet	On-balance sheet (capital asset)
Risk	Lessor bears	Lessee bears
Flexibility	High (easy replacement)	Low (long-term commitment)

Size of the Global Aviation Finance Market

The global aircraft leasing industry is valued at USD 300+ billion.
Over 50% of the world’s commercial fleet is leased rather than owned outright.
Major hubs: Ireland, Singapore, Hong Kong – but India is building its alternative in GIFT IFSC.

Why India Needs Aviation Finance in GIFT City

Dependency on Foreign Lessors: More than 80% of India’s commercial fleet is currently leased through Ireland and Singapore.
This leads to higher costs, exposure to foreign tax regimes, and limited domestic control.
Establishing a strong aviation finance ecosystem in GIFT City ensures:
- Lower leasing costs for Indian airlines.
- Retention of financing profits within India.
- Improved access for domestic investors and financiers.
- Greater legal and regulatory control aligned with Indian aviation policy.

Why GIFT City for Aircraft Leasing & Financing?

GIFT IFSC has emerged as India’s answer to global leasing hubs like Ireland and Singapore. It provides a competitive ecosystem for aircraft leasing companies in GIFT City, combining tax efficiency, regulatory clarity, and ease of operations. For both international and domestic lessors, it offers a strategic gateway to tap into India’s rapidly growing aviation market.

Key Advantages of Setting Up in GIFT City

1. 100% Foreign Ownership Permitted

International lessors can establish fully-owned entities without local ownership restrictions.
Encourages global players to directly enter the Indian aviation finance market.

2. Tax Incentives

10-year tax holiday available in a 15-year block period.
Exemption from Minimum Alternate Tax (MAT) for units availing holiday.
No GST or stamp duty on leasing transactions and related documentation.
Reduced withholding tax of 3–4% vs ~20% in traditional jurisdictions.

3. Regulatory Clarity

Governed under the IFSCA (Finance Company) Regulations, 2021 and Aircraft Leasing Framework, 2022 as amended from time to time.
Clearly defined categories: Operating lease of aircrafts, Finance lease of aircrafts, hybrid structures.
Streamlined compliance with DGCA and international aviation standards (Cape Town Convention aligned).

4. Ease of Doing Business

Single-window clearance system for licensing, tax registrations, and approvals.
Infrastructure and banking ecosystem tailored for global financial services.
Faster turnaround for setting up and executing leases compared to offshore hubs.

Tax & Regulatory Benefits: GIFT IFSC vs Global Leasing Hubs

Benefit	GIFT IFSC (India)	Ireland	Singapore
Corporate Tax	10-year holiday (within 15-year block)	12.5%	17%
Withholding Tax	0%	~20%	~15%
GST / Stamp Duty	Exempt subject to certain conditions	Applicable	Applicable
Foreign Ownership	100% allowed	Limited	Limited

Why This Matters for Aviation Finance in GIFT City

Lower leasing costs for Indian airlines compared to deals routed through Ireland/Singapore.
Stronger domestic control over financing structures, reducing dependency on foreign jurisdictions.
Attractive entry point for global leasing firms exploring the Indian and Asian markets.
Improved profitability for lessors due to tax savings and exemptions.

In essence, aircraft finance in GIFT City offers international-standard leasing structures at a fraction of the cost of traditional hubs. With its unique mix of tax benefits, 100% foreign ownership, and regulatory clarity, GIFT IFSC is well-positioned to become the preferred destination for both operating leases and finance leases of aircrafts in Asia.

Net-Worth Requirements for Aircraft Leasing Entities in GIFT City

1. Operating Lease Companies (Short- to Medium-Term Leasing)

Minimum Net-Owned Fund (NOF): USD 200,000 as prescribed by the IFSCA Aircraft Leasing Framework 2022.
This modest threshold encourages new entrants and startups to participate in aircraft leasing without heavy capital outlay.
Ideal for Operating Lease Companies (OLCs) that rent aircraft to airlines for 3–10 years, retaining ownership of the aircraft throughout.
The lighter net-worth requirement supports flexibility, enabling low-cost carriers and smaller lessors to test the market from GIFT City.

2. Finance Lease Companies (Long-Term, Ownership-Linked Leasing)

Minimum Net-Owned Fund (NOF): USD 3 million, significantly higher to reflect the longer tenure and credit exposure of Finance Lease Companies (FLCs).
These entities structure leases that transfer substantial ownership benefits to the lessee and often extend over 10–20 years.
The higher capitalization ensures financial resilience and compliance with prudential norms, enhancing counter-party confidence for both Indian and foreign airlines.

3. Why Net-Worth Norms Matter

The net-worth criteria act as a financial safeguard ensuring stability of lessors and protecting lessees against under-capitalized operators.
They also determine the type of activities permitted — e.g., aircraft financing, engine leasing, or sale-and-leaseback structures — under IFSCA supervision.

The IFSCA Aircraft Leasing Framework (2022)

To create a globally competitive ecosystem for aviation finance, the International Financial Services Centres Authority (IFSCA) introduced the Aircraft Leasing Framework in 2022, under the IFSCA (Finance Company) Regulations, 2021. This framework provides legal certainty, structured processes, and favorable conditions for lessors and financiers to operate from GIFT City.

Finance Company (FC) and Finance Unit (FU) Defined

Finance Company (FC): A company incorporated in GIFT IFSC specifically to undertake aircraft leasing and financing activities.
Finance Unit (FU): A branch or unit of an existing foreign or Indian entity set up in GIFT City to carry out leasing operations.

This dual structure allows both new entities and global players to participate in India’s leasing ecosystem seamlessly.

Categories of Aircraft Leasing under IFSCA

The framework permits multiple leasing models, offering flexibility to lessors:

Operating Lease of Aircrafts – Short/medium-term leases with ownership retained by lessor.
Finance Lease of Aircrafts – Long-term leases structured as financing arrangements.
Hybrid Leases – Customized structures combining features of both operating and finance leases.

Registration Requirements with IFSCA

Mandatory registration with IFSCA before commencing leasing activities.
Submission of application detailing business plan, financials, and compliance framework.
Approval granted only after meeting capital adequacy and governance standards.

Capital Adequacy Norms

Entities must maintain minimum net-owned funds (NOF) as prescribed by IFSCA.
Ensures financial stability and protects airline lessees from under-capitalized lessors.

Permitted Activities under the Framework

Registered Finance Companies (FCs) and Finance Units (FUs) in GIFT City can undertake:

Leasing of aircraft and helicopters.
Engine leasing and spare parts leasing.
Financing of aircraft purchases.
Transfer of aircraft ownership.
Ancillary aviation finance services.

Recent Growth & Market Trends in Aircraft Leasing at GIFT City

The aircraft leasing ecosystem in GIFT City has witnessed rapid momentum, making it one of the fastest-growing segments of India’s aviation finance market. With supportive regulation, tax benefits, and rising domestic demand, both international and Indian lessors are increasingly establishing their presence in the International Financial Services Centre (IFSC).

Market Growth Highlights

30% year-on-year growth in aircraft and engine leasing transactions recorded in 2024.
By early 2025, more than 20 aircraft leasing companies in GIFT City had registered with IFSCA.
Market confidence is reflected in rising participation by both domestic NBFC arms and foreign leasing firms.

India’s Expanding Aircraft Demand

India is projected to induct 1,500–2,000 new aircraft by 2040, driven by passenger traffic growth and fleet modernization.
Current fleet: ~700 commercial aircraft (as of 2024), with expected doubling in the next 10 years.
Leasing will account for a majority of these acquisitions due to lower upfront costs.

Table: India’s Aircraft Fleet Forecast

Year	Estimated Fleet Size	Share Leased (%)	Key Drivers
2024	~700	80%+	Domestic travel boom, foreign leases
2030	~1,200	75–80%	Low-cost carrier expansion
2040	~2,000+	70–75%	Replacement + growth demand

# https://www.airbus.com/sites/g/files/jlcbta136/files/2022-05/FINAL%20-%20Airbus%20IMF%20Press%20Release_Wings%20India%202022.pdf
# https://www.civilaviation.gov.in/sites/default/files/2025-03/Annual%20Report%20Civil%20Aviation%20for%20the%20year%202024-25%20English_0.pdf

Domestic Airlines Exploring GIFT IFSC Structures

IndiGo and Air India are actively evaluating GIFT City leasing models to optimize costs.
Leasing through GIFT reduces reliance on Ireland/Singapore and allows better alignment with Indian regulations.
Provides airlines with access to operating leases of aircrafts and finance leases of aircrafts under favorable tax regimes.

Growing Presence of Aircraft Leasing Companies in GIFT City

International lessors see GIFT as a gateway to the Indian aviation market, given the country’s high growth trajectory.
Domestic players, including NBFC subsidiaries of major banks, are setting up leasing arms within IFSC.
This combination creates a balanced ecosystem with both global expertise and local financing support.

The combination of 30% growth in 2024, over 20 registered lessors, and projected demand for 2,000 aircraft by 2040 underscores why aviation finance in GIFT City is gaining traction. By attracting both domestic and global leasing companies, GIFT IFSC is positioning itself as Asia’s next big hub for aircraft leasing and financing.

Legal & Regulatory Ecosystem for Aircraft Leasing in GIFT City

The strength of aircraft leasing in GIFT City lies in its robust legal and regulatory framework. The ecosystem has been designed to provide clarity, international alignment, and investor confidence while ensuring smooth coordination with Indian aviation and financial laws.

IFSCA (Finance Company) Regulations, 2021

Forms the primary regulatory backbone for finance companies and finance units operating in GIFT IFSC.
Governs eligibility, licensing, prudential norms, and permitted activities for entities undertaking aircraft finance in GIFT City.
Provides a single regulatory authority (IFSCA) with powers across financial services, ensuring ease of business and reduced overlap with multiple regulators.

Aircraft Leasing Framework, 2022

Introduced by IFSCA to specifically cover operating lease of aircrafts, finance lease of aircrafts, and hybrid models.
Defines registration processes, compliance obligations, and capital adequacy requirements.
Expands permitted activities to include engine leasing, aircraft transfer, and ancillary aviation financing.
Brings India’s leasing market closer to global hubs like Ireland and Singapore in terms of regulatory clarity.

Interaction with DGCA and Ministry of Civil Aviation

Directorate General of Civil Aviation (DGCA): Oversees safety certifications, airworthiness approvals, and aircraft registration in India.
Ministry of Civil Aviation (MoCA): Provides policy direction, sectoral approvals, and ensures alignment with India’s aviation growth strategy.
Entities in GIFT City benefit from coordinated clearances between IFSCA, DGCA, and MoCA, reducing compliance delays.

Alignment with Cape Town Convention

India is a signatory to the Cape Town Convention and Aircraft Protocol, which strengthens international enforcement.
Provides creditor-friendly repossession rights, crucial for global lessors evaluating jurisdictional risk.
Enhances confidence for foreign investors and financiers, ensuring lease contracts signed in GIFT IFSC are internationally enforceable.

FEMA & Companies Act Compliance for Indian Lessors

Leasing structures involving Indian airlines must comply with Foreign Exchange Management Act (FEMA) provisions, particularly for cross-border remittances and payments.
Entities incorporated as Finance Companies (FCs) or Finance Units (FUs) must adhere to governance and disclosure standards under the Companies Act, 2013.
Ensures transparency, accounting compliance, and investor protection in leasing transactions.

The legal and regulatory ecosystem in GIFT City integrates IFSCA regulations, DGCA oversight, MoCA policies, Cape Town Convention protections, FEMA, and Companies Act compliance into a unified framework. This alignment provides both domestic and foreign lessors with legal certainty, tax efficiency, and international enforceability, making GIFT IFSC a credible and attractive hub for aviation finance in India.

Taxation & Incentives for Aircraft Leasing in GIFT City

One of the strongest reasons global and domestic lessors are choosing aircraft leasing in GIFT City is its unmatched tax efficiency. GIFT IFSC offers a package of direct tax benefits, indirect tax exemptions, and regulatory incentives that lower overall leasing costs, making India competitive with established hubs like Ireland and Singapore.

Direct Tax Benefits

10-year income tax holiday available within a 15-year block for aircraft leasing companies registered in GIFT IFSC.
Lower effective tax rate improves lease profitability and attracts foreign lessors.

Indirect Tax Incentives

GST exemption on aircraft and engine leasing transactions conducted within GIFT City.
Makes leases more cost-effective for Indian airlines, especially compared to offshore structures where GST/VAT is levied.

Other Incentives

No stamp duty on lease agreements, saving significant transaction costs.
Customs duty benefits on import and export of aircraft, engines, and spare parts through GIFT IFSC.
Simplified tax treatment reduces overall compliance burden and accelerates transaction timelines.

Example: Tax Savings on Aircraft Lease

Lease Value	Jurisdiction	Effective Tax/Levy Impact	Net Savings
USD 50M	Ireland	~15–20% (corporate tax + WHT + stamp duty)	–
USD 50M	GIFT IFSC	Near-zero (10-yr tax holiday + GST & stamp duty exemption + reduced WHT)	15–20% of lease value

For a USD 50M lease, setting up in GIFT City can save lessors and airlines up to USD 7.5M–10M compared to offshore hubs.

Setting Up an Aircraft Leasing Company in GIFT IFSC

Establishing an aircraft leasing company in GIFT City is an attractive proposition for global lessors, domestic NBFCs, and aviation-focused investors looking to capture India’s booming aviation market. With a projected requirement of 1,500–2,000 new aircraft by 2040, the demand for leasing solutions is set to rise sharply. GIFT IFSC, backed by IFSCA’s 2022 framework, offers a transparent and globally aligned pathway for setting up both operating lease of aircrafts and finance lease of aircrafts.

Step-by-Step Process to Establish a Leasing Business

1. Choose Entity Structure: Finance Company (FC) or Finance Unit (FU)

Finance Company (FC): A new corporate entity incorporated in GIFT IFSC under the Companies Act, 2013.
Finance Unit (FU): A branch/unit of an existing Indian or foreign entity permitted to operate within IFSC.
The choice depends on the lessor’s market entry strategy—new entrants often prefer FCs, while global lessors expand through FUs.

2. Meet Capitalization Requirements

IFSCA requires minimum net-owned funds (NOF) for entities to ensure stability.
For aircraft lessors, this acts as a safeguard for counterparties like airlines and financiers.
Entities must also submit a clear business plan and risk management framework.

3. Register with IFSCA under the Aircraft Leasing Framework, 2022 as amended from time to time

Submit an application detailing:
- Entity structure and ownership pattern.
- Financials and capitalization proof.
- Governance policies and compliance mechanisms.
IFSCA grants approval after due diligence, enabling the company to begin leasing transactions.

4. Draft Lease Agreements

Agreements must comply with international best practices, including Cape Town Convention standards.
Flexibility to structure:
- Operating leases (short to medium term).
- Finance leases (long-term, asset-based).
- Hybrid models for customized solutions.
Agreements must also align with DGCA safety and regulatory requirements for registration of aircraft in India.

5. Obtain DGCA and MoCA Approvals (if required)

DGCA (Directorate General of Civil Aviation): Ensures compliance with airworthiness, safety certification, and aircraft registry.
MoCA (Ministry of Civil Aviation): Policy alignment and sectoral approvals for large-scale leasing operations.
These approvals, coupled with IFSCA licensing, provide a legally secure environment for lessors.

6. Execute Leasing Transactions

Once approvals are secured, lessors can begin executing contracts with both domestic airlines (IndiGo, Air India, Akasa) and foreign carriers.
Leasing scope includes aircraft, helicopters, engines, and spare parts.
Financing activities such as sale-and-leaseback or structured financing are also permitted.

Comprehensive Checklist for Lessors in GIFT IFSC

Requirement	Purpose	Status Check
Incorporation as FC/FU	Legal recognition of entity in IFSC	✅
Capital Adequacy (NOF)	Ensures financial credibility	✅
IFSCA License	Grants right to conduct leasing activity	✅
DGCA Compliance	Aircraft registry, safety standards	✅
MoCA Policy Alignment	Ensures sector-level policy compliance	✅
Lease Agreements	Structured under operating/finance models	✅
Tax Structuring	Optimize benefits: 10-yr tax holiday, GST & stamp duty exemption	✅
Cape Town Convention Protocols	Protects lessor rights & repossession	✅

Strategic Advantages for Lessors

Fast Track Approvals: Single-window system through IFSCA reduces delays.
Tax Efficiency: Savings of 15–20% on lease value compared to Ireland or Singapore.
Scalable Ecosystem: Over 20 lessors already registered by 2025, creating an emerging cluster.
Market Access: Direct connection to Indian airlines, one of the fastest-growing aviation markets globally.

Long-Term Considerations

Funding Options: Access to international capital markets, banks, and NBFCs through IFSC.
Risk Management: Cape Town Convention ensures enforceability of repossession rights.
Expansion Potential: Units can expand into related areas such as engine leasing, MRO financing, helicopters, and drones.

Aircraft Leasing & Financing in GIFT City IFSCA 5

IFSCA Registration and Licensing Fees

To commence operations, every lessor must obtain a Certificate of Registration under the IFSCA (Finance Company) Regulations 2021 and the Aircraft Leasing Framework 2022.

Application Fee: Typically in the range of INR 50,000–1 lakh, payable to IFSCA at the time of submitting the registration form (Form A).
Registration Fee: Around INR 5 lakh for new applicants, covering evaluation and issuance of the license.
Renewal Fee: Annual or bi-annual renewal charges may apply based on business volume or category (Operating / Finance).
Fees are non-refundable and are part of the regulator’s due-diligence and supervisory cost structure.
IFSCA also requires submission of a business plan, ownership details, and compliance framework along with the fee payment.

SEZ & GIFT City Authority Charges

Since GIFT IFSC is a Special Economic Zone (SEZ), leasing units enjoy substantial benefits but must pay nominal administrative charges to the SEZ Authority:

Plot / Space Allotment Fee: Depending on office size and zone, typically ranges from INR 75–150 per sq. ft per month for furnished office space within GIFT SEZ towers.
One-time Registration with GIFT SEZ Developer: Approximately INR 25,000–50,000, covering space allotment and SEZ permissions.
Annual Maintenance / Utility Fees: Billed by the SEZ developer for common facilities, utilities, and data-connectivity infrastructure.
No Customs Duty / GST: On import or export of aircraft, engines, or parts used for authorized operations within IFSC.

These minimal SEZ-level costs are offset by full tax exemptions, zero GST, and no stamp duty, making GIFT City among the lowest-cost jurisdictions globally for setting up aircraft leasing operations.

Opportunities & Challenges in Aircraft Leasing at GIFT City

The rapid rise of aircraft leasing in GIFT City presents India with a historic opportunity to reshape its aviation finance landscape. While the framework offers strong advantages, certain structural challenges must be addressed to sustain growth and position GIFT IFSC as a global hub.

Opportunities

1. Reduce India’s Dependency on Foreign Leasing Hubs

Currently, over 80% of India’s commercial fleet is leased from hubs like Ireland and Singapore.
By shifting leases to GIFT IFSC, India retains financing profits domestically and reduces exposure to foreign tax regimes.

2. Capture Global Aviation Finance Flows into Asia

With Asia-Pacific projected to account for 40% of new aircraft deliveries by 2040, India is well-placed to channel leasing activity through GIFT City.
This opens access to USD 5–10 billion annually in aviation finance flows.

3. Position GIFT IFSC as Asia’s Dublin for Leasing

Ireland currently manages over 60% of the world’s leased aircraft.
With its tax incentives, regulatory clarity, and strategic location, GIFT City can replicate this success for Asia, creating a regional hub for operating lease of aircrafts and finance lease of aircrafts.

Challenges

1. Need for Deeper Financing Ecosystem

For sustainable growth, GIFT IFSC requires greater participation from banks, NBFCs, and capital markets in aviation finance.
Without deep credit availability, lessors may still prefer offshore funding.

2. Risk Perception Around Repossession Enforcement

Despite India’s adherence to the Cape Town Convention, foreign investors often remain cautious about enforcement timelines in case of default.
Building a strong legal track record will be critical.

3. Scaling Expertise in Aviation Finance Law & Tax

Specialized knowledge in aviation finance, cross-border tax, and structured leasing remains limited in India.
Training professionals and attracting global advisors is essential to compete with established hubs.

Future Outlook for Aviation Finance in GIFT City

Government’s Vision

The Indian government targets 25% of the country’s aircraft leasing to be routed through GIFT IFSC by 2030.

Financial Potential

If achieved, GIFT City could attract USD 5–10 billion annually in aviation financing and generate significant ancillary revenue streams.

Diversification Beyond Aircraft

Future growth is not limited to aircraft leasing:
- Engine leasing and spare parts financing.
- MRO (Maintenance, Repair & Overhaul) financing, reducing reliance on foreign repair hubs.
- Helicopter and drone leasing, supporting urban mobility and logistics.

Expanding Global Collaborations

International lessors, law firms, and financiers are already partnering with GIFT-based units.
Increasing global participation will accelerate knowledge transfer and strengthen India’s aviation finance ecosystem.

GIFT IFSC has the potential to become the preferred hub for aviation finance in Asia, provided it capitalizes on opportunities while addressing systemic challenges. By 2030, India could not only reduce reliance on foreign hubs but also establish itself as a leading global player in aircraft leasing and financing.

Aircraft leasing in GIFT City is transforming India’s aviation finance landscape by offering tax incentives, global-standard regulations, and a robust legal framework that rivals traditional hubs like Ireland and Singapore. With over 30% growth in leasing transactions in 2024, more than 20 registered lessors by 2025, and India’s projected demand of 2,000 aircraft by 2040, GIFT IFSC is well-positioned to become Asia’s Dublin for aviation finance. By enabling both operating leases of aircrafts and finance leases of aircrafts, reducing reliance on foreign jurisdictions, and aligning with international conventions, GIFT City provides airlines, investors, and lessors with a cost-efficient and legally secure platform. Looking ahead, with the government’s target of 25% of India’s leasing through GIFT by 2030 and potential inflows of USD 5–10 billion annually, the IFSC is set to emerge as a global hub for aircraft finance in GIFT City, driving long-term growth across the aviation sector.²

References:

# https://www.airbus.com/sites/g/files/jlcbta136/files/2022-05/FINAL%20-%20Airbus%20IMF%20Press%20Release_Wings%20India%202022.pdf ↩︎
# https://ifsca.gov.in/Document/10_EY-GIFT_tax_benefits_050225.pdf ↩︎

Ship Leasing Business in GIFT City IFSCA – Complete Guide

Posted on October 7, 2025October 7, 2025 by Treelife

Introduction to Ship Leasing in GIFT City

The ship leasing business in GIFT City is emerging as one of India’s most strategic financial opportunities. Positioned within Gujarat International Finance Tec-City (GIFT IFSC), this model allows global and domestic shipping companies in GIFT City to access tax-efficient leasing structures, foreign currency financing, and a unified regulatory environment under the International Financial Services Centres Authority (IFSCA).

Evolution from Aircraft Leasing to Ship Leasing

Aircraft leasing success: In 2020, IFSCA first notified aircraft leasing as a financial product. The model attracted global lessors and gave India a presence in a USD 150+ billion aircraft finance market.
Extension to shipping: Given India’s reliance on maritime trade and high freight outflows, IFSCA extended the framework in 2021–22 to include ship leasing in GIFT City, opening doors for ocean vessels, engines, and related equipment.
This shift positions GIFT as a maritime financing hub, reducing dependence on foreign jurisdictions such as Singapore and Hong Kong.

Why Promote Operating, Finance, and Hybrid Leases at IFSC

Operating Lease of Ships – Short/medium-term flexibility, attractive for companies seeking temporary fleet expansion without ownership.
Finance Lease of Ships – Long-term financing structure where lessee takes economic risk, supporting ship acquisition in India.
Hybrid Lease Models – Tailored solutions combining operating and finance features, useful for project-based deployments (e.g., contracts under 5 years with purchase option).

Ship Financing Business in India and the World

Global Ship Financing Market

The global ship financing market is valued at approximately USD 500 billion annually.
Bank finance dominates this market, often limiting flexibility and increasing exposure to credit cycles.
Leasing solutions — operating, finance, and hybrid are emerging as attractive alternatives due to:
- Lower upfront capital requirement.
- Flexibility in asset usage and disposal.
- Ability to match lease tenure with project contracts.

Chart: Traditional Ship Finance vs Leasing Models

Feature	Bank Finance (Traditional)	Ship Leasing (Operating/Finance/Hybrid)
Capital Requirement	High upfront	Spread over lease tenure
Risk	Bank takes credit risk	Shared between lessor & lessee
Flexibility	Rigid repayment	Adjustable (buy/return option)

India’s Shipping Landscape

India is a critical player in the global shipping industry:

Global ranking: Ranked 17th in shipping volume.
Infrastructure: Coastline of 7,517 km with 12 major and 205 minor ports.
Trade dependency:
- 95% of India’s goods trade by volume and 70% by value is carried via sea transport.
- Reliance on maritime trade makes shipping finance vital for economic resilience.
Freight outflow: Indian companies pay approximately USD 75 billion annually to foreign shipping companies for seaborne freight.
- This highlights a financing gap and opportunity for shipping business in GIFT City to retain value within India.

Table: India’s Maritime Trade at a Glance

Parameter	Data
Global Shipping Rank	17
Coastline	7,517 km
Major Ports	12
Minor Ports	205
Trade by Volume via Sea	~95%
Trade by Value via Sea	~70%
Annual Freight Paid Abroad	~USD 75B

# https://www.pib.gov.in/PressReleasePage.aspx?PRID=2074644

Charter Types in Ship Leasing

Ship leasing in India and globally often operates under charter agreements that define how vessels are provided:

Bareboat Charter (BBC)
- Only the vessel is provided.
- No crew, fuel, or services included.
- Lessee assumes full responsibility for operations and expenses.
- Useful for companies that want control over operations and crew management.
Time/Voyage Charter
- Vessel provided along with crew and services (fuel, maintenance, logistics).
- Lessee pays for usage based on time or specific voyage.
- Reduces operational responsibility for the lessee, making it popular for short-term contracts.

Legal & Regulatory Framework for Ship Leasing in GIFT IFSC

The legal framework for ship leasing in GIFT City is built on the strong foundation of the International Financial Services Centres Authority Act, 2019 (IFSCA Act). This framework ensures global investors, financiers, and shipping companies in GIFT City operate under a clear, tax-efficient, and internationally benchmarked regime.

Key Notifications

MoF Notification No. S.O.5199(E), dated Dec 14, 2021
- Recognized operating lease of ships, including hybrid leases, as a financial product under the IFSCA Act, 2019.
- This step enabled leasing companies in GIFT City to structure both operating lease of ships and finance lease of ships with regulatory backing.
October 2020: Aircraft Leasing Notification
- Aircraft leasing was first notified as a financial product.
- Its strong response created a successful precedent that was later extended to the shipping business in GIFT.

These notifications made ship leasing a legally recognized financial activity, giving lessors the ability to structure leases in foreign currency and under globally acceptable standards.

SAFAL Committee (October 2021)

Committee on Ship Acquisition, Financing and Leasing (SAFAL) was formed to address India’s shipping finance gap.
The committee’s October 2021 report recommended:
- Immediate notification of vessel leasing as a financial product.
- Inclusion of both operating lease of ships and finance lease of ships within IFSC activity scope.
- Allowing hybrid lease models to serve project-specific needs.
Implementation: Acting on SAFAL’s recommendations, IFSCA formally notified ship leasing in GIFT City as a financial product, making India competitive with maritime hubs such as Singapore and Hong Kong.

Governing Regulations

The regulatory backbone for ship leasing in GIFT IFSC comes from the IFSCA (Finance Company) Regulations, 2021 and the Ship Leasing Framework, 2022 as amended from time to time.

IFSCA (Finance Company) Regulations, 2021

Applicable to entities registered as Finance Companies (FCs) or Finance Units (FUs).
Cover registration requirements, prudential norms, governance standards, reporting obligations, and KYC/AML compliance.
Classification of leasing activities:
- Operating Lease of Ships → treated as a permitted non-core activity.
- Finance Lease of Ships (including hybrid structures) → classified as a permitted core activity.

Ship Leasing Framework – May 18, 2022

Introduced a dedicated framework for ship leasing entities.
Mandatory registration of every ship lessor with IFSCA.
Required a separate license for asset management support services, ensuring operational transparency.

Capital Requirements:

Minimum USD 200,000 for an entity engaged in operating lease of ships.
Minimum USD 3 million for entities undertaking finance lease of ships.

Types of Ship Leasing in GIFT IFSC

The ship leasing business in GIFT City offers multiple leasing structures to suit the diverse needs of shipping companies in GIFT City and global maritime operators. The International Financial Services Centres Authority (IFSCA) allows three key models of ship leasing operating lease, finance lease, and hybrid lease each catering to different risk appetites, capital requirements, and business objectives.

Operating Lease of Ships

Definition: A short to medium-term lease where the lessor retains ownership and the vessel is returned at the end of the contract.
Use Case:
- Ideal for companies that require fleet flexibility without long-term commitments.
- Popular among shipping businesses handling seasonal or project-based cargo demand.
Key Advantage: Off-balance sheet treatment for lessees, improving capital efficiency.
Capital Requirement in GIFT IFSC: Minimum USD 200,000 for entities offering operating leases.

Finance Lease of Ships

Definition: A long-term lease where ownership and economic risks transfer to the lessee.
Use Case:
- Suitable for shipping companies that want to acquire vessels through structured financing.
- Helps reduce upfront capex while maintaining long-term operational control.
Key Advantage: Functions almost like a ship purchase with financing, while providing tax and financing benefits of GIFT IFSC.
Capital Requirement in GIFT IFSC: Minimum USD 3 million for finance leasing entities.

Hybrid Lease of Ships

Definition: A blend of operating and finance leases, tailored to unique business needs.
Example: A shipping firm that needs a larger vessel for a project lasting less than 5 years may opt for a hybrid lease with higher initial rentals and an option to purchase the vessel at maturity.
Use Case:
- Companies executing medium-term contracts where standard lease models are inefficient.
- Allows flexibility for both lessee and lessor in risk and reward allocation.
Capital Requirement in GIFT IFSC: Case-specific, generally aligned with finance lease thresholds.

Lease Comparison Table

Parameter	Operating Lease	Finance Lease	Hybrid Lease
Tenure	Short/Medium term	Long-term	Flexible / Project-based
Ownership	Lessor	Lessee (eventually)	Option to purchase at maturity
Risk/Reward	Lessor	Lessee	Shared / Negotiated
Capital Requirement	USD 200,000	USD 3 million	Case-specific (generally ≥ finance lease)

Key Takeaways:

Operating lease of ships in GIFT IFSC = flexibility and low capital requirement.
Finance lease of ships = long-term financing and eventual ownership.
Hybrid lease of ships = custom solutions for project-specific or medium-term needs.
These structures strengthen maritime financing in GIFT City, helping India reduce its reliance on foreign shipping hubs while attracting global shipping companies in GIFT City.

Why GIFT City for Ship Leasing? Key Advantages

Choosing GIFT City for ship leasing provides global and domestic players with unmatched financial and operational advantages. The International Financial Services Centres Authority (IFSCA) has created a framework that combines tax incentives, regulatory ease, and global competitiveness, making it a strong alternative to established hubs such as Singapore, Hong Kong, and Dubai.

Tax Incentives for Ship Leasing in GIFT City

100% profit-linked tax holiday: Available for any 10 consecutive years out of the first 15 years of operations.
No Withholding Tax (WHT): On interest, lease rentals, or royalty payments made to non-residents, provided operations commence within specified timelines.
GST benefits: Leasing transactions structured as supplies by IFSC units to non resident customers / other units within IFSC qualify as zero-rated supply, reducing indirect tax burden.
Stamp duty waiver: The Government of Gujarat has granted a waiver in relation to stamp duty on vessel acquisition and related activities until March 2027.

Table: Snapshot of Tax Incentives in GIFT IFSC

Incentive	Benefit	Timeline / Condition
Profit-linked Tax Holiday	100% deduction for 10 consecutive years	Within first 15 years of operations
WHT Exemption	No WHT on lease rentals, interest, royalties	If commenced before cut-off date
GST	Zero-rated supply on IFSC leasing	Subject to LUT filing
Stamp Duty	Waiver on vessel acquisition	Valid up to March 2027

Regulatory Ease

Single regulatory authority: IFSCA consolidates approvals, eliminating multi-agency overlaps common in domestic shipping finance.
Streamlined compliance: Simplified corporate governance, reporting, and operational processes for shipping companies in GIFT City.

Global Competitiveness

Entities can raise capital in foreign currency, offering flexibility to global lessors and financiers.
Cost-effective structure compared to leasing in Singapore or Hong Kong, enhancing India’s appeal for maritime financing in GIFT City.

Strategic Location

Located in Gujarat, near India’s largest ports, GIFT City acts as a gateway to India’s 7,517 km coastline.
Positioned to serve both domestic shipping needs and international maritime trade routes.

Benchmarking Against Global Hubs

Lower costs of setting up and running leasing operations compared to Singapore, Hong Kong, or Dubai.
Advantageous time zone and regulatory incentives make GIFT IFSC a compelling alternative for ship leasing in GIFT City.

Benefits of a Ship Lessor Registered in GIFT IFSC

Registering as a ship lessor in GIFT City unlocks direct tax, indirect tax, and operational benefits, ensuring long-term profitability and compliance ease.

Income Tax Benefits

100% profit-linked deduction: Available for 10 years within the first 15 years.

MAT/AMT at 9%: Applies to IFSC entities, unless opting for the new corporate tax regime.
No WHT on payments to non-residents: Includes lease rentals, royalties, and interest.
Capital gains benefit: 100% deduction on capital gains from transfer of ships or SPVs in IFSC owning ships to a non resident.

GST Benefits

Zero-rated supply: Supplies by IFSC entities to non-resident customers and units within IFSC is treated as exports; no GST liability if LUT is furnished.
IGST application: Leasing of ships to Domestic Tariff Area (DTA) customers subject to IGST.
Exemption from reverse charge: Imports for authorized operations by IFSC units are exempt from reverse charge under GST.

Other Benefits

Stamp duty waiver: On vessel acquisition up to March 2027.
Corporate governance relaxations:
- Fewer mandatory board meetings.
- Flexibility in subsidiary creation.
- Reduced compliance burden compared to domestic companies.

Setting Up a Ship Leasing Business in GIFT City IFSC: Step-by-Step Guide

Establishing a ship leasing company in GIFT City IFSC is a structured process governed by the IFSCA (Finance Company) Regulations, 2021 and the Ship Leasing Framework, 2022. By following the prescribed steps, both Indian and foreign shipping companies can begin operations efficiently while benefiting from tax and regulatory incentives.

Stage I — Pre-Incorporation

Reserve Entity Name
Secure the desired legal name for the company or LLP that will undertake ship leasing.
Identify Office Space in GIFT City IFSC/SEZ
Finalize physical office premises within GIFT City’s IFSC/SEZ area.
Obtain Provisional Letter of Allotment (PLOA)
Get the PLOA from the GIFT City developer for the designated office space.

Stage II — Entity Incorporation

Incorporate an Entity in GIFT IFSC
Form a company or unit in GIFT IFSC. You can structure it as a:

Finance Company (FC), or
Finance Unit (FU) under IFSCA regulations.

Foreign ownership is permitted, making GIFT IFSC attractive for international lessors.

Obtain Certificate of Incorporation
Receive the formal Certificate of Incorporation (company/LLP).

Stage III — Licensing & Approvals

Apply to Development Commissioner / IFSCA (Administrator)
File the initial application to set up an SEZ Unit (functions now handled by the IFSCA Administrator) through SWIT portal.
Apply for Registration with IFSCA
Submit application on SWIT portal under:

Finance Company Regulations, 2021, and
Ship Leasing Framework, 2022.

Your IFSCA application must include:

Detailed business plan for leasing activities.
Promoters’ fit & proper credentials.
Risk management policies and compliance strategy (AML/KYC).

Obtain SEZ/IFSCA Letter of Approval (LOA)
Receive authorization to operate as a ship leasing unit within GIFT IFSC.
Receive In-Principle Approval from IFSCA
Conditional approval specifying requirements (e.g., minimum capital infusion, operational readiness) to be fulfilled before final registration.

Stage IV — Capital & Fees

Meet IFSCA Minimum Capital Requirements
IFSCA mandates thresholds by lease type:

Lease Type	Minimum Capital Requirement	Activity Classification
Operating Lease of Ships	USD 200,000	Non-core activity
Finance Lease of Ships	USD 3,000,000	Core activity
Hybrid Lease of Ships	Case-specific (≥ USD 3M baseline)	Core activity (blend of operating & finance)

Pay IFSCA and SEZ Fees
After capital compliance, pay applicable charges:

IFSCA fees: Application, registration, and annual charges.
SEZ fees: One-time registration and annual recurring fees.

These payments formalize regulatory compliance and authorize the entity to operate within GIFT IFSC.

Stage V — Final License, Commencement & Ongoing Compliance

Comply with In-Principle Conditions
Fulfill all prerequisites and conditions in the In-Principle approval (capital, policies, readiness).
Obtain Final IFSCA License / Certificate of Registration
IFSCA issues the final approval to officially commence the regulated ship leasing business.
Commence Operations

Your license allows you to:

Undertake operating lease of ships,
Provide finance lease of ships, or
Structure hybrid lease models for project-specific needs.

You can transact with Indian Domestic Tariff Area (DTA) clients as well as international shipping operators.

Post-Setup & Ongoing Compliances
Adhere to continuing IFSCA obligations, including reporting and AML/KYC standards.

setting up a ship leasing business in GIFT City IFSC — Ship Leasing Business in GIFT City IFSCA - Complete Guide 8

Financing Models in Ship Leasing

The success of the ship leasing business in GIFT City depends not just on legal frameworks but also on how shipping companies in GIFT City finance their vessels. Globally, ship financing is dominated by banks, but leasing and alternative capital structures are increasingly important. GIFT IFSC offers access to multiple maritime financing in GIFT City options — from traditional bank loans to innovative hybrid and cross-border solutions.

Bank Finance (Traditional)

Globally, 80%+ of ship financing still comes from banks.
Typically structured as secured loans backed by ship mortgages.
Pros:
- Familiar structure for lenders and borrowers.
- Lower cost of borrowing when credit is strong.
Cons:
- Rigid repayment schedules.
- Exposure to credit cycles and lender concentration risks.
In India, reliance on overseas banks has led to higher costs and dependency, creating demand for alternative leasing models in GIFT City.

Operating Lease Funding

Funding model used for operating lease of ships.
Sources of funds:
- Debt financing (domestic/foreign loans).
- Securitization of lease receivables (pooling leases into tradable securities).
Advantage:
- Enables lessors to recycle capital quickly.
- Lessees benefit from flexibility without ownership risks.
Particularly relevant for short-to-medium term shipping contracts in India.

Finance Lease Funding

Designed for finance lease of ships, where ownership and risk eventually pass to the lessee.
Funding tools include:
- Long-term project financing (structured loans).
- Corporate or infrastructure bonds backed by ship assets.
Advantage:
- Spreads cost of vessel acquisition over long periods.
- Attractive for shipping businesses planning fleet expansion.
In GIFT City, finance leases can be funded in foreign currencies, giving global lessors an edge.

Hybrid Lease Funding

Combines features of both operating and finance lease models.
Structured to support project-based shipping needs (e.g., 3–5 year contracts).
May involve:
- Higher upfront rentals.
- Option-to-purchase clause at maturity.
Benefits both lessors and lessees through shared risk allocation.
Useful for companies with specialized cargo or offshore projects.

Maritime Financing in GIFT City

One of the biggest advantages of setting up in GIFT IFSC is access to global financing markets:

External Commercial Borrowings (ECBs): Companies can borrow in foreign currency at competitive rates.
Foreign Currency Loans: Access to USD, EUR, and other currencies avoids INR depreciation risks.
Syndicated Loans: Participation of multiple global banks spreads risk and lowers cost.
Structured Maritime Finance: Combines debt, leasing, and securitization to support large-scale vessel acquisitions.

Table: Financing Options for Ship Leasing in GIFT City

Financing Model	Instruments Used	Best Suited For
Bank Finance	Ship mortgage-backed loans	Traditional, long-term owners
Operating Lease Funding	Debt + securitization	Flexible short-term charters
Finance Lease Funding	Bonds + project finance	Fleet expansion, long-term use
Hybrid Lease Funding	Custom contracts, purchase options	Project-based shipping
GIFT City Maritime Financing	ECBs, foreign loans, syndications	Global lessors, cross-border trade

Regulatory Fees for Ship Leasing Entities in GIFT IFSC

Establishing a ship leasing business in GIFT City requires payment of specific regulatory fees to the International Financial Services Centres Authority (IFSCA) and the Special Economic Zone (SEZ) authorities. These charges are transparent and globally competitive, making GIFT City an attractive destination for shipping companies in GIFT City.

IFSCA Fees for Ship Leasing Entities

IFSCA charges vary depending on whether the entity is engaged in an operating lease of ships or a finance lease of ships.

Particulars	Operating Lease	Finance Lease
Application Fee (one-time)	USD 1,000	USD 1,000
Registration Fee (one-time)	USD 12,500	USD 12,500
Annual Fee (recurring)	USD 5,000	USD 12,500

Operating lease entities enjoy lower recurring fees, while finance lease entities have higher annual costs due to larger capital requirements and higher-risk structures.

SEZ Fees for Ship Leasing Entities

Apart from IFSCA, SEZ authorities levy their own one-time and recurring charges:

Particulars	Amount (INR)
Application Fee (one-time)	₹5,000
Registration Fee (one-time)	₹25,000
Annual Fee (recurring)	₹5,000

Compared to global shipping hubs, SEZ fees in GIFT City are minimal, ensuring cost competitiveness for both domestic and international lessors.

Market Opportunity: Shipping Business in GIFT City

The shipping business in GIFT City is strategically positioned to capitalize on India’s growing maritime economy and global shipping trends. With strong regulatory support and competitive cost structures, GIFT IFSC can bridge India’s long-standing financing gaps.

India’s Maritime Dependency and Freight Outflow

India pays approximately USD 75 billion annually to foreign shipping companies for seaborne freight.
This massive outflow represents a significant opportunity for ship leasing in GIFT City, where domestic lessors can capture part of this market.

Maritime Economy Significance

95% of India’s trade by volume and 70% by value is carried through sea routes.
With a coastline of 7,517 km, 12 major ports, and 205 minor ports, India’s shipping infrastructure demands financing solutions aligned with global practices.

Global Ship Leasing Market Potential

The global ship leasing market is valued at USD 30–35 billion, and GIFT City is aiming to capture a share of this growing segment.
By positioning itself as a maritime financing hub, GIFT IFSC reduces reliance on traditional shipping hubs like Singapore and Hong Kong.

Ancillary Opportunities in GIFT City

Beyond ship leasing itself, GIFT City provides scope for a complete maritime ecosystem:

Ship management services – operations, maintenance, and compliance.
Marine insurance – specialized risk products tailored for leased vessels.
Crew and logistics services – supporting the operational side of leasing.
Port-linked financing – enabling integrated trade and logistics support.

Table: Opportunity Landscape for Shipping Business in GIFT City

Opportunity Area	Market Insight
Freight Retention	Reduce USD 75B paid abroad annually
Global Leasing	USD 30–35B market ripe for India’s entry
Trade Dependency	95% trade volume by sea
Ancillary Services	Ship management, insurance, crew, ports

# https://ifsca.gov.in/Document/ReportandPublication/ifsca-bulletin-jan-mar-202509052025055132.pdf

The market opportunity for ship leasing in GIFT City is immense. With USD 75 billion in annual freight payments, a USD 30–35 billion global ship leasing market, and India’s heavy reliance on maritime trade, GIFT IFSC is set to become a strategic hub. Combined with low regulatory fees and strong tax incentives, this ecosystem attracts both global and domestic shipping companies in GIFT City, making it a cornerstone of India’s maritime financing future.

Risks and Challenges in Ship Leasing from GIFT City

While the ship leasing business in GIFT City presents strong opportunities, investors and shipping companies in GIFT City must also evaluate key risks. Addressing these challenges is critical for positioning GIFT IFSC as a sustainable maritime financing hub.

Currency Risks (INR vs USD)

Most global ship leasing transactions are denominated in USD or EUR.
Indian lessees earning in INR may face forex volatility, impacting repayment ability.
Hedging solutions are available within GIFT IFSC, but costs may reduce profitability for both lessors and lessees.

Regulatory Maturity Stage

The ship leasing in GIFT City framework is still relatively new (notified in 2021–22).
Regulatory processes, though streamlined under IFSCA, are still evolving.
Investors may face uncertainties until more standardized legal precedents are established.

Global Competition from Maritime Hubs

Established hubs like Singapore, Hong Kong, and Dubai DIFC already dominate global maritime financing.
These hubs benefit from decades of regulatory clarity and market trust.
GIFT City must offer lower costs, tax arbitrage, and faster approvals to remain competitive.

Need for Maritime Arbitration in GIFT

Disputes in ship leasing are often international, requiring specialized maritime arbitration.
Currently, most Indian shipping disputes are referred to Singapore or London arbitration centers.
Building a maritime arbitration hub in GIFT IFSC is essential to enhance credibility and reduce reliance on foreign jurisdictions.

Mitigating currency risks, strengthening regulations, and developing in-house dispute resolution are critical steps for scaling ship leasing in GIFT City globally.

Case Studies & Early Movers in GIFT IFSC

The best way to evaluate GIFT’s potential in ship leasing is by studying precedents and global benchmarks.

Aircraft Leasing Precedent in GIFT

In October 2020, IFSCA first notified aircraft leasing as a financial product.
Within months, major lessors and financiers set up entities in GIFT IFSC.
This success paved the way for ship leasing in GIFT City, proving that India can replicate international leasing models.

First Approvals for Ship Leasing Entities

Following the Ship Leasing Framework (May 2022), the first approvals were granted to ship lessors in GIFT IFSC.
These early movers benefit from:
- Tax holidays (10 years out of 15).
- No WHT on foreign payments.
- Stamp duty waivers until 2027.
Their presence demonstrates market confidence and validates GIFT City as a maritime financing hub.

Singapore’s Maritime Leasing Model vs India’s Framework

Singapore:
- Globally recognized for ship finance and leasing.
- Strong maritime arbitration system, government-backed incentives, and access to global capital.
India (GIFT IFSC):
- Competitive tax incentives (100% profit-linked deductions, GST benefits).
- Lower operating and registration fees compared to Singapore.
- Still developing ecosystem support (e.g., maritime arbitration, ancillary services).

Table: Singapore vs GIFT City – Ship Leasing Framework

Parameter	Singapore	GIFT City (India)
Tax Incentives	Corporate tax concessions	100% profit-linked holiday (10 of 15 years)
Arbitration	Mature maritime arbitration centers	Developing capacity
Fees	Higher regulatory costs	Lower fees (USD 1,000–12,500)
Market Maturity	Established global hub	Emerging but growing

Future Outlook of Ship Leasing in GIFT City

The future of ship leasing in GIFT City is strongly aligned with India’s broader maritime and economic goals. With government backing, regulatory clarity, and rising demand for localized financing, GIFT IFSC is positioned to become a global hub for ship leasing and maritime financing by the end of this decade.

Alignment with Maritime India Vision 2030

Maritime India Vision (MIV) 2030 outlines investments of over USD 82 billion to modernize ports, logistics, and shipping infrastructure.
GIFT City is expected to play a strategic role in supporting these initiatives by:
- Providing finance lease of ships for fleet expansion.
- Offering operating lease of ships for project-specific needs.
- Facilitating hybrid lease structures for specialized maritime contracts.
By integrating financing with infrastructure, GIFT IFSC bridges the gap between India’s shipping demand and global leasing practices.

Projected Growth of Ship Leasing Entities by 2030

With India ranked 17th globally in shipping volume, there is vast scope to expand domestic leasing capacity.
By 2030, experts project:
- Dozens of new ship leasing companies in GIFT City, including global lessors and Indian shipping firms.
- Lease volumes worth billions of USD annually, capturing a share of the USD 30–35 billion global ship leasing market.
Growth will be driven by:
- Rising demand for bulk cargo carriers and container vessels.
- Expansion of India’s port capacity under Sagarmala and MIV 2030.
- Increased use of foreign currency loans and syndicated financing through GIFT IFSC.

Table: Projected Growth Indicators for Ship Leasing in GIFT City (by 2030)

Indicator	2025 (Current)	2030 (Projected)
Ship Leasing Companies in GIFT IFSC	Early-stage approvals	20–30 entities
Lease Volume	<$1B	$8–10B annually
Share of Global Ship Leasing Market	<1%	5–7%
India’s Freight Outflow	$75B annually	Reduction by 10–15%

#https://ifsca.gov.in/Document/ReportandPublication/ifsca-bulletin-jan-mar-202509052025055132.pdf

Government Backing to Reduce Freight Outflow

India pays nearly USD 75 billion annually to foreign shipping companies for freight.
The government’s goal is to retain a significant share of this spending domestically by building capacity at GIFT IFSC.
Policy initiatives supporting this goal include:
- Tax incentives (10-year profit-linked holiday).
- Stamp duty waivers till 2027.
- Regulatory frameworks for operating, finance, and hybrid leases.
By 2030, local leasing platforms at GIFT City could help reduce India’s freight dependency by 10–15%, directly boosting the national economy.

GIFT as an Integrated Hub for Shipping + Financing

GIFT IFSC is not only about leasing ships — it is about building a holistic maritime ecosystem:

Ship Leasing & Financing – Access to global capital markets, ECBs, and foreign currency loans.
Ancillary Services – Marine insurance, ship management, crew services, and port-linked logistics.
Arbitration & Dispute Resolution – Future establishment of maritime arbitration centers in GIFT City to reduce reliance on Singapore or London.
Integration with Ports – As India expands its 12 major and 205 minor ports, GIFT City provides the financing backbone to support growth.

By 2030, ship leasing in GIFT City is projected to grow into a multi-billion-dollar industry, reduce India’s freight outflow, and position the country as a global leader in maritime financing, on par with Singapore and Hong Kong.

Global/Regional Treasury Centre in GIFT City – GTC & RTC

Posted on October 7, 2025October 7, 2025 by Treelife

Introduction: Why GIFT City is Becoming a Treasury Hub

GIFT IFSC – India’s International Financial Hub

The Gujarat International Finance Tec-City (GIFT City) was launched as India’s first International Financial Services Centre (IFSC) to attract global capital and consolidate offshore activities back into India. It operates as a greenfield smart city spread across 886 acres, divided into a Special Economic Zone (SEZ) and Domestic Tariff Area (DTA). The IFSC is regulated by the International Financial Services Centres Authority (IFSCA), which consolidates powers of RBI, SEBI, IRDAI, and PFRDA to provide a single-window unified regulator.

Key highlights of GIFT IFSC include:

930+ entities registered, including global banks, insurers, and capital market players (as of June 2025).
USD 93 billion+ total banking asset size.
Tax benefits: 100% exemption for 10 out of 15 years, no GST on offshore transactions, 10% dividend tax for non-residents.
Global-standard infrastructure: automated cooling and waste systems, underground utility tunnels, walk-to-work ecosystem.

Treasury Centres in GIFT City

Treasury Centres in GIFT City, operating within India’s International Financial Services Centre (IFSC), are specialized financial units, classified as either Global Treasury Centres (GTCs) or Regional Treasury Centres (RTCs) that function as the in-house bank for multinational corporations. Governed by the International Financial Services Centres Authority (IFSCA), their primary purpose is to centralize and manage the financial operations for a corporation’s global or regional group entities, focusing on key activities like multi-currency liquidity and cash management, foreign exchange and interest rate risk hedging, and facilitating intra-group financing.

A Global Treasury Centre (GTC) functions as the “in-house bank” for a multinational group, centralizing worldwide financial management to achieve greater efficiency and control. Its core purpose is to manage global finances, encompassing essential functions such as liquidity and cash pooling across all subsidiaries, comprehensive risk management (covering FX, interest rate, and commodity exposures), intra-group financing, and overall capital allocation and fundraising (including bonds and external borrowings).

A Regional Treasury Centre (RTC), in contrast, acts as the treasury hub for a specific geographic area, such as Asia-Pacific or the Middle East. While a GTC handles global financial flows, an RTC focuses on addressing the cross-border treasury needs of subsidiaries within its defined region. Its functions mirror those of a GTC but on a regional scale: providing liquidity support, FX hedging, and risk management tailored to the regional markets. Essentially, the RTC serves as a crucial intermediary, bridging the gap between local operations and the global headquarters by ensuring that regional treasury functions are aligned with both the group’s overall strategy and the dynamics of local regulations and markets.

Why MNCs are Consolidating Treasury Operations

Global companies increasingly prefer centralized treasury centres for efficiency, compliance, and cost control:

Operational efficiency: Central hubs reduce duplication of treasury functions across countries.
Lower costs: GIFT City offers cost advantages vs hubs like Singapore or Dubai.
Regulatory ease: One unified regulator (IFSCA) simplifies cross-border approvals.
Tax savings: GTC/RTC in GIFT IFSC can benefit from tax neutrality on interest, dividend, and capital gains.
Technology adoption: Treasury Management Systems (TMS), multi-currency pooling, and AI-driven risk analytics enhance real-time cash visibility.

Stat Snapshot – Why Treasury is Centralizing in GIFT City

Factor	GIFT IFSC Advantage
Banking Assets	USD 93 bn+ (June 2025)
Entities Registered	930+ (June 2025)
Tax Incentive	100% exemption (10/15 yrs)
Dividend Tax	10% for non-residents
Regulator	Unified IFSCA

What is a Global Treasury Centre (GTC)?

A Global Treasury Centre (GTC) is the nerve centre of financial operations for multinational corporations (MNCs). It acts as an in-house bank for the group, consolidating financial decision-making, ensuring efficient use of capital, and enabling greater control over risks and liquidity across multiple geographies.

Core Functions of a Global Treasury Centre

A GTC typically undertakes the following critical activities:

Cash & Liquidity Management
- Centralized pooling of cash across global subsidiaries.
- Optimization through notional pooling or physical cash concentration.
- Ensures funds are available where required, reducing idle balances.
Risk Management
- Foreign exchange (FX) hedging to manage currency exposures.
- Interest rate risk mitigation through swaps, futures, and options.
- Commodity price hedging for corporates dealing with raw materials (e.g., oil, metals).
In-House Banking
- Acting as a bank for group entities: providing intercompany loans, deposits, and settlements.
- Enabling netting of intra-group transactions, lowering transaction costs.
- Managing centralized payment and collection systems (“payment factory” model).
Funding and Capital Allocation
- Raising debt or equity globally at competitive rates.
- Allocating capital efficiently across subsidiaries.
- Supporting external borrowings, ECBs, and bond issuances from one hub.

Why Companies Consolidate Treasury at Global Hubs

MNCs prefer to operate global treasury hubs for efficiency, compliance, and cost benefits:

Operational Efficiency
- Eliminates duplication of treasury functions across subsidiaries.
- One centralized platform streamlines approvals and controls.
Lower Costs
- Reduced number of external banking relationships.
- Transaction cost savings via internal netting and pooling.
Regulatory & Compliance Ease
- Global hubs like GIFT City, Singapore, and Dublin offer clear frameworks for treasury activities.
- Easier to comply with OECD’s BEPS rules and global minimum tax requirements when managed from a central hub.
Tax Benefits
- Locations such as GIFT City provide 100% tax exemptions for 10 consecutive years out of 15, tax-neutral interest, and lower dividend tax on payouts to non-residents.
Technology & Real-Time Visibility
- Use of Treasury Management Systems (TMS) for real-time global cash visibility.
- AI/ML tools for predictive analytics in FX and liquidity management.

Global Examples of Treasury Hubs

Several established international hubs showcase the importance of GTCs:

Singapore – Asia’s largest FX trading centre, third globally after London and New York; key hub for MNC treasury operations.
Dublin (Ireland) – Favoured in Europe for tax treaties, access to EU markets, and robust regulatory frameworks.
Hong Kong – Long-standing treasury hub for North Asia with free capital movement and proximity to China.

What is a Regional Treasury Centre (RTC)?

A Regional Treasury Centre (RTC) is a treasury hub that manages financial operations within a defined geographic region for example, Asia-Pacific, the Middle East, or Africa. Unlike a Global Treasury Centre (GTC), which oversees worldwide operations, an RTC focuses on regional subsidiaries, ensuring that local business needs are met while still aligning with the company’s global financial strategy.

RTC vs GTC: Key Differences

Comparing Regional Treasury Centre (RTC) and Global Treasury Centre (GTC)

Feature	Regional Treasury Centre (RTC)	Global Treasury Centre (GTC)
Scope	Limited to a region (e.g., Asia, MEA)	Covers all global subsidiaries
Focus	Regional liquidity, FX risk, local compliance	Global capital allocation, worldwide liquidity & risk
Decision-making	Semi-centralized – aligns with global HQ but adapts to regional needs	Fully centralized – decisions flow from one global hub
Best for	Companies with strong presence in a particular region needing closer oversight	Companies aiming for complete centralization and efficiency

How RTCs Serve Asia, Middle East, and Africa

RTCs are increasingly popular in emerging and frontier markets where business expansion is rapid but regulatory, FX, and banking environments vary by country.

Asia-Pacific (APAC):
- Supports subsidiaries in India, Southeast Asia, and China.
- Provides FX hedging for volatile currencies and ensures liquidity across high-growth but fragmented markets.
Middle East (ME):
- Manages funding and payments for oil & gas, infrastructure, and energy companies.
- Deals with currencies pegged to USD and regional banking regulations.
Africa:
- Helps manage capital repatriation restrictions.
- Ensures availability of funds for operations in multiple currencies (e.g., ZAR, NGN, KES).

GIFT IFSC, strategically located in India, is increasingly positioned as a regional treasury hub for Asia, Middle East, and Africa, offering multi-currency pooling, zero-interest withholding tax, and tax holidays on treasury income.

Role in Bridging Global Operations with Regional Subsidiaries

RTCs play a critical bridge function between headquarters and local entities:

Alignment with global treasury policies while adapting to regional regulations.
Real-time liquidity management for subsidiaries across time zones.
Consolidated reporting for regional entities before submission to global HQ.
Support for local financing (e.g., trade finance, supply chain financing).
Risk monitoring for region-specific exposures (political, currency, and commodity risks).

This layered structure ensures both control at the centre and agility in the region, making RTCs essential for companies with diverse regional operations.

When Do Companies Choose RTC Instead of GTC?

Companies often opt for a Regional Treasury Centre instead of a Global Treasury Centre in the following situations:

Strong regional presence – Businesses with large revenues in Asia or Africa often need localized treasury oversight.
Regulatory barriers – When certain jurisdictions restrict full centralization of treasury, RTCs offer a compliant alternative.
Currency complexity – Emerging markets with volatile or restricted currencies require on-ground management.
Stepping stone to global centralization – Many MNCs start with RTCs before consolidating into a GTC.
Sector-specific needs – Industries like oil & gas, manufacturing, and IT services often use RTCs to optimize working capital in growth-heavy regions.

Why GIFT City for Global/Regional Treasury Centres?

India’s Regulatory Push – Unified Oversight for Treasury Centres

The Government of India, through the Ministry of Finance (MoF), the Reserve Bank of India (RBI), and most importantly the International Financial Services Centres Authority (IFSCA), has actively positioned GIFT IFSC as a preferred hub for Global Treasury Centres (GTCs) and Regional Treasury Centres (RTCs).

IFSCA (Finance Company) Regulations, 2021: First set of rules enabling finance companies/units in GIFT City to perform treasury activities.
GRCTC Framework (June 2021): Allowed Finance Companies and Finance Units to act as GTCs/RTCs, providing intra-group financing, cash pooling, risk management, and capital allocation services.
2023–25 updates: Introduced relaxations on prudential norms, clarity on re-invoicing activities, multi-currency pooling, OTC derivative participation, and acting as a holding company.

This regulatory clarity gives corporates the confidence to centralize treasury in India, similar to how Singapore and Dublin built their ecosystems.

Tax Benefits in GIFT IFSC

GIFT City offers one of the most competitive tax regimes globally for treasury centres:

100% Income Tax Exemption for 10 consecutive years out of 15 for IFSC units.
No GST on services rendered to offshore clients, IFSC/SEZ units.
Interest Income: Tax-exempt when paid to non-residents.
Dividend Distribution: Reduced tax at 10% for non-residents.
Stamp Duty & Capital Gains Relief: Lower transaction costs compared to onshore India.
MAT/AMT: 9% on book profits (waived in case of company opting for concessional tax regime).

Strategic Location – Gateway to Asia, Middle East, and Africa

Time Zone Advantage: Conveniently overlaps with Asia, Middle East, and European working hours.
Regional Coverage: MNCs can use GIFT City as a base for treasury operations spanning APAC, MENA, and Africa.
India’s Growth Story: With GDP at USD 3.94 trillion (FY24) and projected to cross USD 5 trillion by FY28, treasury centres in GIFT City benefit from proximity to one of the world’s fastest-growing economies.
Talent Pool: India’s cost-effective and skilled finance, legal, and technology professionals strengthen GIFT IFSC’s competitiveness vs Singapore and Dubai.

Key Benefits of GTC/RTC in GIFT City vs Other Global Hubs

Factor	GIFT City (India)	Singapore	Dubai	Hong Kong
Tax Regime	100% exemption for 10/15 yrs; 10% dividend tax; interest income exempt	17% corporate tax (effective Jan 2025); no WHT on dividends	0% corporate tax (non-oil sectors), 5% VAT	16.5% corporate tax; no WHT on dividends
FX Regulations	Full convertibility in 15 currencies; INR not permitted	Free capital convertibility	Free capital convertibility	Free capital convertibility
Cost of Operations	Lower office, compliance & workforce costs	High – among world’s costliest cities	Moderate; attractive incentives but rising costs	High – real estate & wage inflation
Capital Markets Access	Direct access to India’s $3.94T economy and growing debt & equity markets	Strong ASEAN market access	Middle East + Africa; limited Asia linkages	Access to China + global FX hub

Why Corporates Prefer GIFT IFSC for Treasury Centres

Regulatory clarity & global-standard compliance under IFSCA.
Highly competitive tax regime driving cost savings.
Proximity to India’s economy and regional trade flows.
Cost arbitrage in workforce and infrastructure vs Singapore & Dubai.
Government vision to make GIFT IFSC the “Global Nerve Centre of Financial Services” by 2047.

Treasury Activities Allowed in GIFT IFSC

The International Financial Services Centre (IFSC) at GIFT City allows multinational corporations to establish Global Treasury Centres (GTCs) and Regional Treasury Centres (RTCs) with a wide spectrum of treasury activities. These are enabled under the IFSCA (Finance Company) Regulations, 2021 and the Framework for Global/Regional Corporate Treasury Centres issued in June 2021. Here are activities what a GRCTC can do.

Centralized Cash Pooling & Liquidity Management

Physical pooling: Sweeping funds from subsidiaries into a central account.
Notional pooling: Virtual consolidation of balances in multiple currencies without physical transfers.
Multi-currency cash pools allowed in GIFT City reduce FX conversion costs and optimize liquidity.
Enables working capital efficiency across Asia, Middle East, and Africa.

FX Risk Hedging & Derivatives

Access to OTC derivatives and exchange-traded contracts.
Permitted instruments: forwards, swaps, options, cross-currency derivatives.
Corporates can hedge currency, interest rate, and commodity price risks.
Regulatory updates (2023–25) allow greater participation in multi-leg derivative contracts.

Investment of Surplus Funds

Surplus funds can be invested in:
- Government securities
- Corporate bonds
- Money market instruments
IFSCA permits foreign currency denominated investments, enabling higher yield vs local markets.
Facilitates global liquidity optimization and better return on idle funds.

Fundraising – Loans, Bonds & ECBs

Treasury centres in GIFT City can raise funds through:
- External Commercial Borrowings (ECBs)
- Bond issuances including green bonds and ESG-linked securities
- Syndicated loans and structured finance
Advantage: Lower withholding tax and easier access to India’s growing debt capital markets.

Intercompany Lending

RTCs and GTCs can provide intra-group loans across jurisdictions.
Supports subsidiaries in managing liquidity gaps without relying on external borrowing.
Loans structured with flexibility on maturity, currency, and interest rates.
Helps reduce overall cost of capital for multinational groups.

In-House Banking Services

Treasury centres act as an “internal bank” for group entities.
Services include:
- Payment factory (centralized payment processing).
- Re-invoicing models to reduce FX exposure.
- Netting services to offset receivables and payables within the group.
Streamlines operations and reduces dependency on multiple external banks.

Functional Structure of GIFT Treasury

Role of Technology in Corporate Treasury Services

Digital Treasury Platforms enable 24/7 global visibility of liquidity and payments.
AI/ML Risk Analytics help forecast FX exposure and liquidity shortages with higher accuracy.
Automation reduces human error in intercompany transactions and derivatives execution.
Blockchain & APIs enable instant settlements and faster reconciliation across multiple jurisdictions.

Integration with India’s Domestic and Cross-Border Capital Flows

GIFT IFSC allows direct access to India’s growing equity, debt, and derivatives markets, providing corporates with funding options not available in other hubs.
Seamless integration with onshore India entities ensures smoother ECB approvals, trade finance, and capital repatriation.
Corporates can manage cross-border flows to Asia, Middle East, and Africa through a single treasury hub in India.

Setting Up a Treasury in GIFT IFSC (GRCTC): Complete Step-by-Step Guide

Thinking of centralizing group cash, FX, and intercompany funding in GIFT City IFSC? Under IFSCA’s framework you can establish a Global/Regional Corporate Treasury Centre (GRCTC) either as an IFSC-incorporated company or as a Finance Unit (branch) of an Indian/overseas parent.

The Compliant Order: Register First, Operate Next

Yes registration comes first. You must secure:

GIFT-SEZ Unit Approval (Letter of Approval, “LOA”)
IFSCA registration as a Finance Company/Finance Unit for GRCTC, filed on the SWIT portal

Only after these are granted should you operationalize banking rails, FX/derivatives, and intercompany transactions.

Step-by-Step Process

Step 1: Define your GRCTC model

Decide legal form: IFSC company or Finance Unit (branch) of the parent
Scope the service recipients (group entities/branches in India and overseas)
Map activity set: FX and derivatives, intercompany funding, re-invoicing, liquidity pools, investments
Draft a concise business plan (use-cases, balance sheet size, risk appetite, systems)

Step 2: Secure space & prepare for SEZ application

Identify office space in GIFT-SEZ (lease/LoI)
Prepare entity KYC, ownership structure, brief project report, and utility requirements
Target outcome: SEZ LOA (this also unlocks the next step with the regulator)

Step 3: File IFSCA application for GRCTC on SWIT

Create account on SWIT (Single Window IT) and fill the GRCTC application
Attach: business plan, ownership/capital details, Service Recipients list, draft policies (governance, risk, AML/CFT/KYC, activity & limits), and org chart
Choose Finance Company (IFSC-incorporated) or Finance Unit (branch of Indian/foreign parent)

Step 4: Meet entry conditions (prepare in parallel)

Owned funds: at least USD 0.2 million (can be maintained at parent level for a branch)
People: plan for 5 on-ground personnel in IFSC including Head of Treasury and Compliance Officer (check if any onboarding relaxations/transition windows apply)
Infrastructure: dealing systems, market access, record-keeping, info-security, and connectivity

Step 5: Respond to queries & obtain registration

Address clarifications from IFSCA swiftly; you may receive a provisional nod before the final Certificate of Registration
Keep your Service Recipients list current; you may be asked to provide updates

Step 6: Operationalize banking & currency rails

Open operating accounts with IFSC banks/IFSC branches in permitted foreign currencies
For India-side transactions outside IFSC, open a Special Non-Resident Rupee (SNRR) account with an AD Category-I bank in India
Integrate treasury systems for trade capture, confirmations, settlements, and reporting

Step 7: Finalize policies, limits & controls

Get Board-approved policies: Corporate Governance, Risk Management, Activity/Dealing Limits, AML/CFT/KYC, Outsourcing, BCP/DR
Set up three lines of defence (front office, risk/compliance, internal audit) and reporting lines to the Board/Committee
Put in place counterparty limits, VaR/sensitivity checks (as relevant), and MIS for daily/weekly reporting

Step 8: Go-live & ongoing obligations

Commence operations within 6 months of the Certificate of Registration (apply for extension with reasons if needed)
Maintain minimum capital, on-ground staffing, robust records, and timely regulatory returns
Keep your Service Recipients and activity set aligned with the registration; seek approvals for any material changes

Practical Timeline (indicative)

Weeks 1–3 (Pre-filing): model, entity/branch decision, office space, draft policies, staffing plan
Weeks 4–10 (SEZ + IFSCA filing): obtain SEZ LOA; submit IFSCA GRCTC application on SWIT; handle clarifications
Weeks 8–14 (Operationalization): finalize policies, hire/second staff, open IFSC accounts & SNRR, test systems and controls
Go-Live (by Month 3–4) depending on completeness and responsiveness

Key Advantages of Setting up a Treasury Centre in GIFT City

Regulatory Clarity under IFSCA

Unified regulator (IFSCA) consolidates powers of RBI, SEBI, IRDAI, and PFRDA.
Simplified compliance framework compared to multiple regulators in onshore India.

Tax Neutrality & Exemptions

100% income tax exemption for 10 consecutive years out of 15.
No GST on services provided to offshore clients or other IFSC units.
Interest income tax-free, dividends taxed at 10% for non-residents.

Cost Arbitrage vs Singapore & Dubai

30–40% lower operating costs (real estate, compliance, and workforce).
Access to world-class infrastructure with lower set-up costs compared to Hong Kong and Singapore.

Talent Availability – Skilled Finance & Treasury Professionals

India produces over 2.5 million commerce and finance graduates annually, ensuring a robust talent pipeline.
GIFT IFSC attracts chartered accountants, CFA charterholders, and risk professionals at costs lower than global hubs.

Proximity to Indian Markets – USD 5 Trillion Economy by 2030

India’s GDP projected to cross USD 5 trillion by FY30, making it one of the largest demand centres for global corporates.
GIFT IFSC treasury hubs provide direct access to this growth story while also serving Asia, Middle East, and Africa.

Industry Use Cases & Case Studies

The adoption of Global Treasury Centres (GTCs) in GIFT IFSC and Regional Treasury Centres (RTCs) in GIFT IFSC is gaining momentum across industries. Multinational corporations (MNCs) are recognizing the regulatory clarity, tax benefits, and cost advantages of setting up treasury hubs in India. Below are sector-specific use cases and case studies that demonstrate how different industries leverage corporate treasury services in GIFT City.

IT & ITES – Leveraging GIFT IFSC for Global Cash Flow Efficiency

India’s IT and IT-enabled services (ITES) sector contributes ~7.5% of GDP and generates over USD 250 billion in annual revenues (FY24), much of which comes from exports. This sector faces challenges in multi-currency inflows, FX volatility, and working capital deployment.

Use Case:

Centralized treasury at GIFT IFSC manages multi-currency cash pooling from clients across the US, EU, and Asia.
FX hedging through permitted derivatives mitigates risks from USD/INR volatility.
Idle cash is deployed into foreign currency bonds and money market instruments, optimizing returns.

Example: Large IT service providers are exploring RTCs in GIFT City to consolidate export receivables and fund overseas subsidiaries, reducing reliance on multiple offshore hubs like Singapore and Dublin.

Pharma & Life Sciences – Managing Global Supply Chains

India is the world’s third-largest producer of pharmaceuticals by volume, exporting to 200+ countries. Pharma companies deal with complex supply chains, regulatory approvals, and high R&D investments, making treasury centralization critical.

Use Case:

In-house banking from GIFT IFSC supports intercompany loans for subsidiaries managing R&D and global distribution.
Treasury hubs issue External Commercial Borrowings (ECBs) to finance expansion into regulated markets like the US and EU.
Risk analytics platforms in GIFT City help forecast commodity and FX exposure for active pharmaceutical ingredients (APIs).

Example: Mid-to-large Indian pharma players are actively evaluating GIFT IFSC as an alternative to their current Singapore treasury setups, driven by 10-year tax holidays and reduced dividend withholding tax at 10%

Manufacturing & Industrial – Financing Global Expansion

India’s manufacturing sector, supported by the Make in India initiative, is expected to reach USD 1 trillion by 2030. Global manufacturing firms operating in India face challenges in capital allocation, raw material price hedging, and cross-border liquidity.

Use Case:

GTCs in GIFT City act as “funding hubs”, raising capital through bond issuances and syndicated loans.
Commodity hedging via derivatives protects against volatility in steel, crude oil, and metals.
Centralized payment factories streamline vendor and supplier payments across multiple jurisdictions.

Example: A large multinational automotive group is assessing GIFT City for its regional treasury centre for South Asia, aiming to reduce treasury costs by 30–40% compared to Singapore, while gaining direct access to India’s fast-growing debt and equity markets.

Industry-Wise Benefits of GTC/RTC in GIFT IFSC

Industry	Treasury Need	GIFT City Advantage
IT/ITES	FX risk, idle cash deployment, export receivables	Multi-currency pooling, AI-driven risk analytics, tax-free surplus investments
Pharma	R&D funding, API supply chain risks, ECB financing	In-house banking, derivative access, 100% tax holiday on treasury income
Manufacturing	Capital allocation, commodity hedging, supplier payments	Bond/ECB fundraising, centralized payments, lower costs vs Singapore/Dubai

Challenges & Considerations for GTC/RTC in GIFT City

While GIFT IFSC offers unmatched benefits for setting up a Global Treasury Centre (GTC) or Regional Treasury Centre (RTC), corporates must also evaluate the practical challenges before transitioning operations.

Need for Operational Readiness

Companies require robust governance structures to centralize treasury activities without disrupting local operations.
Standardization of intercompany loan agreements, treasury policies, and reporting formats is essential.
A phased migration strategy helps avoid compliance risks and liquidity mismatches during setup.

Regulatory Compliance (FEMA, Companies Act, IFSCA)

FEMA (Foreign Exchange Management Act): Treasury centres must align intra-group loans and FX transactions with FEMA guidelines.
Companies Act, 2013: Reporting obligations such as board approvals, filings, and related-party disclosures remain relevant for Indian subsidiaries.
IFSCA Regulations: While GIFT IFSC provides liberalized norms, entities must comply with prudential exposure limits, derivative guidelines, and disclosure requirements.
Global corporates must also ensure compliance with OECD BEPS and global minimum tax frameworks, which affect treasury structuring.

Technology Infrastructure

A successful GTC/RTC depends on Treasury Management Systems (TMS) integrated with global ERPs.
Key requirements include:
- Real-time visibility of global cash balances.
- Automated FX and derivatives execution.
- Blockchain/APIs for faster reconciliation.
MNCs must invest in cybersecurity protocols as treasury hubs are high-value targets for cyberattacks.

Skilled Manpower Training

While India offers a large pool of finance professionals, specialized treasury skillsets (cash pooling, derivatives pricing, global compliance) are still developing.
Corporates setting up GTC/RTC in GIFT IFSC should:
- Invest in treasury certification programs (ACT, CFA, FRM).
- Upskill employees in AI/ML-driven risk analytics.
- Build teams capable of 24/7 liquidity monitoring across time zones.

Future of GTC & RTC in GIFT IFSC

India as an Alternative to Singapore & Dubai

With lower operating costs and tax-neutral structures, GIFT City is emerging as a cost-effective alternative to established hubs like Singapore and Dubai.
By 2025, India aims to position GIFT IFSC as the preferred treasury centre for Asia, Middle East, and Africa, capitalizing on India’s trade linkages with these regions.

IFSCA Roadmap for 2030 – Treasury Flow Growth

IFSCA projects treasury flows of USD 50+ billion by 2030 through GTCs and RTCs in GIFT IFSC.
Key growth drivers:
- Expansion of multi-currency cash pooling.
- Increased bond issuances and ECBs.
- Adoption of green and ESG-linked financing.

Role in India’s Financial Globalization Strategy

GIFT IFSC supports India’s vision of becoming a global financial powerhouse by 2047.
By encouraging treasury centralization, GIFT City:
- Attracts foreign MNCs to manage Asia operations from India.
- Strengthens capital market depth through bond/FX activity.
- Enhances India’s role in cross-border trade and financial flows.
With 580+ entities already registered and banking assets exceeding USD 52 billion (Dec 2023), treasury centres are expected to be a key pillar of India’s global financial integration.

GIFT IFSC is rapidly transforming into a preferred hub for Global and Regional Treasury Centres (GTCs & RTCs) by offering a powerful combination of regulatory clarity under IFSCA, competitive tax incentives, world-class infrastructure, and cost advantages over hubs like Singapore and Dubai. With treasury activities such as cash pooling, FX hedging, in-house banking, intercompany lending, and bond issuances now permitted, MNCs across IT/ITES, pharma, and manufacturing are leveraging GIFT City for operational efficiency and cross-border liquidity management. Backed by India’s projected USD 5 trillion economy by 2030 and IFSCA’s roadmap targeting USD 50+ billion in treasury flows by 2030, GIFT City is positioning itself as a cornerstone of India’s financial globalization strategy, enabling corporates to centralize treasury operations while unlocking new opportunities across Asia, the Middle East, and Africa.

Setting Up a Company or Business in GIFT CITY – Registration, Process, Eligibility

Posted on October 7, 2025October 7, 2025 by Treelife

Introduction to GIFT City: A Global Business Hub

In the era of globalization, the need for a well-structured, business-friendly environment has never been more crucial. Positioned strategically in Gujarat, India, the Gujarat International Finance Tec-City (GIFT City) stands as a prime example of a global business hub. Since its inception in 2015, GIFT City has been developed to cater to the needs of both domestic and international businesses. This remarkable project serves as a gateway to opportunities in finance, technology, and global trade, offering an ideal environment for companies to set up operations and capitalize on India’s growing financial markets.

What is GIFT City?

GIFT City, formally known as Gujarat International Finance Tec-City, represents a monumental step towards creating a world-class financial and IT services hub in India. Designed as a “Smart City,” it provides state-of-the-art infrastructure and regulatory regimes tailored to boost the competitiveness and efficiency of businesses. As the first International Financial Services Centre (IFSC) in India, GIFT City is built to cater to global financial needs while offering attractive incentives for business setup.

GIFT City’s Strategic Importance for Businesses

The strategic location of GIFT City enhances its potential as a global business destination. Positioned to serve the growing demands of India’s financial services sector on a global scale, GIFT City offers a unique blend of cutting-edge technology, world-class facilities, and a business-friendly regulatory framework. Its multi-services Special Economic Zone (SEZ) status further bolsters its appeal by providing a range of fiscal incentives. These include tax exemptions and favorable regulations that make GIFT City an attractive hub for financial services, IT, and IT-enabled Services (ITeS) companies.

GIFT City’s Rising Global Significance

Ranked 46th among financial centers in Asia as per the 2025 Global Financial Centres Index, GIFT City has made remarkable strides in just a decade. It has leapfrogged Mumbai as the prime financial center in India, showcasing a rapid rise from its humble beginnings. The city gained 15 spots from the previous year, highlighting its growing influence in the global financial landscape. The 2020 report by the Global Financial Centres Index had already indicated GIFT City’s potential to become a major player in the coming years, and it is now on track to cement its position as one of the top emerging financial centers worldwide.

GIFT City Special Economic Zone (SEZ) and International Financial Services Centre (IFSC)

The Dual Structure of GIFT City: SEZ and DTA

The Gujarat International Finance Tec-City (GIFT City) operates as a premier International Financial Services Centre (IFSC) in India. Its operational area is strategically partitioned into two distinct zones: the Special Economic Zone (SEZ) and the Domestic Tariff Area (DTA). This bifurcation is crucial for understanding the differing regulatory and economic frameworks within the city. The SEZ component is specifically designed to function as an offshore financial hub, facilitating global transactions.

GIFT SEZ: A Hub for Export-Oriented Financial Activities

The GIFT SEZ is a dedicated, geographically demarcated area within GIFT City established with the core objective of promoting export-oriented economic activities, particularly within the finance, technology, and allied service sectors. This zone provides a world-class physical and regulatory infrastructure to attract international business operations.

Key Operational and Financial Advantages in the GIFT SEZ

Global Client Focus and Foreign Currency Transactions: Entities operating within the GIFT SEZ are mandated to conduct business exclusively in foreign currencies. Their primary focus is catering to global clients and facilitating international financial transactions. This setup is strategically designed to attract financial flows and activities that are currently undertaken by international institutions outside of India, effectively onshoring them.
Significant Tax and Regulatory Incentives: Businesses situated in the GIFT SEZ benefit from a package of substantial tax benefits and regulatory concessions. These incentives are a major draw for global financial institutions, making the SEZ a highly competitive location. The comprehensive ecosystem in GIFT City is specifically tailored to promote business activities and offer compelling incentives related to capital, taxation, and ease of doing business.

Types of Legal Entities for Setting Up in GIFT City

GIFT City offers various legal structures for businesses to establish their presence in India’s premier financial hub. These structures are designed to provide flexibility and align with global regulatory standards. Key options include:

Private Limited Company: A popular choice for both domestic and foreign investors, offering limited liability protection and the ability to raise capital through equity. To set up a company in GIFT City, it must meet the minimum capital requirement and comply with Indian corporate laws.
Limited Liability Partnership (LLP): Ideal for smaller businesses and partnerships, LLPs provide flexibility in management and offer limited liability protection, making it an attractive option for professional services firms and startups.
Branch Office: Foreign companies can establish a branch office in GIFT City to conduct business in India. This allows them to leverage GIFT City’s regulatory advantages while maintaining a direct link to their parent entity.
Subsidiary: A wholly owned subsidiary can be set up by foreign entities, providing them with full control over operations in India. This structure allows for compliance with local laws while maintaining corporate governance standards aligned with the parent company.
Foreign Company Representative Office: For foreign entities wanting to establish a liaison in GIFT City without engaging in direct commercial operations, a representative office provides an option to handle marketing and customer support activities.

Each legal structure is designed to meet specific business needs and regulatory requirements, making GIFT City an ideal destination for businesses looking to expand their footprint in India’s financial services sector.

Eligibility Criteria for Setting Up a Business in GIFT City

Understanding who can set up a business in GIFT City and the specific compliance requirements is essential for domestic and international entities looking to establish operations in this jurisdiction. Here’s a detailed look at the eligibility criteria :

Types of Business Sectors Eligible to Start a Business in GIFT City

Banking

GIFT City facilitates the establishment of both Indian and foreign banks through IFSC Banking Units (IBUs). Some key areas under banking include:

Indian and Foreign Banks
Retail Banking for Non-Residents
Treasury Operations & Structured Deposits
Custodian and Escrow Services
Transaction Banking (Cross-border)
Wealth Management Platforms

Insurance

Both Indian and foreign insurers, as well as intermediaries, can set up their businesses in GIFT City. Key players include:

Indian Insurers & Reinsurers
Foreign Insurers & Reinsurers
Insurance Intermediaries (e.g., brokers, agents, web aggregators)
IFSC Insurance Offices for NRIs (covering life, health, ULIPs, travel, and student insurance)

Capital Market Entities

GIFT City is a hotspot for capital market-related activities, hosting a variety of entities such as:

Stock and Commodity Exchanges
Depositories and Custodians
Brokers and Dealer-Brokers
Clearing Corporations
Registrar & Share Transfer Agents
Credit Rating Agencies
Market Infrastructure Institutions (MIIs)

Asset & Fund Management

Businesses involved in fund management and investment activities can benefit from GIFT City’s favorable infrastructure. Permitted entities include:

Alternate Investment Funds (AIFs)
Venture Capital Funds
Private Equity & Structured Products
Portfolio Management Services (PMS)
Family Investment Funds / Family Offices
Fund Management Entities (FMEs)

Leasing Services

GIFT City is an ideal location for businesses focused on leasing operations, such as:

Aircraft Leasing and Financing
Ship Leasing and Marine Finance
Core Financing Companies

Payment Services & Fintech

Payment services and fintech businesses are also eligible to set up shop, with activities such as:

E-money Issuance and Account Issuance Services
Payment Aggregators & Gateways
Cross-border Remittance Providers
Escrow and Merchant Services
FinTech Innovation Entities under Regulatory Sandbox
International Trade Finance Services (ITFS)

Allied & Support Services

A variety of allied services can be established in GIFT City, such as:

Global In-house Centres (GICs) and Treasury Centres
Accounting, Audit & Legal Consultancy Services
Compliance Advisory & Corporate Secretarial Firms
HR & Talent Management Services
Research & Development Services
Educational & Capacity Building Institutions
Specialized Trade & Investment Services

Sustainable Finance and ESG Initiatives

With a growing focus on sustainability, GIFT City is home to initiatives related to green and climate finance, including:

ESG-labelled Debt Securities
Sustainable Finance Products
Sustainability-linked Loans and Bonds

Educational & Capacity Building

Foreign Universities & Institutions (under IFSCA Edu Guidelines)
FinTech and Compliance Training Centres

These businesses benefit from GIFT City’s modern infrastructure, regulatory incentives, and status as an SEZ, making it a strategic location for both financial services and global trade operations.

Criteria for International and Domestic Companies

Both international and domestic companies must meet specific criteria to operate in GIFT City, focusing on compliance, operational readiness, and financial stability.

Regulatory Compliance:
- Companies must comply with the regulations set by the International Financial Services Centres Authority (IFSCA).
- Adherence to the Special Economic Zone (SEZ) rules and regulations is mandatory.
Operational Compliance:
- Entities are required to maintain specific net worth, financial ratios and meet capital adequacy requirements as per IFSCA guidelines.
- Regular reporting and disclosure to IFSCA are required to ensure transparency and compliance with financial regulations.
Financial and Operational Readiness:
- Entities must demonstrate the capacity for sustainable operations, which includes having a sound financial base and a robust business plan.
- Must have the organizational structure in place to commence operations immediately upon setup.
Specific Compliances for Banking and Insurance Sectors:
- Banking units must adhere to norms related to exposure ceilings, reserve requirements, and prudential norms as specified by IFSCA.
- Insurance entities must comply with IFSCA guidelines, focusing on solvency margins and operational mandates.

Step-by-Step Registration Process for Setting Up a Business in GIFT City

Setting up a business in GIFT City (Gujarat International Finance Tec-City) offers several regulatory and infrastructural advantages, especially for businesses engaged in financial services, technology, and related sectors. The process for establishing a business in GIFT City is systematic and requires careful attention to legal, regulatory, and compliance-related steps.

Below is a detailed, step-by-step guide for GIFT City Registration and setup process:

Step 1: Identifying Office Space

Choosing an office space within GIFT City is one of the first crucial steps in the setup process. This space will serve as the operational base for your business and needs to comply with the GIFT City’s regulations.

How to Choose the Right Office Space:

Evaluate factors such as proximity to transport links, the nature of your business, infrastructure compatibility, and possibilities for future expansion.
GIFT City offers tailored zones designed to accommodate various business types, which can significantly improve logistical operations.

Legal Agreements with Developers:

Upon identifying a suitable location, negotiate lease terms or purchase agreements with developers. Consider important legal clauses regarding lease duration, renewal terms, and any SEZ-specific provisions in your agreement.

Provisional Letter of Allotment (PLOA):

Once terms are agreed upon, apply for a Provisional Letter of Allotment (PLOA) from the developer. This document serves as confirmation of the office space allocation and is necessary for progressing to subsequent steps.

Step 2: Company Structure and Registration

The next critical step is determining the legal entity structure of your business. GIFT City permits various business structures depending on the nature of services you intend to provide, such as:

Private Limited Company
Limited Liability Partnership (LLP)

This choice will dictate the required registration procedures and legal documents for your business.

Legal Documents to Prepare:

Charter Documents: These include the Memorandum of Association (MOA) and Articles of Association (AOA), which define the company’s activities and shareholder rights.
GST Registration, Income Tax Registration, Labor Laws Compliance: Depending on the business structure and scope of operations, other mandatory registrations may be required.

Step 3: Submit Application via SWIT Portal

GIFT City uses the SWIT (Single Window IT System) portal for streamlined submission of your application for both SEZ Unit Approval and IFSCA Authorization. This integrated approach eliminates the need for submitting separate applications to the SEZ Development Commissioner and IFSCA.

Required Documents:

Provisional Letter of Allotment (PLOA)
Detailed Business Plan or Project Report: This includes your financial projections, scope of activities, and other pertinent details.
Certificate of Incorporation, PAN, MOA, AOA
Board Resolution Authorizing Signatory
Financial Statements (Audited)
Identity and Address Proof of Promoters/Directors
Application Fees

Application Covers:

SEZ Unit Approval
IFSCA Authorization (for regulated financial services)

Step 4: Unit Approval and Regulatory Review

After the application is submitted, your business will undergo a review by the Unit Approval Committee (UAC). Prepare to present your business model and operations plan, showcasing how it aligns with GIFT City’s goals for economic development.

Letter of Permission (LOA):

If the UAC is satisfied with the application, the IFSCA (Administrator) will issue a Letter of Permission (LOA), granting formal authorization to commence operations.

Step 5: Lease Agreement and Legal Formalities

Once the LOA is issued, it’s time to complete the legal formalities to secure your operational status within GIFT City.

Key Formalities:

Lease Deed Execution: Finalize the lease agreement with the co-developer, ensuring all terms are aligned with GIFT City’s regulations. This deed must be submitted to the Development Commissioner within six months of receiving the LOA.
SEZ License & NSDL Portal Registration: Obtain the SEZ license, and register on the NSDL portal to facilitate import/export reporting and compliance.

Step 6: Compliance and Legal Undertakings

Ensuring compliance with all legal obligations is essential for a smooth setup process.

Bond Cum Legal Undertaking:

Prepare and sign a Bond Cum Legal Undertaking with the Development Commissioner and the IFSCA to ensure compliance with the terms of operation.

Tax Exemption and Registration Certificates:

Apply for various necessary registration certificates, such as GST, IEC, and RCMC. Additionally, businesses can apply for eligibility certificates to avail of tax exemptions from the central and state governments.

Step 7: Approval from IFSCA and Commencement of Operations

The final stage involves receiving approval from the International Financial Services Centres Authority (IFSCA) and officially commencing business operations.

Final Registration with IFSCA:

Submit all required documents and application fees to IFSCA. Once reviewed, the Certificate of Registration will be issued, officially granting your business the status of an operating entity within GIFT City.

Commencement of Business Operations:

Notify the Office of Development Commissioner of your business’s commencement. Provide evidence such as a tax invoice to confirm the first export of services, signaling the start of your operations within GIFT City.

Step 8: Final Documentation and Records

Letter of Acceptance: After receiving the LOA, the business must provide a Letter of Acceptance, confirming agreement to the terms and conditions laid out by the authorities.
Final Registration Certificates: Ensure that all necessary registrations, including GST, are completed, and the business is ready to operate under the regulatory framework of GIFT City.

By following these detailed steps, businesses can navigate the registration process in GIFT City with ease, ensuring compliance with all legal and regulatory requirements while benefiting from the advantageous tax and infrastructural benefits offered by the city.

Note: To begin the process of PSP registration, you must first apply for IFSCA (International Financial Services Centres Authority) registration. Once that is secured, the next step is to obtain the PLOA (Permission Letter of Approval), which is a key document in the regulatory framework. Following this, you will need to incorporate your entity as per the guidelines set by the relevant authorities. After the incorporation is complete, SEZ (Special Economic Zone) approval must be obtained to operate within the designated zone. These steps are then followed by similar processes for other regulatory approvals and compliances, ensuring that your entity is fully aligned with the legal and financial requirements for PSP registration in India.

We help businesses setup in GIFT IFSC Let’s Talk

Commencing Business Operations in GIFT City

Steps to Commence Business After Registration:

Operational Setup: Once your company is registered, the next step is to establish your office in GIFT City. This involves setting up the necessary infrastructure such as IT systems and office equipment to ensure your business operations can begin smoothly.
Staffing: Recruiting a skilled workforce is essential. GIFT City offers access to a vast talent pool, thanks to its strategic location and emphasis on financial and tech industries. Ensuring that your team is well-versed in compliance and operational procedures specific to GIFT City will be crucial.
Obtain GIFT SEZ ID Cards: File an application with the Customs office for issuance of ID Cards for your employees which is a mandatory requirement for entering the SEZ area.
Final Compliance Checks: Before you start operating, it’s important to complete all compliance checks. This includes obtaining final approvals from GIFT City authorities and ensuring all legal and regulatory guidelines are met.

Mandatory Reporting and Operational Compliance:

Regular Reporting: Businesses must adhere to strict reporting guidelines, which include submitting regular financial, operational, and compliance reports to both GIFT City authorities and the International Financial Services Centres Authority (IFSCA).
Compliance with SEZ Regulations: Continuously monitor and comply with the regulations specific to Special Economic Zones (SEZs), which cover aspects like customs, tax, and labor laws.
Environmental and Safety Standards: Maintaining high standards of safety and environmental compliance is crucial. GIFT City promotes sustainability and expects all businesses to adhere to these principles to ensure a safe and sustainable working environment.

Regulatory Framework for Financial Market Intermediaries in GIFT City

GIFT City operates under the International Financial Services Centres Authority (IFSCA), the primary regulator for financial services in India. The IFSCA’s framework ensures a transparent and efficient environment for financial market intermediaries, covering essential sectors such as banking, insurance, funds, and capital markets.

Key regulatory requirements include:

Stockbrokers & Clearing Members: Must register with IFSCA and meet capital adequacy, operational, and KYC norms. They are required to maintain a minimum net worth and adhere to compliance guidelines for client due diligence and transaction reporting.
Custodians: Must have a minimum net worth of $7 million for Indian entities and comply with financial segregation standards. Operational requirements include periodic audits and safeguards to ensure the protection of client assets.
Fund Management Entities (FMEs): FMEs are required to register with IFSCA, with specific net worth requirements ranging from $75,000 for venture capital funds to $1 million for retail investment funds. These entities must comply with guidelines on investor eligibility, reporting standards, and operational transparency.
Foreign Banks & Financial Entities: Foreign financial entities setting up in GIFT IFSC must ensure compliance with IFSCA regulations and their home country’s regulations. This includes meeting capital requirements, adopting anti-money laundering practices, and providing transparency in foreign exchange transactions.

The IFSCA’s unified framework reduces regulatory overlap, making GIFT IFSC an attractive destination for global financial market intermediaries, with a clear focus on compliance, investor protection, and operational efficiency.

Prominent Institutions Doing Business in GIFT City

GIFT City is home to numerous prominent global financial institutions and regulatory bodies, solidifying its position as India’s premier financial hub. Key players operating in GIFT include:

International Banks: GIFT City hosts top global financial institutions such as MUFG Bank, BNP Paribas, HSBC, Citi Bank, and JP Morgan, offering a range of banking services, including corporate banking, trade finance, and foreign exchange transactions.
Fund Management Entities (FMEs): Over 150 FMEs, including Private Equity, Venture Capital, and Hedge Funds, are registered in GIFT IFSC, contributing to India’s growing investment landscape. These entities manage substantial capital and offer unique opportunities for investors both domestically and internationally.
Insurance Companies: Leading insurers such as ICICI Lombard and SBI Life Insurance are operating in GIFT City, offering both life and non-life insurance products tailored for global and Indian clients.
Exchanges: GIFT City is home to two major exchanges, India INX and NSE IFSC, offering trading in equities, commodities, and currency derivatives. These exchanges have a growing monthly turnover of over $67 billion, fostering a robust capital market environment.
Fintech Innovators: GIFT City also attracts fintech startups and established firms, providing them with a conducive environment for innovation in blockchain, AI, and other technologies that are transforming financial services.

These institutions leverage GIFT City’s strategic location, world-class infrastructure, and favorable regulatory environment to provide a competitive edge in the global financial market.

Sector-Specific Opportunities in GIFT City

Setting up a company in gift city offers unparalleled opportunities across various sectors, fostering an ecosystem that attracts global businesses. Key sectors benefiting from GIFT City’s favorable regulatory and tax frameworks include:

Banking: GIFT City provides a robust platform for setting up IFSC Banking Units (IBUs), offering foreign currency transactions, trade finance, and capital raising. Banks benefit from a tax holiday of 10 years, exemption from CRR and SLR, and a lower MAT rate of 9%.
Insurance & Reinsurance: Foreign and Indian insurers can set up in GIFT IFSC under flexible regulations. The city offers tax exemptions, including no GST on services, and relaxed capital requirements for insurance and reinsurance entities, positioning GIFT City as a growing hub for the insurance sector.
Funds & Asset Management: With over 150 registered Fund Management Entities (FMEs), GIFT City serves as a prime destination for Private Equity, Venture Capital, and Hedge Funds. The sector enjoys favorable taxation, including capital gains exemptions and access to a growing base of accredited investors.
Fintech: The fintech sector in GIFT City benefits from regulatory innovation, offering a conducive environment for blockchain, AI, and cryptocurrency ventures. The IFSCA’s framework provides flexibility in regulatory compliance, making GIFT City a hotspot for global fintech companies.
Aircraft & Ship Leasing: GIFT IFSC enables the setup of leasing units for aircraft and ship leasing, with tax exemptions and an enabling framework for cross-border transactions, catering to global clients in aviation and maritime industries.
Capital Markets: GIFT City is home to the India INX and NSE IFSC, offering trading in equities, commodities, and currency derivatives. The exchanges benefit from no Securities Transaction Tax (STT) or Commodity Transaction Tax (CTT), attracting global investors.

These sector-specific opportunities, backed by world-class infrastructure, a unified regulatory framework, and tax incentives, make GIFT City an ideal destination for setting up businesses or companies.

Eligibility Criteria for Foreign Entities Setting Up in GIFT City

Foreign investors looking to establish a presence in GIFT City must meet specific eligibility criteria set by the International Financial Services Centres Authority (IFSCA). These criteria ensure compliance with global standards while offering attractive opportunities for international businesses. Key requirements include:

FATF-Compliant Jurisdiction: Foreign entities must be based in jurisdictions that are compliant with the Financial Action Task Force (FATF) standards, ensuring they meet global anti-money laundering and counter-terrorism financing regulations.
Capital Requirements: Depending on the type of business, foreign entities must maintain certain minimum capital levels. For instance, banks must maintain a minimum capital of $20 million for an IFSC Banking Unit (IBU), while other sectors may have different capital needs.
Operational Ring-Fencing: Foreign companies must ensure operational and financial separation between their GIFT City entity and their foreign parent company, providing clarity on cross-border operations and regulatory compliance.
Regulatory Approval: Foreign entities must seek approval from the IFSCA before setting up operations. This includes submission of a detailed business plan, proof of compliance with financial and operational regulations, and adherence to local governance standards.
Sector-Specific Eligibility: Certain sectors, like banking and insurance, have additional sector-specific requirements. For instance, foreign banks must be regulated by a recognized financial regulator in their home country and comply with the Reserve Bank of India’s guidelines on foreign exchange transactions.

Meeting these criteria ensures a smooth setup process for foreign entities, enabling them to leverage the advantages of GIFT City, including tax exemptions, regulatory flexibility, and access to India’s growing financial markets.

Maximizing Foreign Investments by Establishing a Business in GIFT City

India’s foreign investment landscape has seen significant growth, with FDI inflows reaching $81.04 billion in FY 2024–25, a 14% increase from the previous fiscal year. This growth is fueled by favorable investment routes such as Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). GIFT City, India’s International Financial Services Centre (IFSC), stands out as a prime destination for foreign investors due to its robust regulatory framework and attractive tax benefits.

GIFT City: A Key Hub for Foreign Investment

GIFT City offers streamlined financial services and tax incentives, including 10-year tax holidays for fund managers, making it an attractive option for global businesses. As of 2025, over 150 fund managers manage assets worth over $22 billion in GIFT City. Furthermore, the value of Offshore Derivative Instruments (ODIs) reached approximately $16.5 billion by May 2025, showcasing GIFT City’s growing role in international finance.

Detailed Breakdown of Membership Fees in GIFT City

GIFT City offers a transparent and structured fee system for businesses looking to establish themselves within its financial ecosystem. The membership fees vary depending on the type of entity and services provided, ensuring flexibility for different business needs. Key membership fees include:

Stock Exchange Membership Fees:
- Trading Member: $500 application fee, with an annual fee ranging from $3,000 to $10,000, depending on the membership level.
- Clearing Member: $500 application fee, with annual fees starting at $3,000, plus additional deposits based on the type of membership.
Clearing Corporation Membership Fees:
- Self-Clearing Member: $500 application fee, with annual fees ranging from $10,000 to $15,000, depending on the size of the operation and the clearing services offered.
- Professional Clearing Member: $500 application fee, with a refundable deposit requirement of up to $100,000 and an annual fee of $15,000.
Exchange Fees for Specialized Activities:
- Investment Advisors & Other Intermediaries: Annual membership fees range between $1,000 to $3,500, with additional fees based on specific functions like portfolio management, investment advisory, and clearing activities.

These membership fees ensure access to GIFT City’s world-class trading infrastructure, regulatory benefits, and an integrated business environment, providing businesses with the tools needed to thrive in the global financial market.

Tax Benefits of Setting up Business in GIFT City

1. Income Tax Exemption

Units in GIFT City’s IFSC are eligible for a 100% income tax exemption for 10 consecutive years within the first 15 years of operation.
MAT/AMT of 9% applies to units that do not avail of the Section 80LA exemption, but companies opting for the new tax regime are exempt from MAT.

2. Dividend Distribution Tax (DDT) Exemption

Companies in IFSC are exempt from Dividend Distribution Tax, with dividends paid to non-resident shareholders subject to a 10% withholding tax.

3. Capital Gains Tax Exemptions

Capital gains from the transfer of specified securities, offshore derivatives, and non-deliverable forward contracts are exempt from tax for non resident.

4. GST and Customs Duty Exemptions

No GST on services received by units in IFSC or provided to IFSC/SEZ units or offshore clients.
Exemption from customs duties on goods imported into IFSC for authorized operations.

5. Stamp Duty and Securities Transaction Tax (STT) Exemption

Transactions carried out on IFSC exchanges are exempt from Stamp Duty and STT, reducing the cost of trading.

Tax Benefits for Non-Resident Investors

1. Tax-Free Interest Income

Interest income on fixed deposits and financial instruments in GIFT City’s IFSC is exempt from Indian taxation for non-residents.

2. AIFs Tax Exemptions

Non-resident investors in Category I and II AIFs registered in IFSC are exempt from Indian tax on income from specified securities / overseas investments, and are not required to file tax returns in India.

3. Repatriation Benefits

Income earned by non-resident investors from GIFT City investments is governed by India’s Double Taxation Avoidance Agreements (DTAAs), allowing for easy repatriation of earnings.

Sector-Specific Incentives

Financial Services

Income tax exemptions and GST exemptions on services provided to offshore clients make GIFT City attractive for financial institutions.

Insurance and Reinsurance

Tax exemptions on premiums received and claims paid, along with GST exemptions for services to offshore clients, enhance GIFT City’s appeal for the insurance and reinsurance sectors.

IT and TechFin

IT and TechFin companies benefit from income tax exemptions, capital subsidies, and infrastructure discounts under the Gujarat IT/ITeS Policy.

Benefits of Setting Up a Business in GIFT City

Strategic Location & Global Connectivity
GIFT City offers a prime location at the crossroads of global trade routes, providing businesses with seamless access to both Indian and international markets. Its strategic positioning ensures easy connectivity with key global financial hubs, making it an ideal choice for businesses looking to expand globally. The city is well-connected to major highways and the airport, ensuring that transportation and logistics are efficient, helping businesses tap into a wide range of market opportunities.
Benefits of Special Economic Zone
As a Special Economic Zone (SEZ), GIFT City offers numerous advantages for businesses, especially those looking to establish operations in India. The SEZ framework provides:
- Tax exemptions and incentives: Units in the International Financial Services Centre (IFSC) can benefit from 100% tax exemption for 10 consecutive years out of 15.
- GST Waiver: No Goods and Service Tax (GST) on services received by IFSC units and a reduced Minimum Alternate Tax (MAT).
- Simplified compliance: GIFT City’s SEZ regulations are designed to foster ease of doing business, reducing bureaucratic hurdles and providing businesses with a simplified compliance framework.
- Access to global trade: GIFT City’s SEZ status enables businesses to benefit from streamlined export and import procedures, making it an ideal gateway to international markets.
World-Class Infrastructure and Essential Services
GIFT City is designed to offer businesses a robust foundation with its world-class infrastructure. The city provides modern facilities and amenities that support both operational efficiency and business growth, including:
- Power back-up and communication services: Ensuring uninterrupted business operations, GIFT City offers a reliable power supply and high-quality communication networks, vital for today’s tech-driven businesses.
- Solid waste management and district cooling systems: The city uses sustainable and eco-friendly technologies for waste management and energy-efficient cooling systems, providing a greener business environment.
- Mass rapid transit system: A well-developed transit network connects businesses and residents within the city, promoting mobility and easy access to commercial and residential areas.
- City command and control center: This smart management center ensures the efficient functioning of the city, handling everything from traffic to resource management, and supporting businesses with a seamless operational environment.
The Tri-City Ecosystem: GIFT City, Gandhinagar, and Ahmedabad
GIFT City is part of a larger tri-city ecosystem, including Gandhinagar and Ahmedabad, enhancing its business appeal. This integrated approach offers businesses access to:
- Enhanced resources and synergies: The surrounding cities contribute to a broader pool of talent, resources, and infrastructure that businesses in GIFT City can tap into.
- Collaborative business environment: The tri-city vision promotes a collaborative ecosystem where businesses can connect, innovate, and grow, strengthening the overall region’s competitive edge.
Ideal Destination for Global Business Expansion
GIFT City is an excellent choice for international businesses looking to set up operations in India due to its:
- Strategic access to global financial markets: GIFT City connects India’s financial markets with global trade, creating a thriving hub for international businesses.
- Liberal regulatory environment: The regulatory framework in GIFT City is more flexible than in other parts of India, making it easier for businesses to comply with local laws and operate without extensive bureaucracy.
- Competitive tax structure: With various tax exemptions and concessions, including tax holidays and reduced tax rates, GIFT City offers a cost-effective business environment, particularly for businesses in the financial services, IT, and high-tech industries.
Shifting from Offshoring to Onshoring
The establishment of GIFT City marks a shift in India’s approach to global business operations. The government aims to encourage companies to move their operations from offshore locations to India, leveraging the city’s modern infrastructure and regulatory advantages. GIFT City provides the ideal environment for businesses to integrate with India’s economy, benefiting from global market connectivity while tapping into India’s growing market potential.

Benefits for Foreign Universities and Educational Institutes

Foreign universities and educational institutes operating in GIFT City can benefit from a relaxed regulatory framework, which exempts them from many of the domestic regulations that typically apply to Indian educational institutions. This provides greater freedom and flexibility to international academic entities, making GIFT City an attractive destination for establishing campuses and expanding educational services in India.

Conclusion

Adhering to the detailed guide for setting up and commencing operations in GIFT City is crucial for leveraging the full spectrum of benefits offered by this premier business hub. This guide ensures that businesses align with regulatory requirements and capitalize efficiently on the strategic advantages of GIFT City.

For more detailed information, visit GIFT City Business Operations and About GIFT City.

Portfolio Management Services (PMS) in GIFT City – Complete Guide

Posted on September 30, 2025October 13, 2025 by Treelife

Introduction

Portfolio Management Services (PMS) offer high-net-worth individuals (HNIs), family offices, and institutional investors the opportunity to invest through tailored strategies, with a professional manager actively overseeing the portfolio. Unlike pooled retail products, PMS provides bespoke solutions aimed at maximizing returns and minimizing risk.

GIFT City (Gujarat International Finance Tec-City) has rapidly emerged as India’s global financial hub under the International Financial Services Centre (IFSC). With world-class infrastructure, tax incentives, and a progressive regulatory framework managed by the International Financial Services Centres Authority (IFSCA), GIFT City has become a favoured location for cross-border financial services, including PMS. Established to rival financial hubs like Singapore and Dubai, GIFT City IFSC provides world-class infrastructure, tax incentives, and a progressive regulatory framework governed by the International Financial Services Centres Authority (IFSCA).

Why PMS in GIFT City is gaining traction:

Tax efficiency: No securities transaction tax (STT), commodity transaction tax (CTT), or dividend distribution tax (DDT) within IFSC; capital gains exemptions for eligible securities.
Global reach: Investors can access foreign currency denominated investments and global markets from India.
Regulatory ease: Streamlined compliance under IFSCA (Fund Management) Regulations, 2025 with lower friction compared to domestic PMS.
Growing adoption: In 2024, IFSCA reduced the minimum investment for PMS in GIFT City from USD 150,000 to USD 75,000 (approx. ₹65 lakh) making PMS more accessible for HNIs, NRIs, and family offices.

What is Portfolio Management Services (PMS)?

Definition and Scope

PMS offers customized financial management, where a portfolio manager actively oversees and manages an individual’s or institution’s equity, debt, and hybrid portfolios. PMS offers:

Customization: Tailored investment strategies to match client’s financial goals, risk appetite, and liquidity needs.
Active management: Unlike passive pooled funds, portfolio managers actively make buy/sell decisions.
Transparency: Investors hold securities in their own demat accounts, ensuring ownership visibility.
Performance orientation: PMS often targets higher returns than mutual funds, albeit with higher risk.

Types of PMS

1. Discretionary PMS

The portfolio manager has complete authority to manage investments.
Suitable for clients who prefer professional autonomy.
Example: A discretionary PMS provider may allocate 70% to equities and 30% to debt based on market outlook.

2. Non-Discretionary PMS

Portfolio manager provides recommendations, but execution requires client approval.
Ideal for investors who want control in final decisions.
Example: Manager suggests exiting a stock, but client decides the timing.

3. Advisory PMS

The manager acts purely as an advisor, without executing trades.
Investor retains complete control over transactions.
Useful for experienced investors who need research-backed advice.

Structure of PMS in GIFT City

Overview of PMS Structure under IFSCA

Portfolio Management Services (PMS) in GIFT City IFSC are organized under the IFSCA (Fund Management) Regulations, 2025, which lay down a flexible framework for setting up, managing, and operating PMS entities. The structure is designed to allow domestic HNIs, NRIs, and foreign investors to access Indian and international markets through a globally compliant, tax-neutral system.

At a high level, the PMS structure in GIFT City consists of:

PMS Entity – licensed with IFSCA, incorporated as a Company or LLP in GIFT City.
Portfolio Manager – responsible for strategy, execution, and compliance.
Custodian – mandatory appointment to safeguard investor assets.
Bank Account – can be opened in USD, or other permitted currencies.
Investor Accounts – separate demat accounts in the name of each investor for transparency.

Fund Management Entity (FME) Legal Structures in GIFT City

PMS in GIFT City must be organized as a Fund Management Entity (FME). The FME structure is essential for compliance with the IFSCA’s Fund Management Regulations, 2025.

Legal Structures for FME: PMS can be set up as a Company, Limited Liability Partnership (LLP), or branch of an existing regulated entity.
Fund Manager: Must meet the fit and proper criteria, ensuring that managers have sufficient qualifications and experience. A minimum net worth of USD 750,000 (~₹6.5 crore) is required to apply for PMS licensing.
Accredited Investors: Under previous regulations, certain accredited investors were exempt from minimum investment limits. It is important to verify whether the exemption still applies to align with current norms.

Organizational Structure of a PMS Provider in GIFT City

Layer	Function in PMS Structure	Regulatory Requirement (IFSCA)
Entity Setup	Company/LLP incorporated in GIFT IFSC	Must apply for PMS license
Portfolio Manager	Licensed individual/team managing investments	Fit & Proper criteria + Net worth norms
Custodian	Safeguards investor securities	Mandatory appointment
Banking Partner	Facilitates foreign currency accounts	GIFT City IFSC banks only
Compliance Officer	Ensures adherence to IFSCA rules	Reporting & disclosure obligations
Investor Accounts	Separate demat accounts under investor’s name	Full transparency mandated

Key Features of PMS Structure in GIFT City

Segregated ownership: Unlike mutual funds, securities remain in the client’s demat account, ensuring visibility and control.
Global flexibility: PMS can manage multi-currency portfolios, including overseas securities, subject to IFSCA rules.
Minimum investment threshold: As of today, investors can participate with USD 75,000 (~₹65 lakh) instead of the earlier USD 150,000.
Unified regulation: The entire PMS setup reports to IFSCA, reducing compliance duplication.
Professional governance: Requirements for qualified fund managers, minimum capital, and periodic reporting ensure transparency.

PMS Workflow in GIFT City – Step by Step

Investor Onboarding – KYC and eligibility checks (HNIs, NRIs, FPIs, family offices).
Account Setup – Opening of a separate demat account and foreign currency bank account.
Portfolio Allocation – Based on investor profile (equity, debt, alternatives, global securities).
Execution & Custody – Trades executed by the PMS entity; assets held with a custodian.
Reporting & Disclosure – Periodic performance reports, risk disclosures, and compliance filings with IFSCA.

Who Can Invest in PMS in GIFT City?

Residents: Indian citizens meeting eligibility criteria.
NRIs: Key beneficiaries, as PMS in GIFT City provides tax incentives and USD denominated structures.
Foreign investors & FPIs: Can directly invest via GIFT IFSC entities.
Family offices: Can consolidate global investments under one umbrella structure.

PMS vs Mutual Funds – Key Differences

Feature	PMS in GIFT City	Mutual Funds (India)
Structure	Individually managed portfolios	Pooled funds managed collectively
Ownership	Securities held in client’s demat account	Units allotted in proportion to investment
Customization	High – tailored per client’s objectives	Standardized schemes, no individual customization
Regulation	IFSCA (Fund Management) Regulations, 2025 (for GIFT City PMS)	SEBI (Mutual Fund) Regulations, 1996
Minimum Investment	USD 75,000 (≈ ₹65 lakh) – reduced in 2024	As low as ₹500 for SIPs
Transparency	Direct ownership of securities, real-time tracking	NAV-based tracking only
Target Audience	HNIs, NRIs, foreign investors, family offices	Retail and mass investors

Key takeaway: PMS in GIFT City bridges global wealth management with India’s IFSC advantage—offering customization, tax benefits, and global access unmatched by traditional mutual funds.

Why GIFT City for PMS?

Overview of GIFT IFSC Ecosystem

GIFT City (Gujarat International Finance Tec-City) is India’s first International Financial Services Centre (IFSC), created to compete with hubs like Singapore and Dubai. It offers a globally benchmarked financial ecosystem, bringing together banking, capital markets, insurance, fintech, and wealth management within a tax-neutral zone.

Strategic location: Situated in Gujarat between Ahmedabad and Gandhinagar.
Unified regulator: The International Financial Services Centres Authority (IFSCA) oversees all financial services, ensuring streamlined compliance.
Growing ecosystem: As of 2025, 700+ financial entities are registered in GIFT City IFSC, including PMS providers, AIFs, fintech startups, and global banks.
Global focus: GIFT City allows foreign currency transactions (USD, GBP, EUR, etc.), making it easier for NRIs and foreign investors to participate.

Benefits of Setting Up PMS in GIFT City

1. Liberalized Regulatory Environment

PMS in GIFT IFSC operates under IFSCA (Fund Management) Regulations, 2025, which are designed to provide greater flexibility than SEBI’s onshore PMS framework.
One-stop compliance: Portfolio managers can operate cross-border seamlessly without navigating multiple Indian regulators.

2. Tax Benefits – Neutral & Investor-Friendly

No STT (Securities Transaction Tax), CTT (Commodities Transaction Tax), or DDT (Dividend Distribution Tax).
Capital gains exemption for securities traded on IFSC exchanges.
Tax neutrality: Both foreign and domestic investors enjoy reduced tax friction compared to onshore PMS.
Example: An NRI investing through GIFT PMS avoids double taxation that would otherwise apply onshore.

3. Access to Global Investors & Foreign Capital

GIFT PMS structures can attract investments from NRIs, FPIs, and foreign institutions.
Ability to create USD-denominated portfolios for cross-border wealth management.
Opens the Indian market to family offices and institutional investors worldwide.

4. Ease of Currency Convertibility

PMS in GIFT City can operate in USD or INR, unlike onshore PMS which are restricted to INR.
Smooth capital inflows and repatriation for NRIs and foreign investors.
Supports multi-currency accounts and hedging mechanisms.

5. Lower Compliance Burden Compared to Onshore PMS

Unified oversight by IFSCA reduces duplication of reporting.
Fewer operational restrictions compared to SEBI-regulated PMS in India.
International standards of reporting and accounting, enhancing investor confidence.

Quick Snapshot: PMS in GIFT City Advantages

Benefit Category	PMS in GIFT City IFSC	PMS Onshore (India)
Minimum Investment	USD 75,000 (₹65 lakh)	₹50 lakh (SEBI rule)
Taxation	Tax neutral; no STT, CTT, DDT	STT, GST, and domestic capital gains apply
Currency	Multi-currency (USD/INR)	INR only
Regulator	IFSCA (single regulator)	SEBI + RBI + other bodies
Investor Base	Global: HNIs, NRIs, FPIs, family offices	Primarily Indian HNIs

Regulatory Framework for PMS in GIFT City

Governing Authority – IFSCA

The International Financial Services Centres Authority (IFSCA), set up in 2020, acts as the single unified regulator for all financial products and services in GIFT IFSC. Its mandate ensures ease of doing business, investor protection, and global competitiveness.

Key Regulations

IFSCA (Fund Management) Regulations, 2025:
- Governs PMS, AIFs, and mutual fund-equivalent structures in GIFT City.
- Provides a unified and liberalized regulatory framework.
Recent Amendments (2024):
- Minimum investment in PMS reduced from USD 150,000 to USD 75,000 (~₹65 lakh), making PMS more accessible to NRIs and HNIs.
- Flexibility in fund structures (multi-currency, global asset allocation).

Licensing Requirements for PMS Providers

To set up PMS in GIFT City, applicants must:

Apply for a PMS license with IFSCA.
Ensure the entity is incorporated in GIFT City (company/LLP).
Maintain required infrastructure, custodian arrangements, and compliance staff.
Meet prescribed net worth criteria.

Compliance Norms for PMS in GIFT City

Net Worth Requirements:
- Minimum USD 750,000 (~₹6.5 crore) net worth requirement for PMS providers (aligned with IFSCA norms).
Fit & Proper Criteria:
- Promoters and directors must be financially sound, with no regulatory blacklisting or adverse track record.
Reporting Obligations:
- Quarterly disclosures to IFSCA.
- Investor reporting on performance, fees, and risks.
- Annual audits and compliance certifications.

Investor confidence is boosted by the fact that PMS in GIFT City is regulated under international standards while retaining the ease of doing business that Indian HNIs and NRIs seek.

Minimum Investment & Eligibility for PMS in GIFT City

Latest Update on Minimum Investment

In 2024, IFSCA revised the entry threshold for Portfolio Management Services (PMS) in GIFT City, reducing the minimum investment from USD 150,000 to USD 75,000 (~₹65 lakh). This significant change has made PMS in GIFT City more accessible to a wider base of High-Net-Worth Individuals (HNIs), NRIs, and global investors. By contrast, SEBI-regulated onshore PMS in India continues to require a minimum of ₹50 lakh (~USD 60,000).

Who Can Invest in PMS in GIFT City?

The eligibility framework is designed to attract both Indian and global investors:

High-Net-Worth Individuals (HNIs): Seeking bespoke, tax-efficient portfolio strategies.
Non-Resident Indians (NRIs): Benefit from USD-denominated portfolios and tax neutrality.
Foreign Portfolio Investors (FPIs): Gain direct access to Indian and global securities.
Family Offices: Can consolidate global investments under a regulated IFSC PMS structure.

Comparative Chart – India Onshore PMS vs GIFT City PMS

Criteria	PMS in GIFT City IFSC	PMS Onshore (India)
Regulator	IFSCA (single unified regulator)	SEBI (Securities and Exchange Board of India)
Minimum Investment	USD 75,000 (~₹65 lakh)	₹50 lakh (~USD 60,000)
Currency Options	Multi-currency (USD, INR, other FCY)	INR only
Investor Base	HNIs, NRIs, FPIs, family offices	Primarily Indian HNIs
Taxation	Tax-neutral; exemptions on capital gains, GST, stamp duty	Domestic taxation applies (STT, GST, capital gains)
Compliance Framework	International standards, simplified filings	Multiple Indian regulators, higher compliance burden

While onshore PMS is limited to domestic HNIs, PMS in GIFT City offers global participation, better tax treatment, and multi-currency flexibility.

Tax Benefits of PMS in GIFT City

One of the strongest attractions for investors in PMS at GIFT City is its favorable tax environment.

1. Zero Capital Gains Tax

Transfers of securities listed on IFSC exchanges (India INX, NSE IFSC) are exempt from capital gains tax.
This makes PMS in GIFT City especially attractive for active traders and NRIs, compared to onshore PMS where capital gains are taxable.

2. GST Exemption on Management Fees

Management and advisory fees charged by PMS providers in GIFT City are exempt from GST, lowering overall costs for investors.

3. No Stamp Duty on Transactions

Securities transactions within IFSC are not subject to stamp duty, unlike onshore PMS where stamp duty applies.

Comparison of PMS Taxation – India vs GIFT City

Tax Component	PMS in GIFT City IFSC	PMS Onshore (India)
Capital Gains Tax	0% on IFSC-listed securities	10–15% (LTCG) / 15–30% (STCG)
Dividend Distribution Tax	Nil	Taxable in hands of investors
STT (Securities Tax)	Not applicable	Applicable
CTT (Commodities Tax)	Not applicable	Applicable
Stamp Duty	Exempt	0.015%–0.05% on transactions
GST on Fees	Exempt	18% GST on management fees

Case Study – NRI Investing USD 1 Million in PMS

Let’s illustrate the tax advantage of PMS in GIFT City vs onshore PMS for an NRI investor with USD 1M (~₹8.2 crore):

Parameter	PMS in GIFT City (IFSC)	PMS Onshore (India)
Investment Size	USD 1,000,000	USD 1,000,000
Annual Returns (10%)	USD 100,000	USD 100,000
Capital Gains Tax	Nil (0%)	~15% = USD 15,000
STT/Stamp Duty	Nil	~USD 2,000–3,000
GST on Fees	Exempt	18% on fees (assume USD 10,000 fee → USD 1,800 GST)
Net Post-Tax Return	~USD 100,000	~USD 81,200–82,000

By investing through PMS in GIFT City, the NRI saves nearly USD 18,000 annually compared to onshore PMS, a difference of 18% in tax costs.

How to Set Up PMS in GIFT City

Setting up a Portfolio Management Service (PMS) in GIFT City IFSC is a structured process governed by the IFSCA (Fund Management) Regulations, 2025. PMS providers—domestic or international—must follow specific steps to become operational.

Step-by-Step Process of Setting up PMS in GIFT City

Incorporate Entity in GIFT City
- Incorporate a Company or LLP within GIFT City.
- Ensure the entity complies with Companies Act/LLP Act provisions and is registered with GIFT City authorities.
Apply for PMS License with IFSCA
- Submit application to the International Financial Services Centres Authority (IFSCA).
- Provide details of promoters, business plan, investment strategies, and compliance structures.
Meet Net Worth & Compliance Requirements
- Maintain minimum net worth of USD 750,000 (~₹6.5 crore) as prescribed.
- Ensure “fit and proper” criteria for directors and key persons.
Infrastructure Setup
- Establish office space in GIFT City’s commercial zone.
- Appoint a custodian (mandatory) to safeguard investor assets.
- Tie up with banking partners for USD/INR accounts.
IFSCA Approval & Operationalization
- Upon review, IFSCA grants the PMS license.
- Entity may then start onboarding investors and offering PMS strategies.

Estimated Timeline

Application filing & review: 1–2 months.
IFSCA evaluation & clarifications: 1–2 months.
Infrastructure readiness & approvals: 1–2 months.
Total estimated time: 3–6 months.

Costs Involved in Setting up PMS in GIFT City

Cost Head	Approximate Range (USD)	Notes
IFSCA Licensing Fees	$5,000–$10,000	One-time + annual renewal
Net Worth Requirement	$750,000 (capital base)	Mandatory minimum capital
Office Rentals	$15–$25 per sq. ft./month	Prime GIFT City business district
Compliance & Advisory	$20,000–$40,000 annually	Legal, audit, and regulatory costs
Operational Expenses	Variable	Salaries, technology, marketing

While initial costs are significant, PMS in GIFT City provides global access, tax neutrality, and regulatory efficiency—making it a lucrative long-term proposition for asset managers.

How Investors Can Invest in PMS in GIFT City

Once PMS providers are operational, investors—HNIs, NRIs, FPIs, and family offices—can seamlessly invest through structured routes.

Modes of Investment

Direct Account Opening with PMS Provider
- Investors onboard directly with licensed PMS providers in GIFT City.
- Each investor is given a separate demat and bank account for transparency.
Via NRE/NRO Accounts (for NRIs)
- NRIs can invest through their NRE (Repatriable) or NRO (Non-Repatriable) accounts.
- Funds can be freely remitted to and from GIFT City PMS structures.
Through FPI (Foreign Portfolio Investor) Route
- Institutional and foreign investors can use the FPI route to invest in PMS strategies.
- Enables global family offices and funds to participate seamlessly.

Documentation Required

Proof of identity and residence (passport, PAN, Aadhaar where applicable).
Bank account details (NRE/NRO/foreign bank accounts).
Investor declaration on risk appetite & investment objectives.
Regulatory declarations (FATCA/CRS for foreign investors).

Currency Denominations Accepted

USD (primary currency in GIFT City).
INR (Indian Rupees).
Other foreign currencies (EUR, GBP, etc.), subject to PMS provider’s policy and IFSCA approval.

Risks & Challenges of PMS in GIFT City

While Portfolio Management Services in GIFT City offer tax neutrality, global access, and simplified compliance, investors and providers must also understand the potential risks and challenges.

1. Regulatory Evolution

PMS in GIFT IFSC is governed by the IFSCA (Fund Management) Regulations, 2025.
As a relatively new regulatory framework, rules are still evolving, with periodic updates.
Risk: Investors and PMS providers must adapt to regulatory changes that may alter compliance or reporting obligations.

2. Concentration Risk

As of early 2025, GIFT City hosts 700+ financial entities, but PMS players remain fewer compared to onshore India.
Limited diversity may result in concentration of strategies and reduced benchmarking opportunities for investors.

3. Market Risks – Currency & Global Exposure

PMS in GIFT City allows multi-currency portfolios (USD,other FCY).
Risk arises from currency volatility and exposure to global markets, which can impact returns.
Example: An NRI investing in USD may face gains or losses purely due to exchange rate fluctuations.

4. Liquidity Constraints in Early Years

IFSC-listed securities and new instruments may have lower trading volumes than traditional Indian exchanges.
Early investors could face liquidity challenges while exiting positions.

Mitigation Strategies Adopted by PMS Providers

Diversification: Expanding across equity, debt, and global asset classes to reduce risk.
Currency Hedging: Using forward contracts and derivatives to manage FX volatility.
Investor Education: Transparent reporting and disclosure of risks to clients.
Strategic Partnerships: Collaborating with global custodians, fintechs, and IFSC exchanges to boost liquidity and investor confidence.
Gradual Scaling: PMS providers are onboarding select high-quality clients first, ensuring performance stability before wider expansion.

Leading PMS Players in GIFT City (2025)

As the ecosystem expands, several PMS providers have already set up operations in GIFT City, supported by advisory firms and compliance specialists. Leading PMS players with portfolios domiciled in GIFT City include Marcellus Investment Managers, Abakkus Asset Manager, Helios India, and Aequitas, with other notable entities like ICICI Prudential also having a presence. Other prominent players such as ASK Investment Managers, Kotak Portfolio PMS, and Motilal Oswal are also active in the broader Indian PMS market and may have offerings for GIFT City clients.

PMS in GIFT City vs Mutual Funds & AIFs

Investors often compare Portfolio Management Services (PMS), Mutual Funds, and Alternative Investment Funds (AIFs) in GIFT City to determine the best fit for their financial goals. While all three structures are regulated under the IFSCA framework, they cater to different risk profiles and investor categories.

Comparative Snapshot

Criteria	PMS in GIFT City	AIFs in GIFT City	Mutual Funds in GIFT City
Minimum Investment	USD 75,000 (~₹65 lakh)	USD 150,000 (~₹1.2 crore) [varies by scheme]	As low as USD 1,000 (retail accessible)
Structure	Individually managed portfolios	Pool of funds with defined strategies	Collective retail-focused pooling
Customization	High – tailored to each investor	Medium – per scheme strategy	Low – standardized product for retail
Transparency	Direct ownership via demat accounts	Unit-based ownership	NAV-based ownership
Target Investors	HNIs, NRIs, family offices, FPIs	Ultra-HNIs, institutional investors	Retail, HNIs, global small-ticket investors
Taxation (IFSC)	No STT/CTT/DDT and capital gains exempt on IFSC exchanges for NRIs	No Tax for IFSC-listed securities for NRIs	No capital gains for NRIs
Liquidity	Moderate – depends on portfolio allocation	Low – lock-in of 3+ years typical	High – daily redemption (open-ended funds)
Regulator	IFSCA (Fund Management Regulations, 2025)	IFSCA (Fund Management Regulations, 2025)	IFSCA (Fund Management Regulations, 2025)

Which Structure Suits Which Investor?

PMS in GIFT City → Best for HNIs, NRIs, and family offices seeking personalized, tax-efficient strategies and direct ownership of assets.
AIFs in GIFT City → Suited for ultra-HNIs and institutional investors aiming to invest in private equity, venture capital, hedge funds, or special situation funds.
Mutual Funds in GIFT City → Ideal for retail and small-ticket investors who want cost-effective diversification and liquidity.

Synergy Between PMS and AIFs in GIFT IFSC

PMS and AIFs complement each other in India’s wealth management ecosystem.
Many global and domestic managers first set up AIFs in GIFT City and later expand into PMS to serve HNIs and NRIs.
Investors often use a dual approach: PMS for customized public market exposure, AIFs for private market opportunities.
This synergy strengthens GIFT City’s positioning as a comprehensive hub for wealth management.

Future Outlook for PMS in GIFT City

IFSCA’s Roadmap for PMS Expansion

IFSCA continues to liberalize regulations, evident from the 2024 decision to reduce the PMS entry threshold to USD 75,000.
Upcoming reforms may include greater cross-border investment flexibility, digital-first compliance, and ESG mandates.

Government Push for GIFT City as a Global IFSC

India is positioning GIFT City as a credible alternative to Singapore and Dubai for international financial services.
Incentives such as 100% tax holiday for 10 years in a block of 15 years, no capital gains tax for NRIs, and exemptions from GST/stamp duty make PMS highly competitive globally.

Market Growth Potential

Industry reports estimate PMS Assets Under Management (AUM) in GIFT City could reach USD 30–50 billion by 2030, driven by:
- Increasing NRI inflows.
- Growing family office participation.
- Expansion of global asset managers into GIFT City.

Emerging Opportunities in PMS at GIFT IFSC

ESG & Green Finance PMS: Alignment with global sustainability goals.
Family Office Services: Tailored PMS for multi-generational wealth.
Cross-Border Products: PMS offering seamless access to India + global equities under one platform.
Digital Onboarding & Fintech Integration: Faster investor onboarding via AI-driven compliance checks.

Portfolio Management Services (PMS) in GIFT City have emerged as a powerful wealth management solution for HNIs, NRIs, family offices, and foreign investors, offering the perfect blend of tax neutrality, global access, and regulatory efficiency under the IFSCA framework. With benefits like no STT, CTT, or capital gains tax on IFSC-listed securities, reduced minimum investment of USD 75,000 (~₹65 lakh), multi-currency flexibility, and simplified compliance, PMS in GIFT City is fast becoming a preferred choice over traditional onshore PMS, mutual funds, and AIFs. As India positions GIFT City as a global financial hub rivaling Singapore and Dubai, the PMS ecosystem is projected to reach USD 30–50 billion AUM by 2030, driven by innovation, ESG-focused strategies, and rising NRI participation. For investors seeking personalized, transparent, and globally competitive portfolio management, GIFT City PMS represents the future of wealth creation.

Setting up an LLP in GIFT City – A Complete Guide

Posted on September 30, 2025September 30, 2025 by Treelife

Introduction

India is rapidly positioning itself as a global hub for finance and innovation, and at the center of this ambition lies GIFT City (Gujarat International Finance Tec-City) the country’s first International Financial Services Centre (IFSC). Designed as a smart city and a Special Economic Zone (SEZ), GIFT City offers world-class infrastructure, a progressive regulatory regime, and tax benefits that rival global financial hubs like Dubai and Singapore.

One of the most popular business structures in GIFT City is the Limited Liability Partnership (LLP). An LLP in GIFT City combines the benefits of limited liability with the operational flexibility of a partnership, making it ideal for professional services, fund managers, fintech ventures, and international startups looking for a cost-efficient yet globally compliant entity.

Key reasons why entrepreneurs prefer LLP registration in GIFT City:

Reduced compliance burden compared to private limited companies.
Flexibility in ownership and management while still enjoying limited liability.
Ability to conduct business in both INR and foreign currencies.
Access to the unique tax exemptions and incentives provided by the GIFT IFSC framework.

Why Choose GIFT City for an LLP?

1. Strategic Location & Regulatory Environment

Situated between Ahmedabad and Gandhinagar, GIFT City enjoys excellent connectivity with major airports, ports, and financial institutions.
It operates under a Special Economic Zone (SEZ) framework and is governed by the International Financial Services Centres Authority (IFSCA), ensuring a single-window clearance system and simplified compliance processes.

2. International Recognition under IFSCA

IFSCA is India’s unified regulator for financial services in GIFT IFSC, consolidating powers that in other cities are divided among SEBI, RBI, IRDAI, and PFRDA.
This one-stop regulatory model gives LLPs a significant advantage in faster approvals, reduced duplication of compliance, and globally recognized governance standards.
Over 700+ entities (as of 2025) are already operating in GIFT City, spanning banks, insurers, fintech startups, and investment funds demonstrating growing global confidence.

3. Benefits for Startups, Fintech, Fund Managers & IT/ITES

Startups: Easy incorporation, lower compliance costs, and international branding through an IFSC address.
Fintechs: Sandbox regime and innovation-friendly policies make GIFT City a preferred testbed.
Fund Managers: Access to global investors, zero capital gains tax for certain instruments, and tax neutrality for offshore funds.
IT/ITES & Professional Firms: Attractive cost structure, world-class infrastructure, and exemptions on GST for services rendered to IFSC units.

Data Point: GIFT City vs Other Indian Cities

Factor	GIFT City	Other Indian Cities
Tax Benefits	10-year tax holiday (any 10 years out of 15)	Standard corporate tax
Regulatory	IFSCA – single unified regulator	Multiple regulators (SEBI, RBI, IRDAI, etc.)
Forex Flexibility	INR & Foreign Currency (FCY) accounts permitted	Primarily INR only

LLP in GIFT City – Key Features

Choosing an LLP in GIFT City gives businesses a hybrid structure that blends the flexibility of a partnership with the advantages of a corporate entity. Some of the most notable features include:

1. Separate Legal Entity

An LLP incorporated in GIFT IFSC is recognized as a distinct legal entity from its partners.
This means the LLP can own assets, enter into contracts, and sue or be sued in its own name.
It provides global investors and clients confidence that the entity operates under internationally compliant governance frameworks.

2. Limited Liability of Partners

The liability of partners is limited to their agreed contribution.
Personal assets of partners are not at risk, unless fraud or misconduct is proven.
This feature makes LLP registration in GIFT City attractive for cross-border service providers and fund managers who want to safeguard personal liability.

3. Flexibility in Management & Compliance

Unlike private limited companies, LLPs do not require a board of directors.
Internal management is governed by the LLP Agreement, offering freedom to customize rights and responsibilities.
Compliance requirements are lighter: no mandatory audits unless turnover exceeds ₹40 lakhs or contribution exceeds ₹25 lakhs.
This makes LLP incorporation in GIFT City ideal for professional services, IT/ITES firms, and small-to-mid-sized investment structures.

4. Allowed Activities in GIFT SEZ/IFSC

LLPs in GIFT City can engage in a broad range of permitted activities, subject to IFSCA and SEZ guidelines:

Financial Services: Fund management, investment advisory, fintech operations.
IT & ITES: Software development, BPO, KPO, and consulting services.
Professional Services: Legal, accounting, compliance, and advisory firms.
Support Services: Back-office operations for international businesses.

Example: An LLP in GIFT IFSC can act as an investment manager to an Alternative Investment Fund (AIF) registered with IFSCA, benefiting from tax incentives and regulatory exemptions not available outside GIFT City.

Eligibility Criteria for LLP Registration in GIFT City

To set up an LLP in GIFT City, businesses must meet specific criteria defined by the Ministry of Corporate Affairs (MCA), SEZ regulations, and IFSCA guidelines.

1. Minimum Partner Requirement

At least two partners are required to incorporate an LLP.
Out of these, one partner must be a resident in India as per the Companies Act, 2013 (staying at least 182 days in the previous year).
Both Indian and foreign nationals can be partners, provided they meet KYC and compliance norms.

2. Eligible Business Activities

Only businesses approved under IFSCA and GIFT SEZ rules are allowed.
Core permitted categories include:
- Financial services (asset management, insurance intermediaries, fintech).
- IT/ITES and global outsourcing units.
- Advisory and consultancy firms.
Restricted/prohibited activities (like real estate trading or non-permitted manufacturing) are disallowed.

Before initiating LLP incorporation in GIFT City, confirm that the proposed activity falls within the IFSCA’s approved list of activities.

3. Net Worth & Capital Contribution Requirements

There is no statutory minimum capital requirement to incorporate an LLP in India, including in GIFT City.
However, sector-specific guidelines may impose financial thresholds:
- Example: Fund managers registered under IFSCA must meet a prescribed minimum net worth (commonly ₹2 crore or more, depending on fund category).
- For IT/ITES firms, no net worth requirements exist beyond basic incorporation contribution.

Quick Reference Table – LLP Eligibility in GIFT City

Criteria	Requirement in GIFT City LLP
Minimum Partners	2 (at least 1 Indian resident)
Allowed Activities	As per IFSCA & SEZ approvals
Capital Requirement	Sector-specific
Foreign Participation	Allowed, subject to FEMA & IFSCA

Step-by-Step Process for LLP Incorporation in GIFT City

Setting up an LLP in GIFT City involves a combination of MCA procedures and GIFT SEZ/IFSCA approvals. The process is streamlined but requires careful sequencing to ensure compliance. Below is a clear breakdown of how LLP registration in GIFT City works.

1. Pre-Registration

Before applying for incorporation, certain prerequisites must be met:

Name Reservation (RUN Service – MCA):
- Apply for LLP name approval using the MCA’s Reserve Unique Name (RUN) service.
- The name should end with “LLP” and must be distinct from existing registered names.
- If the LLP plans IFSC activities, terms like “IFSC” or “GIFT” can be added with prior approval.
Digital Signature Certificate (DSC):
- Mandatory for all designated partners to sign e-forms.
- Issued by a licensed Certifying Authority.
Director Identification Number (DIN):
- Partners who wish to act as “Designated Partners” must obtain a DIN through MCA.
- DIN allotment can be done simultaneously with incorporation via the FiLLiP form.

2. Registration with MCA

Once pre-requisites are ready, proceed to formal LLP incorporation:

FiLLiP Form Filing:
- File the Form for Incorporation of LLP (FiLLiP) on the MCA portal.
- Details required: partner information, registered office address in GIFT SEZ, and business activity code.
- The Registrar of Companies (RoC) issues the Certificate of Incorporation once approved.
LLP Agreement:
- Must be filed within 30 days of incorporation using Form 3.
- Defines the rights, duties, and profit-sharing arrangements of partners.
- For LLPs in GIFT City, the Agreement should also comply with SEZ and IFSCA regulations.

3. GIFT City / SEZ Approvals

After MCA registration, the entity must seek special approvals for operating inside GIFT IFSC:

Application to SEZ Development Commissioner:
- Submit a proposal to establish an LLP unit inside the GIFT SEZ on SWIT portal.
- Documents: incorporation certificate, LLP Agreement, and proposed business activity plan.
- Once approved, the LLP receives a Letter of Approval (LoA).
IFSCA Approval (for Regulated Sectors):
- If the LLP operates in financial services, fund management, fintech, or insurance, separate approval from the International Financial Services Centres Authority (IFSCA) by making an application on SWIT portal is mandatory.
- This ensures compliance with global financial service norms.

4. Post-Incorporation Compliance

After approvals, the LLP must complete post-incorporation formalities:

Statutory Registrations:
- PAN (Permanent Account Number).
- TAN (Tax Deduction Account Number).
- GST (if turnover exceeds the prescribed threshold or for IT/ITES/financial service exports).
Bank Account Opening in GIFT IFSC:
- Open business SNRR account for INR transactions and foreign currency (FCY) account with IBUs in GIFT IFSC.
- This is one of the unique benefits of LLP incorporation in GIFT City, as entities can hold dual-currency accounts.

Setting up an LLP in GIFT City - A Complete Guide 16

Tax & Regulatory Benefits of LLP in GIFT City

Setting up an LLP in GIFT City unlocks powerful tax incentives and regulatory advantages that make it one of the most attractive jurisdictions in India for global investors, startups, and professional service firms.

Key Tax Benefits

100% Tax Exemption:
- LLPs in GIFT IFSC enjoy a 100% tax holiday for 10 consecutive years out of 15 years from incorporation (Section 80LA of the Income Tax Act, 1961). However, they are subject to a nominal Alternative Minimum Tax at 9% plus cess and surcharge.
- Businesses can choose the most profitable 10 years to maximize savings.
No Transaction Taxes:
- Securities Transaction Tax (STT), Commodity Transaction Tax (CTT), and Long-Term Capital Gains Tax are not applicable to specified financial instruments traded in GIFT IFSC.
GST Exemption on Exported Services:
- Services provided by an LLP in GIFT City to another IFSC unit or to foreign clients are treated as “exports” and are GST-exempt.

Regulatory Benefits

Unified Oversight by IFSCA: A single regulator for banking, insurance, capital markets, and fintech reduces compliance complexity.
Ease of Business Approvals: Fast-track clearances via SEZ authorities and IFSCA.

Over 700+ entities are operational in GIFT IFSC across banking, fintech, fund management, and IT/ITES sectors demonstrating strong international adoption (Source: IFSCA). For entrepreneurs, these benefits make LLP incorporation in GIFT City a cost-effective and tax-neutral structure for cross-border operations.

Documents Required for LLP Registration in GIFT City

To successfully complete LLP registration in GIFT City, applicants must prepare and submit the following documents:

Partner Documentation

KYC of Partners:
- Indian Nationals: PAN, Aadhaar, proof of address.
- Foreign Nationals/NRIs: Passport, proof of overseas residence.

Office Documentation

Proof of Registered Office: Lease deed/ownership document for premises in GIFT SEZ.
No Objection Certificate (NOC): Written approval from GIFT SEZ authority confirming use of office space.

Legal & Compliance Documentation

LLP Agreement: Outlining partner contributions, rights, duties, and management structure (to be filed within 30 days of incorporation).

Quick Checklist for GIFT City LLP Registration

Category	Required Documents
Partner KYC	PAN, Aadhaar, Passport (for foreign partners)
Office Proof	Lease deed/ownership document in GIFT SEZ
Authority Approval	NOC from GIFT SEZ authority
Legal Document	LLP Agreement (filed with MCA)

Cost of LLP Incorporation in GIFT City

The total cost of setting up an LLP in GIFT City varies depending on professional fees, regulatory approvals, and the type of business activity (financial services vs IT/ITES vs advisory). Below is a breakdown of typical expenses:

Key Cost Components

MCA Filing Fees:
- ₹500 – ₹5,000 depending on the contribution amount/capital structure.
Professional Fees:
- Service providers typically charge for drafting LLP Agreements, filing forms, and compliance management.
GIFT SEZ/IFSCA Approvals:
- Sector-specific approvals may cost between USD 5,000 – USD 25,000, depending on the business model (e.g., fund management, fintech, insurance intermediaries).

Comparison: LLP vs Private Limited Company in GIFT City

When deciding between LLP registration in GIFT City and Private Limited Company incorporation in GIFT City, businesses should weigh compliance, flexibility, and scalability.

Parameter	LLP in GIFT City	Private Limited Company in GIFT City
Ownership	Partners (flexible contribution)	Shareholders (equity-based structure)
Compliance	Lower – fewer filings, no audits until turnover > ₹40 lakh or capital > ₹25 lakh	Higher – annual filings, board meetings, mandatory audits
Suitable For	Professional services firms, investment managers, IT/ITES units	Startups, fintechs, MNC subsidiaries, entities seeking external equity funding
Tax Benefits	Same GIFT City tax holiday benefits apply. However, AMT at 9% would apply	Same tax benefits apply
Fundraising	Limited (no equity shares)	Easier access to VC/PE investments

Key Insight: LLPs are best for cost-efficient, professional service and advisory setups, while Private Limited Companies suit scalable startups and fintech firms requiring external capital infusion.

Common Challenges & How to Overcome Them

While GIFT City offers unmatched benefits, businesses often face practical hurdles during LLP incorporation in GIFT City.

1. Delays in SEZ Approvals

Challenge: Documentation checks and SEZ Development Commissioner approvals may take longer than expected.
Solution: Ensure all documents (LLP Agreement, lease deed, partner KYC) are complete and pre-vetted before submission.

2. Sector-Specific Licensing under IFSCA

Challenge: Financial services LLPs (fund managers, fintechs, insurance intermediaries) require additional approvals from IFSCA, which can involve detailed scrutiny.
Solution: Engage advisors familiar with IFSCA licensing frameworks to prepare a strong application and avoid rejections.

3. Currency Compliance & FEMA Considerations

Challenge: LLPs in GIFT City often deal with foreign currency accounts and cross-border payments, which require FEMA compliance.
Solution: Work with banks in GIFT IFSC that specialize in dual-currency accounts and ensure FEMA compliance for inward/outward remittances.

Setting up an LLP in GIFT City is one of the most strategic choices for entrepreneurs, investors, and professional service firms seeking a globally competitive and tax-efficient business structure in India. With benefits like 100% tax exemption for 10 years, simplified compliance, the ability to operate in both INR and foreign currencies, and oversight from a single unified regulator (IFSCA), LLP registration in GIFT City offers unmatched advantages over traditional business setups. Whether you are in fintech, fund management, IT/ITES, or advisory services, LLP incorporation in GIFT City provides the flexibility of a partnership with the credibility of an internationally recognized financial hub making it the ideal gateway for scaling operations in India and beyond.

Starting a Bullion Trade in GIFT City (2025)

Posted on June 30, 2025July 22, 2025 by Treelife

Are you looking to venture into the lucrative world of bullion trading in India? The India International Bullion Exchange (IIBX) in GIFT City, Gujarat, is rapidly emerging as the premier gateway for efficient and compliant bullion trade in GIFT City. This comprehensive guide will walk you through everything you need to know about setting up bullion trade in GIFT City in 2025.

Why GIFT City is the Premier Destination for Bullion Trading for 2025

GIFT City (Gujarat International Finance Tec-City) is rapidly solidifying its position as the go-to hub for starting bullion trading and setting up bullion trade in India. Designed as a global financial services center, it offers unparalleled advantages for businesses looking to engage in the precious metals market, making it the strategic choice.

Strategic Advantages for Bullion Businesses

Global Access & Time Zone Advantage: GIFT City’s strategic geographical location offers a crucial time zone advantage, facilitating seamless global bullion trade operations across major markets, from East to West. This reduces operational overlaps and extends trading hours.
Robust Regulatory Framework: Regulated by the International Financial Services Centres Authority (IFSCA), GIFT City provides a transparent, secure, and conducive environment for setting up bullion trading. IFSCA’s clear guidelines foster trust and efficiency in all bullion-related activities.
World-Class Infrastructure: Investing in bullion trade in GIFT City means access to state-of-the-art infrastructure. This includes advanced trading platforms, secure vaulting facilities for physical bullion, and comprehensive financial services, ensuring efficient and safe operations.
Streamlined Direct Import Gateway: The presence of the India International Bullion Exchange (IIBX) within GIFT City acts as a direct import gateway for bullion into India. This significantly simplifies and accelerates the process of setting up bullion trade and importing precious metals, cutting down on logistical complexities.

IIBX: Your Gateway to India’s Bullion Market

Central to starting bullion trading in GIFT City is the India International Bullion Exchange IFSC Limited (IIBX). Launched in July 2022, IIBX is conceptualized as the principal entry point for bullion imports into India, fostering a world-class ecosystem for bullion trading, investment in related financial products, and secure vaulting services within the IFSC.

Core Features of the India International Bullion Exchange

IFSCA Regulation: IIBX operates under the strict oversight of the IFSCA, ensuring high standards of transparency, market integrity, and compliance for all participants engaged in bullion trading.
Strong Institutional Backing: Promoted by India’s leading market infrastructure institutions, including NSE, INDIA INX (a subsidiary of BSE), NSDL, CDSL, and MCX, IIBX provides a robust and reliable platform for setting up bullion trading.
Innovative Settlement & Payouts: IIBX is recognized for its “Global First Initiatives,” notably the “Every 30 minutes Settlement of BDR (Bullion Depository Receipts)” and direct pay-outs to buyers. This rapid settlement process enhances liquidity and operational efficiency for bullion trade.
USD-based Hedging: Entities can leverage USD-based pricing for gold futures on IIBX. This feature eliminates the need for establishing overseas subsidiaries for hedging operations, simplifying risk management for those starting bullion trading and wanting to hedge their price risk.

Who Can Participate in Bullion Trading at IIBX in GIFT City?

The India International Bullion Exchange (IIBX) in GIFT City is designed to be an inclusive platform, welcoming a diverse range of participants keen on setting up bullion trade in GIFT City. Understanding the various roles is key to leveraging the opportunities presented by this thriving ecosystem for starting bullion trading.

Key Players in the IIBX Ecosystem

For those considering setting up bullion trading, IIBX accommodates several categories of entities, each with distinct functions and specific onboarding requirements:

Qualified Jewellers (QJ): Qualified Jewellers (QJ) are entities actively engaged in the precious metals business under specific ITS(HS) codes, and they must meet defined net worth and turnover criteria to participate in bullion trading on the IIBX. To qualify, a QJ must have a minimum net worth of ₹25 crore, as per its latest audited financial statement. The net worth is calculated by adding the paid-up share capital, reserves created from profits, and securities premium account, while deducting accumulated losses and unamortized expenditures. Additionally, QJs must ensure that 90% of their average annual turnover over the past three years comes from dealings in precious metals. They are empowered to import both gold and silver directly through IIBX and can hold Tariff Rate Quotas (TRQs). Furthermore, QJs must provide a net worth certificate from a practicing Chartered Accountant, Cost Accountant, or Company Secretary, and comply with the ‘fit and proper’ criteria under Regulation 51(2) of the IFSCA (Bullion Exchange) Regulations, 2020.
Tariff Rate Quota (TRQ) Holders: These are entities holding valid India-UAE TRQ licenses or authorizations from the Directorate General of Foreign Trade (DGFT). Their primary advantage is the ability to import UAEGD gold under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) at a concessional customs duty.
Gold and Silver Futures Hedgers: This category includes domestic residents (excluding individuals) who have exposure to gold and silver price fluctuations. IIBX offers a dedicated platform for them to hedge their price risk using gold and silver futures contracts.
Other Bullion Market Stakeholders: Beyond these primary categories, the IIBX ecosystem also facilitates participation from a broader range of crucial entities, including:
- Refiners
- Bullion Dealers
- Bullion Importers
- Jewellery Exporters
- Special Category Clients (SCCs)
- International Clients

Each of these participant types contributes to a robust and dynamic environment for bullion trading in GIFT City, fostering liquidity and diverse market activities.

Step-by-Step Guide: How to Start Bullion Trading in GIFT City (2025)

Setting up bullion trade in GIFT City is a structured process, tailored to whether your primary focus is physical bullion import/trade or hedging. Follow these precise steps to establish your presence and begin starting bullion trading through the IIBX ecosystem.

Path 1: For Physical Bullion Traders (Qualified Jewellers & TRQ Holders)

If your aim is to import and trade physical gold and silver, this is your direct route for setting up bullion trading in GIFT City.

1. IFSCA Notification & IIBX Membership Application:
- Action: Submit your application and all required documents via the IIBX Membership Portal. This formal application initiates your recognition as a Qualified Jeweller (QJ) or Valid India-UAE TRQ Holder by IFSCA.
- Key Purpose: Official acknowledgment and regulatory approval to commence bullion trade.
2. Demat Account Setup with IIDI:
- Action: Open a Demat Account with India International Depository IFSC Limited (IIDI) once your IFSCA notification is received.
- Key Purpose: Essential for holding Bullion Depository Receipts (BDRs) electronically, crucial for seamless trading and settlement.
3. Trading and Clearing Account Setup:
- Action: Obtain your Legal Entity Identifier (LEI) and Unique Client Code (UCC), then set up accounts with an IFSCA-registered member.
- Key Purpose: Provides direct access to execute trades and manage clearing on the IIBX platform.
4. Submit TRQ Certificate (If Applicable):
- Action: If you are a TRQ holder, submit your valid TRQ Certificate to both IIBX and IIDI.
- Key Purpose: Formalizes your eligibility for concessional customs duties under the Tariff Rate Quota.
5. ICE Gate Registration:
- Action: Register your entity on the ICE Gate portal.
- Key Purpose: Mandatory for all customs clearance procedures related to your bullion imports.
6. Port Registration:
- Action: Register your TRQ at your designated import port.
- Key Purpose: Ensures proper recognition and processing of your import quota at the point of entry.
7. Engage a Custom House Agent (CHA) (Recommended):
- Action: Consider hiring a CHA to assist with customs clearance processes.
- Key Purpose: Streamlines complex import procedures and ensures compliance.
8. Connect with an IFSCA Registered Vault Partner:
- Action: Establish a relationship with an authorized vault partner in GIFT City.
- Key Purpose: Secure physical storage, delivery, and management of your imported bullion within SEZs.

Path 2: For Bullion Futures Hedgers

If your goal is to manage price risk exposure to gold and silver, follow this streamlined approach for setting up bullion trading for hedging.

1. AD Bank US Dollar Limit Sanction:
- Action: Obtain US Dollar remittance limits approved by your Authorized Dealer (AD) Bank.
- Key Purpose: Required for domestic entities to conduct USD-denominated hedging activities via IIBX Gold and Silver Futures.
2. Trading and Clearing Account Setup with IFSCA-Registered Member:
- Action: Once limits are sanctioned, open a Trading and Clearing Account with any IFSCA-registered Bullion Trading/Clearing Member.
- Key Purpose: Provides direct access to the IIBX platform for executing your hedging strategies. (Note: Direct onboarding with IIBX itself is not required for hedgers; membership with a registered entity suffices.)

By following these targeted steps, both physical traders and hedgers can efficiently navigate the process of setting up bullion trade in GIFT City and capitalize on the opportunities within the IIBX ecosystem.

Top Benefits: Importing TRQ Gold through IIBX for Bullion Trading

Setting up bullion trade in GIFT City and leveraging the India International Bullion Exchange (IIBX) offers substantial advantages, particularly for importing Tariff Rate Quota (TRQ) gold under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). These benefits are designed to streamline operations, reduce costs, and enhance efficiency for those starting bullion trading.

Unlocking Efficiency and Cost Savings in Bullion Trade

Exemption from IGCR Rule: A key benefit for bullion trade in GIFT City is the non-applicability of the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 (IGCR Rule). As per Notification No. 66/2023-Customs, if the importer and the TRQ holder are the same entity, direct import through IIBX means exemption from this rule.
Only 5% Customs Duty & No 1% Bond: Importers of TRQ gold through IIBX benefit significantly by paying only 5% customs duty. Crucially, there’s no requirement to block an additional 1% of the Customs Duty value as a bond with Customs, nor do holders need to deposit this 1% with intermediaries. This directly impacts the capital required for setting up bullion trading.
Seamless TRQ Imports for Qualified Jewellers (QJs): Qualified Jewellers can import their TRQ gold through IIBX without the need for additional re-registration for TRQ, simplifying the process of starting bullion trading.
Improved Working Capital Management: Eliminating the necessity for upfront payment of customs duty and various premiums allows businesses to manage and allocate their working capital more efficiently across all operations. This is a significant financial advantage for setting up bullion trade.
Every 30 Minutes Credit of Bullion Depository Receipts (BDRs): IIBX leads globally by crediting BDRs to clients’ Demat accounts within just 30 minutes. This facilitates same-day import of gold/silver into the Domestic Tariff Area (DTA) once BDRs are credited and customs processes are cleared, drastically speeding up bullion trade cycles.
Flexibility and Convenience in Pricing Lower Lot Sizes: IIBX contracts accommodate purchases as low as 100 grams under the UAEGDTRQ GOLD T+0 contract, and 1 Kg under other quantities. This provides unparalleled flexibility and convenience for diverse trading strategies when setting up bullion trading.
Low Transaction Charges: IIBX offers highly competitive and very low transaction charges, ensuring a cost-effective environment for all bullion trading activities.

Regulatory Landscape for Bullion Trading in GIFT City (2025)

Setting up bullion trade in GIFT City necessitates a clear understanding of its robust regulatory framework. Adherence to guidelines set by the International Financial Services Centres Authority (IFSCA) and the Ministry of Finance ensures transparent and compliant operations for all participants.

Key Regulations Governing Bullion Trade at IIBX

IFSCA & Ministry of Finance Oversight: These bodies establish the foundational rules, ensuring a secure and reliable environment for bullion trading within the IFSC.
Customs Act, 1962 & Recent Amendments: Compliance is crucial with the Customs Act, particularly amendments like Notification No. 66/2023-Customs. This notification clarified that the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022, are not applicable when the importer and TRQ Holder are the same entity, streamlining bullion trade imports.
India-UAE CEPA & TRQ Gold: The Comprehensive Economic Partnership Agreement (CEPA) with the UAE offers an annual Tariff Rate Quota (TRQ) for gold, providing a 1% customs duty concession. For Fiscal Year 2025-26, the TRQ gold quota stands at 180 tonnes, a significant incentive for setting up bullion trading.
Updated Import Duty: The import duty on TRQ Gold is set at 5%, effective from July 23rd, 2024, providing a clear cost structure for those starting bullion trading.

Hedging Gold & Silver Price Risk on IIBX

For businesses engaged in bullion trading, managing price volatility is critical. IIBX offers robust mechanisms for hedging gold and silver price risk, allowing domestic residents (excluding individuals) to secure their positions.

IIBX Gold Futures: Specifications & Benefits for Hedgers

IIBX launched Gold Futures on June 21st, 2024, with plans for Silver Futures underway, providing essential tools for setting up bullion trade with effective risk management.

Purpose: Enables domestic entities with gold/silver price exposure to effectively hedge their risk in USD.
Key Contract Specifications:
- Trading Unit: 1 Kilogram (Kg)
- Price Quote: In US Dollars per Troy Ounce
- Trading Hours: Monday to Friday, 9:00 Hrs. to 23:30 Hrs. (IST)
- Initial Margin: 6% (+1 ELM) or based on VaR (IMPOR Adjusted), whichever is higher.
- Delivery: Mandatory delivery through Bullion Depository Receipts (BDRs) at IFSCA-registered vaults in GIFT City, based on buyer and seller intention matching.

Bullion Depository Receipts (BDRs) and Efficient Settlement at IIBX

A cornerstone of bullion trade in GIFT City is the innovative Bullion Depository Receipts (BDRs) system operated by IIBX. This electronic representation of physical bullion significantly streamlines transactions and enhances efficiency for setting up bullion trading.

Understanding IIBX’s Advanced Settlement Mechanism

BDR System Explained: Physical bullion, once deposited in IFSCA-registered vaults, is converted into electronic Bullion Depository Receipts (BDRs). These BDRs facilitate paperless trading and ownership transfer.
Rapid Settlement Timelines:
- T+0 Settlement Contracts: Market hours operate from 9:00 Hrs. to 18:20 Hrs. (IST), enabling quick transactions.
- BDR Settlement: Occurs with remarkable speed, every 30 minutes, ensuring prompt crediting to Demat accounts.
- Fund Settlement: Activated multiple times daily at 12:15, 15:15, and 19:00 (IST).
100% Early Pay-in: This system mandates 100% early pay-in for both funds and securities, further enhancing transaction security and speed.
Impact on Turnaround Time (TAT): This highly efficient system drastically reduces the overall turnaround time for trade processes, enabling Qualified Jewellers to achieve same-day delivery of bullion post-credit of BDR and customs clearance. This accelerates the entire cycle for starting bullion trading.

Future Outlook: Expanding Bullion Trade in GIFT City Beyond 2025

The trajectory for bullion trade in GIFT City beyond 2025 is exceptionally positive. The combination of a proactive regulatory environment and the innovative framework of IIBX firmly positions it as a formidable global hub for precious metals.

Why GIFT City is Poised for Continued Growth in Bullion Trading

Proactive Regulatory Environment: The continuous support and adaptive regulations from IFSCA create a stable and attractive ecosystem for investment and setting up bullion trade.
Innovative IIBX Framework: With ongoing advancements in settlement processes and the planned expansion of product offerings, such as Silver Futures, the IIBX ecosystem is poised for substantial growth and increased market sophistication.
Strategic Decision for Businesses: Entities seeking to diversify portfolios, hedge against price risks, or directly import bullion will find setting up bullion trade in GIFT City an increasingly strategic and advantageous decision, offering a competitive edge in the global market.

International Bullion Exchange (IBX) at GIFT City – Complete Guide

Posted on June 30, 2025July 22, 2025 by Treelife

Introduction to IBX at GIFT City

What is the International Bullion Exchange (IBX)?

The International Bullion Exchange (IBX) is India’s pioneering platform for trading physical gold and silver. Located at GIFT City, Gandhinagar, this exchange is designed to offer an efficient, transparent, and seamless trading experience for bullion dealers, jewellers, and institutional investors. IBX plays a crucial role in providing a well-regulated marketplace for gold and silver transactions, focusing on:

Efficient Price Discovery: Ensures that market prices reflect fair value through transparent and competitive trading.
Responsible Sourcing: Guarantees that the bullion traded on the exchange adheres to ethical sourcing standards, supporting sustainable practices.
High-Quality Bullion Trading: Facilitates the buying and selling of high-purity gold and silver, meeting international quality standards.

IBX enables direct imports of gold, allowing TRQ holders to bypass intermediaries, thus eliminating additional costs and delays. The TRQ Gold import process offers a reduced 5% customs duty and removes the need for blocking a 1% customs duty bond. This provides a seamless, cost-effective way to import bullion.

The IBX Ecosystem serves as a centralized hub for bullion trading in India, enhancing the ease of gold and silver imports and exports, while also positioning India to become a significant player in global bullion markets.

Significance of IBX for India and Global Bullion Trade

India is the second-largest consumer of gold globally, making its bullion market one of the most influential in the world. Despite its high consumption, India has historically lacked control over global bullion price setting. The launch of IBX addresses this challenge and enables India to:

Position India as a Price Setter: By facilitating direct trading of bullion, IBX allows India to influence global gold and silver prices, rather than relying on international exchanges.
Enhance Global Market Integration: IBX connects India to the global bullion market, enabling international traders and institutional investors to directly participate in Indian bullion trade, thus increasing liquidity and market depth.
Boosting India’s Role in Global Bullion Trade: IBX provides India with a strategic advantage in bullion trading, reinforcing its position as a global leader in the precious metals market.

IBX further strengthens India’s position by offering TRQ holders the ability to import gold directly without intermediary steps, exempted from the IGCR rule, and only paying 5% customs duty instead of the regular rate. This unique benefit enhances India’s role in the global bullion market.

IBX’s integration into the global trading system is an essential step in India’s aspiration to be a key player in global bullion markets. With a platform that offers transparency and integrity, it stands as a pivotal milestone in India’s journey toward becoming a global bullion hub.

Overview of GIFT City and Its Role in IBX

GIFT City, short for Gujarat International Finance Tec-City, is a state-of-the-art financial district located in Gandhinagar, Gujarat. It serves as the foundation for India’s first International Financial Services Centre (IFSC). This strategic location hosts several financial institutions, including IBX, and offers a range of benefits:

Hub for Financial Services: GIFT City is designed to be a global financial services hub, attracting investors, traders, and financial institutions worldwide.
International Standards: GIFT City is built with world-class infrastructure that adheres to international standards, providing an optimal environment for IBX to operate and grow.
Seamless Regulatory Environment: The IFSCA (International Financial Services Centres Authority) regulates all operations within GIFT City, ensuring smooth operations for IBX participants and fostering trust among global investors.

The International Financial Services Centres Authority (IFSCA) regulates IBX registration process, ensuring that only qualified jewelers and registered IFSCA entities can import bullion directly through IBX. The IFSCA’s streamlined processes support both market participants and customs clearance, enabling smoother bullion imports. The strategic location, combined with advanced infrastructure, makes it an ideal place for IBX to lead India’s bullion trading sector and integrate seamlessly with global financial markets.

Role of IFSCA in Regulating IBX at GIFT City

What is IFSCA and Its Regulatory Role for IBX?

The International Financial Services Centres Authority (IFSCA) is the primary regulatory body overseeing operations within International Financial Services Centres (IFSCs) in India, including IBX at GIFT City. IFSCA ensures that all financial activities conducted in IFSCs adhere to global standards of transparency, security, and efficiency. Its role in regulating IBX is pivotal for maintaining the credibility and smooth functioning of the exchange.

Key responsibilities of IFSCA in regulating IBX include:

Ensuring Compliance: IFSCA ensures that IBX and its participants comply with all applicable regulations related to gold and silver trading, customs duties, and taxation.
Market Efficiency: The authority monitors the exchange to ensure that trading practices are efficient, transparent, and free from manipulation.
Promoting Responsible Trading: IFSCA enforces strict guidelines on responsible sourcing of bullion, ensuring that the precious metals traded on IBX meet international ethical standards.

IFSCA’s regulatory framework provides confidence to investors and market participants, ensuring that all activities on IBX are fair, secure, and compliant with global financial practices.

GIFT City as a Hub for Financial Services

Financial and Tech Services Hub: A Global Financial Center

GIFT City (Gujarat International Finance Tec-City) is India’s flagship project to develop an integrated global financial services hub. Designed with state-of-the-art infrastructure, GIFT City is set to become a central player in the global financial landscape by hosting India’s first International Financial Services Centre (IFSC), where IBX operates. This strategic location offers a wide range of services, including finance, banking, insurance, and technology, making it an attractive destination for international investors and businesses.

Key Features of GIFT City as a Financial Services Hub:

Multi-Service SEZ: GIFT City is a Special Economic Zone (SEZ) that offers a one-stop solution for all financial services, from banking to fintech, enabling smooth and cost-efficient operations for entities like IBX.
World-Class Infrastructure: GIFT City is equipped with high-quality infrastructure that supports the needs of global businesses, including financial institutions and technology firms.
Regulated by IFSCA: The IFSCA regulates all entities operating in GIFT City, ensuring adherence to international standards and fostering investor confidence.

GIFT City’s Role in IBX Growth

Enhanced Connectivity: GIFT City’s strategic location makes it an ideal gateway for global bullion trading, helping IBX attract international participants and bullion traders.
Global Financial Integration: As a hub for international financial services, GIFT City facilitates the integration of India’s bullion market with global financial systems, allowing foreign traders to easily engage with Indian bullion markets through IBX.

The Launch of IBX: A Game Changer for India’s Bullion Market

Prime Minister’s Launch of IBX

On July 29, 2022, the Prime Minister of India officially launched the India International Bullion Exchange (IBX), marking a transformative step in the country’s bullion market. This initiative aims to streamline the gold and silver trading process, empower qualified jewellers, and position India as a more influential player in the global bullion market.

The launch of IBX reflects India’s vision of becoming a key player in setting global bullion prices while addressing the long-standing challenges in the import and export of bullion. The IBX platform provides a regulated marketplace for bullion trading, offering transparency and efficiency.

As part of the TRQ onboarding process, IBX simplifies bullion imports through the Customs EDI Gateway (ICEGATE), and qualified entities can avail direct imports. Custom House Agents (CHA) can assist with the customs clearance, ensuring compliance with GST regulations and reducing time delays.

Key Benefits for Bullion Dealers and Qualified Jewellers

The India International Bullion Exchange (IBX) provides a range of benefits that make it an ideal platform for bullion dealers and qualified jewellers. From transparent pricing to flexible trading options, IBX empowers market participants to operate more efficiently in the bullion market.

1. Direct Import of Bullion

Before the introduction of IBX, qualified jewellers had to rely on intermediaries for bullion imports, which often led to higher costs and delays. With IBX, qualified jewellers can now directly import bullion, streamlining the process and reducing reliance on middlemen.

Faster Import Process: Jewellers can now directly source gold and silver from international suppliers.
Cost-Effective: Eliminates intermediaries, lowering the overall cost of imports.
Ethical Sourcing: Ensures that the bullion is sourced responsibly, in line with global OECD Due Diligence Guidance.

2. Enhanced Trading Opportunities

IBX provides bullion dealers and qualified jewellers with the ability to trade on a globally recognized platform, with the added advantage of competitive pricing.

Global Exposure: IBX connects Indian traders with global market participants, offering access to international pricing and liquidity.
Increased Trading Flexibility: Dealers can now trade in a range of gold and silver products that meet international standards.
Access to Competitive Rates: IBX offers pricing that is competitive with other international exchanges, providing an opportunity for better trading margins.

3. Transparency and Compliance

IBX operates with full regulatory oversight by IFSCA, ensuring that all transactions are conducted transparently and in compliance with international financial and regulatory standards.

Secure Transactions: Ensures that bullion transactions are safe and meet regulatory requirements.
Price Transparency: Facilitates fair price discovery through competitive and transparent market pricing.

Future Prospects of IBX in the Global Bullion Market

1. Fostering Price Discovery

As India’s first International Bullion Exchange, IBX plays a crucial role in enabling price discovery for gold and silver traded within India. By offering a transparent and accessible platform for international and domestic traders, IBX helps in setting fair market prices that reflect global demand and supply dynamics.

Market Liquidity: By connecting domestic and global buyers and sellers, IBX increases the liquidity in India’s bullion market.
Competitive Pricing: With the integration of international markets, IBX ensures that India can influence global bullion pricing.

2. New Investment Opportunities

IBX opens the door to new investment opportunities for investors, dealers, and jewellers, both domestically and internationally. The platform enables access to gold and silver trading in various contract sizes and forms, offering flexibility for different types of investors.

Investment in Bullion Financial Products: Investors can engage in a variety of financial products related to precious metals.
Global Participation: IBX attracts international investors, providing them with direct access to India’s bullion market.

3. A Hub for International Bullion Trading

IBX has the potential to become a global hub for bullion trading, bringing together traders and investors from around the world. This will help strengthen India’s position in the global bullion market, with GIFT City serving as a strategic location for global bullion trade.

How Does IBX Work?

The India International Bullion Exchange (IBX) simplifies the process of trading gold and silver by providing a transparent and efficient platform. To import bullion, TRQ holders must be registered with IFSCA, complete their ICEGATE registration, and work with Custom House Agents (CHA) for smooth customs processing. Additionally, IBX ensures that fund transfers to the clearing system are seamless, providing an efficient trading environment. Below is a clear step-by-step guide on how IBX works, from setting up accounts to executing trades.

The Process Flow for Trading on IBX

Step 1: Open a Trading Account

To start trading on IBX, the first step is to open a trading account with any registered trading member authorized by the exchange. This account will provide you with access to the IBX platform.

Requirements: Complete KYC (Know Your Customer) formalities and submit identification documents.
Purpose: The trading account gives you the ability to place buy and sell orders on the IBX platform.

Step 2: Open a Demat Account with IIDI (India International Depository IFSC Limited)

After setting up your trading account, the next step is to open a Demat account with IIDI (India International Depository IFSC Limited). This account will hold your Bullion Depository Receipts (BDRs), which represent the gold and silver traded on IBX.

Requirements: Provide your personal details and KYC documents to IIDI.
Purpose: The Demat account securely holds your BDRs, which are linked to the physical bullion stored in authorized vaults.

Step 3: Transfer Funds and Initiate Trade

Once your accounts are set up, you need to transfer funds into the IBX clearing system through an AD Bank which will issue Bullion Depository receipts. This ensures that you have the necessary capital for buying bullion.

How it Works: Transfer funds from your bank to AD Bank and deposit Bullion Depository Receipts with IBX account.
Purpose: To purchase gold and silver contracts on the IBX platform.

Step 4: Trade on the IBX Platform for Buying/Selling Bullion

With funds in your account, you can now start trading on the IBX platform. Place buy or sell orders for gold and silver at competitive market prices.

What You Need: Monitor the market, place buy/sell orders, and execute trades based on market conditions.
Purpose: To trade bullion efficiently through a transparent and competitive marketplace.

Key Players in IBX – Qualified Jewellers, TRQ Holders, and More

1. Qualified Jewellers

Qualified Jewellers are key participants in the IBX ecosystem. These entities, with a minimum net worth of ₹25 Crores, deal in precious metals and are eligible to directly trade bullion on the IBX platform.

Eligibility Criteria:
- Net Worth: ₹25 Crores.
- Focus on Precious Metals: Must deal primarily in gold and silver.
- Role: Qualified jewellers can directly import bullion and trade on IBX, eliminating the need for intermediaries.

2. TRQ Holders

TRQ Holders (Tariff Rate Quota Holders) are entities that can directly import gold through IBX. They are crucial for facilitating bullion imports into India.

Eligibility Criteria:
- Registered with IFSCA: Entities must meet regulatory requirements set by the International Financial Services Centres Authority (IFSCA).
Role: TRQ holders enable the direct import of gold, streamlining the entire process.

Advantages of IBX for Bullion Dealers and Qualified Jewellers

The India International Bullion Exchange (IBX) offers numerous advantages to bullion dealers and qualified jewellers. By providing a transparent, regulated platform, IBX is reshaping the way gold and silver are traded in India and beyond. Below are the key benefits that make IBX an attractive option for market participants.

1. Lower Transaction Costs

One of the most significant advantages of trading on IBX is the lower transaction costs compared to other global exchanges. Traditional bullion markets often involve high fees for intermediaries, customs, and trading. IBX eliminates many of these intermediaries, providing a cost-effective solution for dealers and jewellers. By eliminating intermediaries and offering direct bullion imports through the TRQ Gold process, IBX drastically reduces transaction costs. The 5% customs duty and removal of the 1% bond requirement further lower overall import costs, allowing dealers and jewellers to improve profitability.

Affordable Trading: No middlemen, meaning lower commission fees and cheaper transaction costs.
Competitive Edge: Bullion dealers and jewellers can save money on each trade, increasing their overall profitability.

By offering cost-effective trading, IBX enables market participants to trade bullion more efficiently and at competitive rates.

2. Longer Trading Hours

IBX provides extended trading hours compared to many global bullion exchanges. This feature allows dealers and jewellers more flexibility in executing trades, especially for those dealing across different time zones.

Flexible Trading Schedule: With longer market hours, IBX accommodates a wider range of trading strategies, including intraday trading and global market reactions.
24/7 Access: Traders can buy and sell bullion at any time within the platform’s operating hours, allowing them to respond quickly to market changes and global events.

These extended hours make IBX an ideal platform for traders looking for more flexibility in their trading strategies.

3. Quality Assurance

All bullion traded on IBX meets stringent international standards for quality assurance. IBX adheres to the OECD Due Diligence Guidance, ensuring that all gold and silver traded through the exchange come from responsible, conflict-free sources.

OECD Standards: IBX guarantees that the bullion traded on the platform is sourced in line with international ethical standards.
Transparency and Trust: Buyers and sellers can trust that the metals they trade are of the highest quality, which is crucial in maintaining market integrity.

This focus on quality assurance enhances the credibility of IBX and provides confidence to market participants.

4. Reliable Operational Standards

IBX ensures that all transactions are conducted under high operational standards. The exchange platform is built with security, efficiency, and transparency in mind, making it a reliable marketplace for bullion traders.

High Security: IBX uses state-of-the-art security measures to protect both user information and funds.
Efficient Operations: The platform is designed to handle high volumes of transactions, ensuring quick and reliable order execution.
Regulatory Oversight: As IBX operates under the supervision of IFSCA, it ensures compliance with Indian and international regulations, enhancing trust among market participants.

With secure and reliable operations, IBX ensures that traders can focus on maximizing profits without worrying about the integrity of the platform.

IBX Products and Trading Mechanism

The India International Bullion Exchange (IBX) offers a variety of bullion contracts and a streamlined trading mechanism designed to facilitate efficient and transparent trading of gold and silver. Below is a breakdown of the available products, market hours, and settlement types on IBX.

Gold Contracts Available on IBX

IBX offers several types of gold contracts to cater to the diverse needs of traders, jewellers, and investors. These contracts provide flexibility and competitive pricing, helping market participants make informed decisions.

Available Gold Contracts:

GOLD 995 T+0: A standard gold contract for trading 995-purity gold, available for immediate settlement (T+0).
Gold Mini 999 T+0: A smaller contract designed for 999-purity gold (suitable for retail traders), also available for T+0 settlement.
UAEGD Gold 995 T+0 (1kg, 100g): Gold sourced from UAE Good Delivery (UAEGD) accredited refiners, with options to trade in 1kg and 100g weights, available for T+0 settlement.

TRQ Gold contracts: IBX offers TRQ Gold contracts, including the UAEGD Gold 995 T+0 contract for both 100g and 1kg weights. These contracts provide flexibility for different market participants, from small jewellers to large institutional investors.

These contracts are designed to provide liquidity, transparency, and access to gold in various forms, making them suitable for a range of participants—from large institutional traders to small jewellers.

Silver Contracts Available on IBX

IBX also facilitates the trading of silver, providing a variety of contracts to cater to different trading preferences and volumes.

Available Silver Contracts:

Silver Bars and Grains: Available for T+0 settlement, these contracts provide flexibility for trading in both bars and grains.
- Silver Bars: Available in larger sizes, perfect for institutional investors.
- Silver Grains: Smaller-sized contracts suitable for jewellers and smaller investors.

The ability to trade silver in both bars and grains allows market participants to tailor their trades according to their needs and preferences, while T+0 settlement ensures quick and efficient execution.

Market Hours and Settlement Types

IBX operates with clear, defined market hours and settlement types to ensure smooth and efficient trading for all market participants.

Market Hours: 9:00 AM to 9:30 PM IST

The IBX market hours run from 9:00 AM to 9:30 PM IST, providing ample time for traders to execute their transactions within the trading day.
The extended market hours ensure that traders across different time zones can participate and react to global market conditions.

T+0 Settlement: 100% Early Pay-in of Funds and Securities

T+0 settlement ensures that all trades are settled on the same day, providing quick turnaround times for bullion trades.
This settlement type offers 100% early pay-in of funds and securities, ensuring that both the buyer and seller are secured in the transaction and the transfer is completed swiftly.

BDR Settlement: Happens Every 30 Minutes

Bullion Depository Receipt (BDR) settlement happens every 30 minutes, ensuring that trades are processed efficiently and BDRs are credited to the trader’s Demat account in a timely manner.
This frequent settlement cycle adds to the liquidity and efficiency of trading on the IBX platform.

Eligibility Criteria for Participating in IBX

IBX is designed to allow only eligible participants to engage in trading, ensuring that all market players meet specific criteria for regulatory compliance and financial stability.

1. Qualified Jewellers

Qualified Jewellers are key players in the IBX ecosystem. To participate, jewellers must meet the following criteria:

Net Worth Requirement: Jewellers must have a minimum net worth of ₹25 Crores.
Precious Metals Trading: Jewellers must deal in precious metals as per the HSN codes related to gold and silver.
Compliance: They must adhere to regulatory standards and be certified by IFSCA to ensure compliance with IBX’s operating guidelines.

2. TRQ Holders

TRQ Holders (Trade and Remittance Qualified Holders) can directly import gold through IBX, but must meet certain requirements:

IFSCA Registration: TRQ holders must be registered with IFSCA.
To participate as a TRQ holder, entities must be registered with IFSCA and comply with customs clearance procedures via ICEGATE. The eligibility criteria include adherence to international sourcing and regulatory standards.
Additional Regulatory Criteria: TRQ holders must also meet other regulatory requirements set by IBX and IFSCA, ensuring that only eligible entities can import bullion.

By ensuring strict eligibility criteria, IBX maintains a regulated and secure trading environment, fostering trust and market integrity.

How to Import Gold through IBX at GIFT City

Importing gold through the India International Bullion Exchange (IBX) at GIFT City is a streamlined process designed to facilitate efficient and direct bullion trade. Here’s a step-by-step guide for jewellers looking to import gold through IBX, ensuring a smooth and compliant experience.

Step-by-Step Guide for Jewellers

1. Open a Trading and Demat Account with IBX Partners

To begin the process of importing gold through IBX, jewellers need to open two essential accounts:

Trading Account: This account allows you to engage with the IBX platform, enabling you to execute buy and sell orders for gold and silver.
- Required Documentation: Complete your KYC (Know Your Customer) formalities and submit identification documents.
- Partnered Trading Members: Open your trading account with any IBX-approved trading member.
Demat Account: A Demat account is essential for holding Bullion Depository Receipts (BDRs), which represent the physical gold stored in the authorized vaults.
- IIDI Registration: Open your Demat account with India International Depository IFSC Limited (IIDI), which facilitates the secure storage of bullion.

2. Ensure GST Compliance and Customs Clearance

For smooth gold imports through IBX, jewellers must comply with GST regulations and complete customs clearance procedures.

GST Compliance: Ensure that you are fully compliant with Goods and Services Tax (GST) regulations. This includes registering for GST if you haven’t already and ensuring that all GST returns are filed up-to-date.
- Importance: GST compliance is necessary for all transactions involving bullion, as it ensures the smooth flow of goods and services through customs.
Customs Clearance: To import gold, you need to complete customs clearance through ICEGATE (Indian Customs EDI Gateway).
- Import Documentation: Submit the Bill of Entry and relevant documentation required by customs to ensure smooth clearance.
- Customs Handling Agent (CHA): Engage with a CHA (Customs Handling Agent) to assist with the customs clearance process and ensure that all customs duties are correctly handled.

Key Considerations for Gold Importers

TRQ Registration: For direct imports of gold, ensure that your entity is a registered Trade and Remittance Qualified (TRQ) holder with the IFSCA. This enables direct bullion imports via IBX.
To import gold, jewellers must first register for TRQ with IFSCA, complete ICEGATE registration for customs clearance, and ensure compliance with GST regulations. The TRQ holder can directly import gold, streamlining the process and minimizing intermediaries.
Storage and Security: Gold is stored in authorized vaults by IIDI, ensuring that the imported gold is safely held and easily accessible for trade.
Liquidity and Flexibility: IBX offers competitive pricing and flexibility in purchasing gold in various contract sizes, from 100g to 1kg, depending on your needs.