GIFT City Is Winning… But Only Half the Battle

India created GIFT City (Gujarat International Finance Tec-City) to become a global financial hub.The results are encouraging. More international banks, investment funds, insurers, and financial institutions are setting up operations there.But while GIFT City is becoming a preferred gateway for foreign investment into India, it has not yet become the preferred route for Indian families investing globally.

Where GIFT City Is Succeeding

Earlier, many foreign investors used jurisdictions like Singapore or Mauritius to invest in Indian markets.Today, GIFT City offers a regulated Indian alternative.Foreign investors can set up funds in GIFT City and invest into Indian companies through a globally recognized framework regulated by the International Financial Services Centres Authority (IFSCA).This helps keep more financial activity, jobs, and expertise within India.

Why Outbound Investing Is Still Challenging

The biggest challenge is that resident Indians investing abroad must comply with the Liberalised Remittance Scheme (LRS).Key numbers:
An individual resident can remit up to US$250,000 (about ₹2.1 crore) per financial year under LRS.For most individuals, this is sufficient.However, for ultra-high-net-worth families or family offices looking to build global portfolios worth tens or hundreds of millions of dollars, this limit can become restrictive.In addition, investors often face more complex tax, compliance, and structuring requirements than they would in established international financial centres.

Why Many Wealthy Families Still Choose Singapore

Many Indian family offices continue to operate through Singapore because it offers:

• Clear and stable regulations
• A mature ecosystem of global banks, investment managers, legal firms, and tax advisors
• Easier access to international investment opportunities

While GIFT City is developing rapidly, many global investors still view Singapore as a more established base for managing worldwide investments.

What's Next for GIFT City?

GIFT City has shown India can build a top-level financial centre.
Now, the goal is to make it just as good for investing outside India.

What would help:

• Clearer rules
• Simpler paperwork
• More freedom to invest globally

If these changes happen, wealthy Indians may prefer GIFT City over places like Singapore or Dubai.The big picture: GIFT City could go from attracting foreign money into India to also helping Indian money grow worldwide.