GIFT City is attracting global capital to India, with bond listings leading early success. Equity markets are poised to drive future growth, supported by new listing regulations. Sustainable finance is also gaining momentum, with global frameworks being adopted. The fund management sector is vibrant, facilitating both inbound and outbound investments. Commodity trading is also on the horizon.

70% of India’s ECBs routed via GIFT City; equity listings to be next big trigger: IFSCA’s Pradeep Ramakrishnan

GIFT City has steadily emerged as a key gateway for global capital flows into India, with bond listings driving much of its early success. According to Pradeep Ramakrishnan, Executive Director at the International Financial Services Centres Authority (IFSCA), nearly 70% of India’s external commercial borrowings (ECBs) are now routed through GIFT City, underscoring its growing importance in the country’s financial ecosystem.

Speaking to ETMarkets on the sidelines of GSMC Conference 2.0 in GIFT City, Ramakrishnan highlighted that the bond market at the IFSC has seen strong traction, with total issuances nearing $70 billion.

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Of this, around $17 billion has been raised through green bonds, reflecting the rising prominence of sustainable finance. Global institutions such as the World Bank, IFC, and ADB have also tapped into the platform, further reinforcing its credibility.

Equity listings to drive next phase of growth

While the bond market has laid a solid foundation, Ramakrishnan believes that the next big trigger for GIFT City’s evolution will be the development of equity markets. “For any international financial centre, equity is a critical component. It brings in investors, enhances market vibrancy, and enables the development of derivatives and other financial products,” he said.

To facilitate this, the government introduced a direct listing framework in 2024, supported by a new set of listing regulations. These norms offer significant flexibility, including shorter issue windows, reduced promoter lock-in periods of six months, and lower dilution requirements of just 10%.

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The ecosystem is gradually taking shape, with SEBI now allowing merchant bankers to set up branch offices in GIFT City—an important step in enabling smoother capital market activity. The first equity listing is expected soon and could serve as a test case for future issuances.

Unlocking global participation and dollar equity opportunities

The platform is open to both Indian unlisted companies and foreign firms, with ongoing discussions around enabling Indian listed companies to participate.

Ramakrishnan also pointed out that several global companies with Indian origins could consider listing in GIFT City.

Additionally, funds invested in Indian businesses may explore dollar-denominated equity listings as a way to unlock value, adding another dimension to capital-raising opportunities at the IFSC.

Sustainable finance gaining momentum

Sustainable finance has emerged as another strong pillar of growth for GIFT City. Instead of creating a separate domestic taxonomy, IFSCA has opted to accept globally recognized frameworks such as EU, ASEAN, and ICMA standards—making it easier for international investors to participate.

The regulator is promoting climate finance through multiple channels, including a mandate that 5% of incremental bank lending be directed towards sustainable initiatives. Green bond issuances have already seen strong traction, while incentives such as fee waivers for early ESG funds are encouraging broader participation.

Further initiatives, including a transition bond framework and a blended finance model, are also in the pipeline to deepen the ecosystem.

Fund management ecosystem driving global integration

The fund management segment remains one of the most vibrant areas within GIFT City, with nearly 300 funds operating in the IFSC. These funds have played a significant role in channeling capital into Indian businesses, particularly startups and venture capital opportunities.

Interestingly, GIFT City is now facilitating both inbound and outbound investments, with capital flowing in from over 70 countries and being deployed across nearly 30 global markets. This shift signals its transition from a domestic financial hub to a globally integrated platform.

Commodity trading and future roadmap

Looking ahead, IFSCA is also working to expand into international commodity trading through Project ACE (Activating Commodity Ecosystem). The initiative aims to classify commodities as financial instruments, enabling global trading activities to be conducted from GIFT City.

Once implemented, this could open up new avenues for brokers and traders to participate in international commodity markets.

Policy support and long-term vision

Ramakrishnan emphasized that while tax incentives act as an initial draw, the real strength of GIFT City lies in policy certainty. The government has provided long-term visibility with tax benefits extending up to 20 out of 25 years, followed by a stable tax regime thereafter.

At the same time, IFSCA continues to focus on strong regulatory environment, ensuring investor protection and operational transparency. “We are not a tax haven, but a well-regulated jurisdiction built on substance,” he noted.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times)

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