GIFT CITY Updates: July-September 2025 - Quarterly Newsletter

Introduction

Gujarat International Finance Tec-City ("GIFT City") in Gujarat is India's first operational smart city and the country's only International Financial Services Centre ("IFSC"). Conceived as a global financial and technology hub, GIFT City provides an integrated ecosystem with single-window clearances, competitive tax structures, and progressive policies, making it attractive for both domestic and international businesses.

The IFSC enables onshore and offshore financial services and operates under the unified oversight of the International Financial Services Centres Authority ("IFSCA"), established in 2019. IFSCA consolidates the powers of RBI, SEBI, IRDAI, and PFRDA into a single regulator, offering efficiency, transparency, and innovation-driven governance.

GIFT City today hosts more than 400 companies, including 35 banking units, more than 100 asset-management/fund management entities, along with major insurers and fintech players. Institutions such as BSE, NSE, Standard Chartered, State Bank of India, and JP Morgan have established a presence, underscoring its growing global relevance. Ranked 46th in the Global Financial Centres Index (2025), GIFT City leads in reputational advantage and is emerging as a launchpad for foreign universities and global trading hubs. With its surging company count, integrated infrastructure, and policy-driven growth, GIFT City is consolidating its position as India's foremost IFSC and a rising international centre for cross-border finance and innovation.

JULY

IFSCA Introduces (Fund Management) (Amendment) Regulations, 2025

IFSCA through its notification dated July 24, 2025, has issued the IFSCA (Fund Management) (Amendment) Regulations, 2025, and has included provision regarding Third-Party Fund Management Services/Arrangements. This will enable a Registered Fund Management Entity ("FME") to launch and manage schemes on behalf of another entity, referred to as a third-party fund manager. The FME can provide the Services to such third-party fund managers: (i) that are incorporated in India, IFSC, or a foreign jurisdiction; (ii) with adequate resource allocation to discharge its functions; (iii) the responsible persons have requisite experience; and (iv) the third party and all its key managerial personnel including officers, directors, partners, and controlling shareholders must fulfil 'fit and proper' criteria laid down under FM Amendment Regulation.

IFSCA 'Working Group' Submits Report on Alternate Risk Transfer Mechanisms O

n July 30, 2025, the Working Group constituted by IFSCA to examine Alternate Risk Transfer ("ART") arrangements submitted its report to the Authority's Chairperson. The Working Group, chaired by Shri G. Srinivasan, MD & CEO of Galaxy Health Insurance and former CMD of New India Assurance, was established against the backdrop of rising catastrophic risks linked to climate change and rapid urbanization. The Group assessed the feasibility of issuing insurance-linked securities ("ILS"), including catastrophe bonds, from GIFT IFSC. Its mandate covered a review of global ART frameworks, regulatory practices in leading jurisdictions such as Bermuda, Singapore, and Hong Kong, and recommendations for introducing ART structures in India. The report identifies GIFT IFSC's potential to emerge as a regional hub for ILS and proposes measures including the creation of Special Purpose Insurers (SPIs), a regulatory framework for ILS issuance, permitting ART risk acceptance under IFSCA and IRDAI oversight, limiting ILS sales to Qualified Investors, and establishing robust disclosure and reporting requirements.

IFSCA Notifies TechFin and Ancillary Services Regulations, 2025

The IFSCA has notified the TechFin and Ancillary Services Regulations, 2025. These regulations establish a comprehensive framework for entities offering TechFin and Ancillary Services in support of financial services under the IFSCA Act, 2019. Key provisions include mandatory registration via the Single Window IT System, eligibility and "fit and proper" criteria for applicants, a Code of Conduct, operational norms including permitted foreign currencies, and restrictions on service types. Existing entities authorised under prior circulars must complete registration within 12 months, extendable up to 24 months. The regulations include detailed Schedules: the First and Second Schedules enumerate permissible Ancillary and TechFin services, while the Third Schedule lists prohibited services.

IFSCA Issues Guidelines on Ascertaining KMP Eligibility in Accordance with Regulation 7 of the IFSCA (Fund Management) Regulations, 2025 ("FM Regulations")

On July 25, 2025, the IFSCA issued guidelines on ascertaining the eligibility of Key Managerial Personnel ("KMPs"), including Principal Officers ("POs") and Compliance Officers ("COs"), under Regulation 7 of the IFSCA (Fund Management) Regulations, 2025. These guidelines aim to provide clarity and consistency for Fund Management Entities ("FMEs") operating in the IFSC while making KMP appointments. Key eligibility criteria include educational qualifications such as a professional or postgraduate degree in finance, law, economics, or related fields, with a relaxation for POs having over 15 years of relevant experience. A minimum of five years' experience in securities markets or financial products is required, with up to two years of consultancy experience considered eligible. Roles in regulated entities such as AIFs, mutual funds, broker-dealers, CRAs, MIIs, and financial sector regulators (including foreign equivalents) qualify, whereas experience in non-core areas such as IT or proprietary trading is excluded. FMEs are advised to seek prior confirmation from IFSCA on KMP eligibility. In case of rejection, reapplication is permitted subject to the applicable KMP fee. These guidelines enhance transparency and regulatory alignment for senior appointments in fund management operations at GIFT IFSC.

IFSCA Issues Guidance on submission of requests pertaining to changes requiring prior approval/ intimation to the Authority.

On July 1, 2025, IFSCA issued a Circular providing detailed guidance for Finance Companies and Finance Units regarding submission of requests that require prior approval or intimation under the International Financial Services Centres Authority (Finance Company) Regulations, 2021. The circular outlines the process, mandatory documentation, and applicable fees for requests relating to management or control changes, name changes, expansion of activities, voluntary surrender of registration, and pre-facto waivers or exemptions. It specifies the relevant IFSCA divisions for submission based on the request type and prescribes supporting documents including formal request letters, board resolutions, shareholding details, financial statements, and compliance confirmations. To standardize submissions, the circular includes annexures with templates such as the Information on Management form and Voluntary Surrender form. The guidance aims to enhance transparency, uniformity, and regulatory compliance, while facilitating ease of doing business for regulated entities operating in the IFSC.

IFSCA issues Framework for Transition Bonds

The IFSCA, vide Circular dated July 29, 2025, has notified the Framework for Transition Bonds in GIFT-IFSC. This framework aimed at enabling "hard-to-abate" industries to raise capital for their low‑carbon transition and align with the country's net‑zero commitments. Transition Bonds have been formally recognized as ESG‑labelled securities under the IFSCA (Listing) Regulations, 2024. The framework draws upon international best practices, public comments, and the recommendations of the Expert Committee on Climate Finance. It requires issuers to deploy proceeds exclusively toward "transition activities," as defined in global taxonomies such as the EU Taxonomy and IEA roadmaps. To ensure integrity and investor confidence, issuers must submit Paris‑aligned transition plans that cover governance, risk management, and stakeholder engagement. Independent assessments through Second Party Opinions or certifications are mandatory, together with granular disclosures on emissions targets, Cap-Ex trajectories, and use of carbon offsets, aligned with SBTi and ISSB standards. The IFSCA also encourages the adoption of digital MRV tools for transparency. This regulatory framework aims to unlock ESG capital flows toward India and emerging markets by facilitating scientifically aligned, credible climate transition pathways for industries currently lacking access to green finance.

AUGUST

IFSCA Issues Revised Regulatory Framework for Global Access in IFSC

The IFSCA has, vide its circular dated 12 August 2025, introduced a revised regulatory framework for Global Access in the IFSC. This framework consolidates and clarifies the conditions under which Indian and foreign investors may participate in global financial markets through the IFSC. The Circular applies to Global Access Providers, as well as broker-dealers and clients accessing international markets directly or indirectly through GAPs. This Circular supersedes IFSCA's earlier circulars dated 25 November 2021 and 6 June 2024 on Global Access.

Central Bank of India Secures RBI Approval to Establish IBU at GIFT City

The Central Bank of India has received approval from the RBI to establish an International Financial Services Centre Banking Unit ("IBU") within GIFT City, Gandhinagar. An IBU is essentially a branch of a bank set up within an IFSC to carry out permissible banking activities, typically catering to the needs of international clients, such as global corporations, financial institutions etc. Once IBU approval is granted by the IFSCA the bank can establish and operate a branch within an IFSC, such as GIFT City. The said approval of Central Bank of India marks a significant milestone in the Bank's growth journey, enabling it to expand its international banking footprint and diversify its service offerings. The proposed IBU will provide the Bank with direct access to global financial markets and strengthen its ability to serve corporate clients with foreign currency funding requirements. It will offer a suite of specialised services including foreign currency loans, trade finance, treasury operations, and risk management products, along with tailored solutions for cross-border transactions.

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