GIFT City Newsletter | July 2026

Welcome to the July 2026 edition of the GIFT IFSC Newsletter, highlighting key legal, regulatory, and market developments across India’s International Financial Services Centre ecosystem. This edition captures significant initiatives aimed at strengthening GIFT IFSC’s position as a global financial and business hub, including reforms across banking, capital markets, fund management, insurance, leasing, fintech, and cross-border financial services. 

The GIFT International Financial Services Centre ("GIFT IFSC"), established in Gandhinagar, Gujarat, is India's first international financial services centre with the intent of catering to global MNCs and financial institutions in alignment with international standards of business. To ensure that the utmost benefits can be provided, the entire zone has been equipped with world-class infrastructure akin to global standards. This newsletter navigates the journey of GIFT IFSC and the International Financial Services Centres Authority ("IFSCA") set up under the International Financial Services Centres IFSCA Act, 2019. 

IFSCA, as a unified regulator, is also headquartered at GIFT IFSC and is committed to providing a sound and well-structured regulatory environment by providing a single window clearance system. The IFSCA has been able to achieve this through the unification of the powers previously held by four separate regulators: the Reserve Bank of India ("RBI"), the Securities and Exchange Board of India ("SEBI"), the Insurance Regulatory and Development Authority of India ("IRDAI"), and Pension Fund Regulatory and Development Authority of India ("PFRDAI").

This newsletter offers transactional updates, including a bird's eye view of legal and regulatory updates related to the GIFT IFSC.

Debt Market at IFSC: Landscape, Trends and Outlook 2025-26

July 31, 2026: The IFSC debt market recorded US$5.20 billion across 30 listings in FY2025–26, taking cumulative debt listings to US$70.31 billion, with US$49.20 billion outstanding as of March 2026. Over 99% of listings were USD-denominated and all issuances were through private placements. The year also marked the first debt listing by a foreign corporate issuer, DFCC Bank PLC, Sri Lanka, and the first debt issuance by an IFSC-based Treasury Centre, with ReNew Treasury IFSC raising US$600 million through a green bond.

DLL Analysis: The developments reflect growing international participation and diversification of issuers, reinforcing IFSC’s emergence as a cross-border debt financing hub.

Source: GIFT IFSCA website [Report- Debt Market at IFSC, dated 31 July 2026]

IFSCA Amends Internet Banking Requirements for IBUs

July 31, 2026: IFSCA has amended its December 29, 2025, and June 30, 2026, circulars on internet banking services for International Banking Units (“IBUs”) by providing a one-time extension of the compliance deadline to September 30, 2026. From October 1, 2026, IBUs that remain non-compliant will be required to cease onboarding new customers for the affected liability products.

DLL Analysis: The extension recognises the operational implications of the RBI’s FCNR(B) swap facility for IBUs and gives them additional time to comply with the liability-product requirements. By linking continued customer onboarding to compliance from October 1, 2026, IFSCA ensures that the underlying compliance requirements remain effective.

Source: GIFT IFSCA website [Circular e.F.No. IFSCA-FMPP0BR/5/2024-Banking/2, dated July 31, 2026]

Artificial Intelligence in the GIFT IFSC - Survey Report 2026

July 30, 2026: An IFSCA survey of regulated entities operating in GIFT IFSC found that Generative AI is the most widely explored technology, with 65% of entities actively exploring it. Adoption is concentrated in risk and compliance functions and internal operations, with 82% of entities citing operational efficiency and process automation as the primary driver. Key concerns raised by respondents included data privacy, regulatory uncertainty and data quality, with entities seeking greater regulatory clarity from IFSCA on AI governance.

DLL Analysis: The survey provides the first systematic picture of AI adoption within GIFT IFSC, reflecting the risk-sensitive nature of early adoption. Read alongside IFSCA’s June 2026 advisory on frontier AI cybersecurity risks, the findings indicate that regulatory attention is increasingly tracking operational adoption, with data privacy and regulatory uncertainty likely to inform principles-based AI governance.

Source: GIFT IFSCA website [Survey Report 2026, dated July 30, 2026]

IFSCA’s 29th Authority Meeting: Key Regulatory Developments

July 28, 2026: The IFSCA’s 29th Authority Meeting approved a series of regulatory measures aimed at strengthening market integrity, increasing flexibility for fund managers, developing financial market infrastructure and streamlining the regulatory framework for international education in GIFT IFSC. Key developments include:

• Market Abuse Framework: The Authority approved the IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026, introducing a unified framework addressing insider trading, fraudulent and manipulative practices and other forms of market abuse in securities markets.
• Fund Management: Amendments to the IFSCA (Fund Management) Regulations, 2025 provide greater operational flexibility to FMEs. Key changes include permitting annual NAV computation for certain close-ended Restricted Schemes with investor approval, increasing the contribution limit for FMEs and their associates with Indian beneficial ownership from 10% to 25% for schemes investing exclusively in the IFSC or foreign jurisdictions, and extending the annual report submission timeline from four to six months. The amendments also introduce enhanced disclosures for Retail Schemes and greater flexibility for VC and FoF structures.
• Blended Finance and Differential Distribution: The Authority approved a framework permitting Restricted and Venture Capital Schemes to issue multiple classes of units with differential distribution rights, including junior/subordinate units capable of absorbing greater losses or receiving lower returns. The framework is intended to facilitate mobilisation of private capital towards developmental and sustainability-oriented projects.
• Electronic Trading Platforms: A dedicated framework for Electronic Trading Platforms (ETPs) was approved to facilitate technology-driven trading venues while establishing governance, transparency and market-integrity requirements.
• International Branch Campuses: The Authority approved the revamped draft IFSCA (Setting up and Operation of International Branch Campuses) Regulations, 2026, proposed to replace the 2022 framework. The revised framework introduces the Foreign Higher Educational Institution (FHEI) concept, formally recognises the Academic Infrastructure Service Provider (AISP) model, requires applications to be routed through the SWIT Portal and introduces a dedicated grievance redressal mechanism. IBCs may also receive fees in INR, subject to conversion into permitted foreign currencies within the prescribed timeline.

DLL Analysis: The measures collectively reflect IFSCA’s effort to expand regulatory flexibility while strengthening market integrity. The differential distribution framework is particularly significant in enabling tailored risk-return structures and supporting blended-finance investments, while the market abuse and ETP frameworks strengthen the institutional infrastructure for a deeper IFSC securities market.

Source: GIFT IFSCA website [29th IFSCA Authority Meeting dated 24.7.2026 dated 28 July 2026] 

IFSCA Proposes Independent Arbitration Centre at GIFT IFSC

July 24, 2026: IFSCA is considering the establishment of an independent arbitration centre at GIFT IFSC, with an expert committee constituted to examine the proposal. The proposed centre is intended to strengthen dispute resolution and improve the ease of doing business in GIFT City, with its establishment currently under consideration by the Government.

DLL Analysis: An independent arbitration mechanism could provide a more specialised dispute-resolution avenue for businesses operating in GIFT City, reducing reliance on commercial courts and improving the ease of resolving commercial disputes.

Source: Business Standard [July 24, 2026]

Consultation Paper on the Draft ‘IFSC Depositor Education and Awareness Fund (IDEA Fund) Scheme, 2026’

July 23, 2026: The IFSCA Consultation Paper on the Draft IFSC Depositor Education and Awareness Fund (IDEA Fund) Scheme, 2026 proposes a framework for handling unclaimed deposits of Banking Units in the IFSC under Section 26A of the Banking Regulation Act, 1949. Under the proposed Scheme, deposits remaining unclaimed or inoperative for 10 years or more would be transferred to the IDEA Fund. The transfer would not extinguish the depositor’s claim. Upon a subsequent claim, the Banking Unit would repay the depositor and seek reimbursement from the Fund. Amounts in currencies other than USD would be converted into USD at the prevailing exchange rate at the time of transfer.

DLL Analysis: The Scheme establishes a formal mechanism for centralising unclaimed IFSC deposits while preserving depositor rights. Its multi-currency transfer mechanism is particularly relevant to IFSC Banking Units, while the continuing claim and refund mechanism ensures that transfer to the Fund does not prejudice the depositor’s underlying entitlement.

Source: GIFT IFSCA website [Consultation Paper on the Draft ‘IFSC Depositor Education and Awareness Fund (IDEA Fund) Scheme, 2026’, dated July 23, 2026]

Framework on Capital Relief and Prudential Requirements for Factoring Transactions

July 21, 2026: IFSCA issued the Framework on Capital Relief and Prudential Requirements for Factoring Transactions, applicable to Finance Companies (“FCs”) and Finance Units (“FUs”) registered under the IFSCA (Finance Company) Regulations, 2021, and undertaking factoring business in the IFSC. For FUs, capital relief is available subject to recognition by the home regulator of the parent entity.

The framework permits capital relief against eligible credit insurance or guarantees, with the protected portion of a factoring exposure assigned the risk weight applicable to the protection provider, where lower than that of the underlying counterparty. The framework also recognises a similar treatment for two-factor transactions, permitting the export factor to apply the import factor’s risk weight to the covered exposure. Eligible protection providers include sovereigns, Export Credit Agencies, Multilateral Development Banks, banks and prudentially regulated financial institutions.

The framework further prescribes exposure treatment based on the nature of the factoring transaction and introduces NPA recognition thresholds for factored receivables. The standard threshold is more than 90 days past due, with a 180-day threshold for FCs below US$150 million in asset size and a lower-of-180-days-or-home-regulator threshold for similarly sized FUs.

DLL Analysis: The framework provides greater regulatory certainty on the capital treatment of factoring exposures, allowing eligible credit protection to reduce risk-weighted exposure where the protection provider carries lower credit risk. This may improve capital efficiency for IFSC-based factoring businesses while retaining prudential safeguards through prescribed eligibility and enforceability conditions. The differentiated exposure and NPA treatment also provide greater clarity in structuring factoring transactions and assessing their prudential implications.

Source: GIFT IFSCA Website [Circular e.F.No. IFSCA-FCR0ITFS/2/2024-Banking, dated July 21, 2026]

Consultation Paper on Expansion of Jurisdictions for Distribution Activities

July 17, 2026: The Consultation Paper on the Proposal to Expand List of Jurisdictions for Distribution Activities proposes expanding the jurisdictions from which capital market products may be distributed to retail investors through IFSC-registered distributors.

• Existing Framework: Under the IFSCA (Capital Market Intermediaries) Regulations, 2025 and the Master Circular for Distributors, products from India, the IFSC and specified Identified Foreign Jurisdictions may be distributed to all investors. Products from other foreign jurisdictions are restricted to sophisticated investors. The existing list comprises the US, Japan, South Korea, UK, France, Germany and Canada.
• Proposed Expansion: IFSCA proposes adding the UAE, Singapore, Australia and the European Union (excluding Croatia) to the list of jurisdictions permitted for retail distribution. This would, in particular, enable retail access to products from major fund domiciles such as Luxembourg and Ireland, which are currently outside the permitted list.
• Regulatory Basis: The proposed expansion is aligned with jurisdictions recognised under IFSCA’s existing V-CIP framework, while distribution would remain subject to the regulatory requirements applicable in the issuer’s and client’s jurisdictions.

DLL Analysis: The proposal represents a shift towards a jurisdiction-based risk assessment linked to existing customer-identification standards, rather than restricting retail distribution to a narrowly prescribed set of markets. Extending retail access to Luxembourg and Ireland is particularly significant given their established fund ecosystems and could materially broaden the range of products available through IFSC distributors while retaining jurisdictional compliance safeguards.

Source: GIFT IFSCA website [Consultation Paper on the Proposal to Expand List of Jurisdictions for Distribution Activities, dated July 17, 2026]

IFSCA Advisory on FATF Updates on High-Risk and Monitored Jurisdictions

July 17, 2026: IFSCA issued an advisory on the latest FATF updates concerning jurisdictions with strategic deficiencies in their AML/CFT frameworks. FATF has called for countermeasures against DPRK and Iran and enhanced due diligence in respect of Myanmar. Bosnia and Herzegovina and Iraq have been added to the jurisdictions under increased monitoring, while Algeria and Namibia have been removed. IFSCA has advised regulated entities to incorporate these updates into their AML/CFT/CPF frameworks and apply a risk-based approach, while clarifying that FATF designation does not, by itself, prohibit legitimate business or trade with the identified jurisdictions.

DLL Analysis: The advisory reinforces a risk-based approach to FATF designations, requiring regulated entities to calibrate customer and transaction due diligence to the level of jurisdictional risk rather than treating such designations as an automatic prohibition on transactions.

Source: GIFT IFSCA website [Press Release in accordance with June 19, 2026, Call for action]

Amendment to Master Circular for Credit Rating Agencies

July 16, 2026: The Amendment to the Master Circular for Credit Rating Agencies (CRAs) introduces changes to the regulatory framework for CRAs in the IFSC, expanding regulatory coverage, strengthening process documentation and enhancing procedural safeguards.

• Scope: The framework now expressly covers issuer ratings, alongside ratings of financial instruments. “Credit ratings” has also been broadened to cover credit quality ratings and similar services, while Financial Strength Rating has been introduced as a specific category.
• Record-Keeping: CRAs must maintain records sufficient to enable complete reconstruction of the rating process, including material considerations, analytical reasoning and arguments for and against a rating. Records must also be retained from the date of withdrawal or discontinuation of a rating.
• Issuer Review: Before disseminating a rating action, CRAs must provide issuers an opportunity to review the critical information and principal considerations underlying the rating and identify material factual errors or omissions. This requirement does not apply to unsolicited ratings or private credit rating assignments.
• Confidentiality: Website dissemination of rating actions and rationales is no longer mandatory for private credit rating assignments, recognising the confidential nature of such engagements.

DLL Analysis: The amendments strengthen oversight of CRA decision-making by requiring a re-constructible record of the analytical basis for each rating and giving issuers a limited opportunity to correct material factual errors before dissemination. Importantly, the issuer review does not compromise CRA independence, as it is confined to factual inaccuracies rather than the substantive credit assessment. The exemption for private assignments also appropriately preserves confidentiality where public dissemination is not intended.

Source: GIFT IFSCA website [Circular e.F.No. IFSCA-CMIR/1/2026-CMIR, dated July 16, 2026]

Expert Committee Recommends Regulatory and Tax Reforms for REITs and InvITs in IFSC

July 15, 2026: IFSCA released the Report of the Expert Committee on Development of REITs and InvITs in IFSC, recommending regulatory, tax and legal reforms to deepen the IFSC’s real estate and infrastructure investment market. The report proposes amendments to the IFSCA (Fund Management) Regulations, 2025, including:

• Sponsor and Management Flexibility: Introduction of “Inducted Sponsors” and “Re-Designated Sponsors”, with a framework for professionally managed, self-sponsored investment managers, to facilitate sponsor exits and transitions in ownership and management.
• Capital Raising: Introduction of fast-track rights issues for established trusts and subordinate units with differentiated voting or distribution rights.
• FEMA and FDI: Exemption of IFSC sponsors from the overseas portfolio investment limit and greater flexibility for foreign investment into IFSC REITs/InvITs, including proposed exemptions from applicable sectoral caps and lock-in requirements.
• Cross-Listing: Enabling domestic REITs and InvITs to access IFSC exchanges through mechanisms such as dual listing or depository receipts.
• Taxation: Extension of “business trust” status under the Income Tax Act to IFSC-registered trusts and tax treatment for foreign-sourced income distributed to non-resident investors.
• New Structures: Introduction of mortgage REITs and a principles-based framework for green REITs, supported by asset eligibility, disclosure and anti-greenwashing safeguards.

DLL Analysis: The recommendations seek to address structural constraints that currently affect the commercial viability and scalability of REITs and InvITs established in IFSC, particularly sponsor flexibility, capital raising, cross-border investment and tax treatment. The proposed changes to FEMA, FDI and cross-listing rules could also facilitate greater movement of assets and capital between domestic and IFSC markets.

Tax treatment is particularly significant; the proposed extension of business trust status and treatment of foreign-sourced income would determine whether IFSC trusts can achieve tax outcomes comparable to their domestic counterparts. As these measures remain recommendations, their implementation would require corresponding amendments to the relevant statutory and regulatory frameworks.

Source: GIFT IFSCA Website [Report of the Expert Committee on Development of REITs and InvITs in IFSC dated July 15, 2026]

SBI Raises US$200 Million Through Bond Tap-In

July 14, 2026: State Bank of India (SBI) has raised an additional US$200 million through a tap-in of its existing three-year senior unsecured floating-rate bond issue maturing in July 2029. The bonds, issued through SBI’s London branch, are listed on the GIFT IFSC exchanges.

DLL Analysis: The transaction illustrates the use of GIFT IFSC exchanges for listing foreign-currency debt securities issued through an overseas branch, including additional securities issued under an existing offshore bond issue.

Source: The Economic Times [July 14, 2026]

Consultation Paper on the Regulatory Framework  for Direct Listing Without Public Offer

July 13, 2026: IFSCA released a consultation paper proposing a framework under Regulation 40 of the IFSCA (Listing) Regulations, 2024 for listing equity shares and convertible securities on recognised stock exchanges in IFSC without a public offer.

The proposed framework would allow eligible issuers to list without a fresh public issuance, subject to specified eligibility, disclosure and market integrity requirements. Key features include:

• Eligibility: An issuer must satisfy at least one of the following on a consolidated basis:
  • operating revenue of at least US$20 million in the last financial year or averaged over the preceding three financial years;
  • pre-tax profit of at least US$1 million in the last financial year or averaged over the preceding three financial years; or
  • post-listing market capitalisation of at least US$50 million.
• Disclosure and Due Diligence: Issuers would file an Information Document containing material information through an IFSCA-registered investment banker, who would undertake due diligence and submit a due diligence certificate to IFSCA and the recognised stock exchange.
• Price Discovery: The reference price would be based on a valuation report by an independent registered valuer using internationally accepted methodologies, with a special pre-open call auction on the first trading day to establish the equilibrium market price.
• Public Shareholding: While the public offer and allotment requirement under Rule 19(2)(b) of the SCRR would not apply, issuers would be required to maintain a continuous minimum public shareholding of 10%.

DLL Analysis: The proposal introduces a distinct route to IFSC listing without the issuance and distribution requirements associated with a conventional public offer. The Information Document, investment banker-led due diligence and valuation-based price discovery mechanism retain substantive disclosure and market integrity safeguards despite the absence of an offer document.

The proposed US$50 million market capitalisation threshold also addresses the potentially greater liquidity and price-discovery challenges of a listing without a public issuance. The framework could therefore provide established companies seeking public market access without a conventional IPO with an alternative listing route while retaining minimum public shareholding and disclosure requirements.

Source: GIFT IFSCA Website [Consultation Paper on the Regulatory Framework for Direct Listing Without Public Offer, dated July 13, 2026]

Government Exempts GIFT IFSC Units from Licensing Requirement for Chartering Foreign Vessels

July 10, 2026: The Government has exempted units established in GIFT IFSC from the requirement to obtain a licence from the Director General of Shipping for chartering foreign vessels for EXIM and international trade operations. The exemption has been notified by the Ministry of Ports, Shipping and Waterways under the Coastal Shipping Act, 2025, with immediate effect. The exemption is limited to the licensing requirement under Section 11 and does not alter the existing framework governing coastal trade or cabotage.

The reform is expected to facilitate ship leasing, ship financing and ship-owning structures through GIFT IFSC by reducing regulatory friction in international maritime operations. It also supports the development of a broader maritime finance ecosystem encompassing maritime asset management and related financial services.

DLL Analysis: The exemption removes a specific regulatory barrier to conducting international maritime business through GIFT IFSC, strengthening the legal infrastructure for ship leasing and maritime finance. By retaining the existing cabotage framework while carving out the Section 11 licensing requirement for eligible IFSC units, the reform provides targeted regulatory flexibility without altering the broader coastal shipping regime. This may improve GIFT IFSC’s competitiveness as a jurisdiction for internationally oriented maritime financing and leasing activities.

Source: LiveMint [July 10, 2026]

Punjab & Sind Bank Receives IFSCA Licence to Establish IBU at GIFT IFSC

July 08, 2026: Punjab & Sind Bank has received a licence from the International Financial Services Centres Authority (IFSCA) to establish an IFSC Banking Unit (IBU) at GIFT IFSC. The proposed IBU will provide foreign currency banking, trade finance and other international financial services to corporates, financial institutions, importers and global investors.

DLL Analysis: The licence enables Punjab & Sind Bank to undertake cross-border banking and trade-finance activities from GIFT IFSC, expanding the availability of foreign-currency financing through the IFSC.

Source: BFSI [July 08, 2026]

Consultation Paper for issuing Circular on Foreign Currency Settlement System (FCSS) to International Banking Units (IBUs) in GIFT IFSC

July 7, 2026: The IFSCA Consultation Paper on the proposed Circular for the Foreign Currency Settlement System (FCSS), issued on July 7, 2026, proposes measures to strengthen real-time USD settlement among International Banking Units (IBUs) in GIFT IFSC. The FCSS, launched on October 7, 2025, and operated by CCIL IFSC, currently enables USD transactions between member IBUs to be settled within approximately 5-6 seconds.

Key Proposals

• Mandatory FCSS settlement: Member IBUs would be required to settle inter-bank transactions with other member IBUs exclusively through the FCSS, while non-member IBUs would be encouraged to complete onboarding within a specified timeframe.
• Customer credit timeline: IBUs would be required to credit customers within one hour of the relevant credit appearing in the IBU’s FCSS Settlement Ledger Account.
• Customer access and disclosure: IBUs would be required to inform customers of the availability of real-time USD payments and integrate FCSS as an option across internet banking and other relevant interfaces. Product sheets and websites would also need to provide information on participating banks, GFCS codes, transaction windows, cut-off times and applicable charges.

DLL Analysis: The proposed framework moves the FCSS from an available settlement infrastructure towards a mandatory inter-IBU settlement channel, which could materially reduce dependence on correspondent banking arrangements and associated settlement delays. The one-hour customer-credit requirement also introduces a defined operational obligation on IBUs, linking the system’s real-time settlement capability to the customer-facing payment experience. The accompanying disclosure requirements strengthen transparency and customer access, supporting wider adoption of the FCSS within the IFSC.

Source: GIFT IFSCA website [Consultation Paper for issuing Circular on Foreign Currency Settlement System to International Banking Units in GIFT IFSC, dated July 7, 2026]

Artha Bharat Launches Physical Gold Fund in GIFT IFSC

July 3, 2026: Artha Bharat Investment Managers IFSC LLP has launched the Artha Bharat FinMet Physical Gold Fund, which it claims is GIFT IFSC’s first physical commodity and IFSCA-authorised gold fund. The fund will invest at least 95% in LBMA-standard gold bars traded through IIBX and stored in IFSCA-regulated, IIDI-insured vaults, with investors able to redeem in physical gold or cash.

DLL Analysis: The fund marks an important development in commodity-backed investment products within GIFT IFSC. Its use of IIBX and IFSC-regulated vault infrastructure, coupled with physical redemption, could support greater institutional participation and strengthen GIFT IFSC’s emerging bullion-finance ecosystem.

Source: The Business Line [July 03, 2026]

IFSCA-Japan FSA Exchange of Letters on Regulatory Cooperation

July 2, 2026: On June 26, 2026, the International Financial Services Centres Authority (IFSCA) and Japan’s Financial Services Agency (FSA) entered into an Exchange of Letters (EoL) to establish a framework for regulatory cooperation. The EoL provides for exchange of information on the regulation and supervision of financial products, services and institutions, sharing of regulatory and supervisory developments, and exchange of knowledge and best practices between the two authorities. The EoL was exchanged in New Delhi during the 16th India-Japan Annual Summit and announced by IFSCA on July 2, 2026.

DLL Analysis: The EoL strengthens the institutional basis for supervisory cooperation, particularly by facilitating regulatory information-sharing and coordination on supervisory practices. Its significance is primarily supervisory rather than substantive: it does not itself confer licensing, market-access or other regulatory rights, but can facilitate more effective oversight where financial institutions or activities fall within the regulatory remit of both jurisdictions.

Source: GIFT IFSCA website [Press Release International Financial Services Centres Authority, India and Financial Services Agency, Japan executes Exchange of Letters (EoL), dated July 02, 2026]

GIFT City Partners with Vietnam’s International Financial Centre

July 1, 2026: GIFT City signed an MoU with Vietnam International Financial Center-Da Nang (VIFC-DN) to promote cooperation in financial services, fintech, innovation and cross-border investment through knowledge sharing, research and capacity building.

DLL Analysis: The partnership strengthens GIFT IFSC’s international linkages and supports its positioning as a globally connected financial centre.

Source: The Blunt Times [July 01, 2026]

Consultation Paper on Revised Draft IFSCA (Setting up and Operation of International Branch Campuses) Regulations, 2026

July 1, 2026: IFSCA released a consultation paper proposing revised regulations for the establishment and operation of International Branch Campuses (“IBCs”) of foreign universities in the IFSC, replacing the 2022 framework. The proposed regime seeks to strengthen GIFT IFSC as an international education hub and promote programmes and research in areas including Financial Management, FinTech, Sustainable Finance, Longevity Finance and Quantum Computing.

The draft retains a Top 500 global ranking requirement for eligible foreign universities and proposes a single-window application process through the Single Window IT System (“SWIT”), with applications appraised by a Standing Committee. Successful applicants would receive an initial one-year in-principle approval, extendable by another year, to establish the required infrastructure and manpower. IBCs may also engage Academic Infrastructure Service Providers (“AISPs”) for specified non-academic functions.

The framework places significant emphasis on academic equivalence and quality assurance. Degrees, diplomas and certificates awarded by an IBC must be identical to those of the parent institution and recognised in the home jurisdiction, while online or virtual delivery is capped at 10% of total credits. The draft also strengthens student protection by requiring prior approval for discontinuation or suspension of courses and placing responsibility on the Parent Entity to provide alternative arrangements or compensation in the event of disruption.

From a financial and operational perspective, IBCs would generally conduct transactions in freely convertible foreign currency, with specified use of SNRR accounts permitted. The Parent Entity may repatriate profits without restriction, while IFSCA retains suo motu inspection powers and enforcement authority, including suspension or cancellation of registration for non-compliance.

DLL Analysis: The proposed framework provides a more structured legal framework for foreign universities seeking to establish operations in GIFT IFSC, balancing institutional quality controls with financial and operational flexibility. The Top 500 threshold, parent-campus equivalence and student protection requirements strengthen regulatory safeguards, while unrestricted profit repatriation and the AISP mechanism may reduce practical barriers to establishing IBCs. The framework therefore has the potential to make GIFT IFSC a more attractive jurisdiction for internationally oriented higher education, particularly in finance and emerging technology disciplines.

Source: GIFT IFSCA Website [Consultation Paper on the revised Draft IFSCA (Setting up and Operation of International Branch Campuses) Regulations, 2026, dated July 1, 2026]

RBI Clarifies Reporting of FDI Received by Regulated Entities in IFSC

July 1, 2026: The Reserve Bank of India (“RBI”), in consultation with IFSCA, revised its FAQs on the Annual Return on Foreign Liabilities and Assets (“FLA”) under FEMA, 1999 to clarify the reporting treatment for foreign investment received by regulated entities in the IFSC.

While FDI norms do not apply to investments in regulated entities in the IFSC, data relating to such investments is required for compilation of India’s Balance of Payments (“BoP”) statistics. Accordingly, regulated entities in the IFSC are not required to file the FLA return with RBI. Instead, IFSCA will issue separate instructions regarding submission of the required investment data for BoP compilation.

DLL Analysis: The clarification provides an important distinction between substantive FDI regulation and statistical reporting requirements for IFSC entities. By removing the FLA filing requirement while retaining a mechanism for collection of foreign investment data through IFSCA, the framework seeks to reduce duplicative reporting without compromising India’s BoP data requirements. Regulated entities should, however, await IFSCA’s further instructions before determining the precise nature and timelines of the required reporting.

Source: GIFT IFSCA Website [Press Release dated July 1, 2026]

HiWiPay Receives In-Principle Approval from IFSCA

July 1, 2026: IFSCA granted HiWiPay in-principle approval to establish a wholly owned subsidiary as a Payment Service Provider (PSP) in GIFT IFSC, subject to final authorisation and applicable regulatory requirements. The proposed entity will offer cross-border payment and related services.

DLL Analysis: The approval indicates continued expansion of cross-border payment infrastructure within GIFT IFSC.

Source: KNN India [July 01, 2026]

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