The Indian diaspora has made significant investments in Gujarat International Finance Tec-City (GIFT City), with total investments in funds surpassing ₹60,998 crore (US$ 7 billion), according to the International Financial Services Centres Authority (IFSCA) chairman, Mr. K Rajaraman. This milestone highlights the growing participation of non-resident Indians (NRIs) and people of Indian origin in India's global financial hub.

Strong NRI Investment Flow into GIFT City

In 2024, NRIs and people of Indian origin remitted over ₹11,24,106 crore (US$ 129 billion) to India, reflecting the massive financial influence of the 19 million-strong Indian diaspora. As per IFSCA’s data, around 5,000 NRIs have already invested close to ₹13,071 crore (US$ 1.5 billion) in banking products and approximately ₹60,998 crore (US$ 7 billion) in the fund ecosystem within GIFT City.

Key Features of GIFT City Investments

Unlike traditional rupee-based options, GIFT City provides foreign exchange-based investment opportunities, making it an attractive proposition for the global Indian community. Dedicated facilities to attract diaspora investments were introduced in 2024, further facilitating seamless participation in the Indian financial market.

India's Financial Reforms and Future Goals

Speaking about India's financial roadmap, Mr. Rajaraman stressed the need for major financial reforms within three to five years to align with India's long-term vision of becoming a developed nation by 2047. To achieve this, the IFSCA is actively benchmarking GIFT City against other global financial centers and focusing on attracting more international capital.

GIFT City’s Expanding Banking and Financial Services

The banking sector in GIFT City has witnessed substantial growth, with assets under management (AUM) for the 30 banks, including 15 international banks, now exceeding ₹6,79,692 crore (US$ 78 billion). Indian corporates have leveraged this ecosystem, borrowing nearly ₹4,35,700 crore (US$ 50 billion) through various financial instruments. Additionally, a major Indian corporation has submitted a proposal to borrow ₹26,142 crore (US$ 3 billion), highlighting the increasing reliance on GIFT City’s international banking services.

Expansion Beyond Finance: Aviation and Shipping Sectors

Apart from financial services, GIFT City is actively expanding into aviation and shipping sectors. According to IFSCA’s executive director, Mr. Dipesh Shah, GIFT City has attracted 33 aircraft leasing firms, facilitating 198 aviation asset leases. This move aligns with India's goal of positioning itself as a key player in the global aircraft leasing and shipping industry.

Growing Cybersecurity and AI Risks in Financial Sectors

While GIFT City continues its upward trajectory, banking veteran Mr. K V Kamath has emphasized the need for robust internal controls in startups and financial institutions. A recent survey by the Institute of Internal Auditors and Protiviti India found that two-thirds of chief audit executives view artificial intelligence, bots, and cybersecurity as top financial risks. However, only 16% of these executives feel highly prepared to tackle emerging digital threats, pointing to the urgent need for enhanced risk management frameworks.

Conclusion: A Promising Future for NRI Investments in GIFT City

The significant ₹60,998 crore investment from the Indian diaspora in GIFT City funds reflects strong global confidence in India’s financial growth story. As IFSCA continues to implement reforms, attract international investors, and expand into non-financial sectors, GIFT City is set to cement its position as a premier global financial hub. Investors, particularly NRIs, should closely monitor upcoming developments, policy changes, and investment opportunities in GIFT City, as it plays a crucial role in shaping India’s financial future.

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