GIFT City is emerging as the preferred hub for offshore AIF and PMS structures

GIFT City is fast becoming a major name in global finance. Many fund managers now see it as a strong offshore base. This change did not happen overnight. It grew with steady policy support and investor trust. India’s alternative investment market has grown for over a decade. Wealthy investors now seek global options. They also want simple and flexible rules. Because of this, GIFT City has gained attention. It offers global style rules inside India. The city hosts India’s first International Financial Services Centre. It links the Indian capital with global markets. Many new structures now operate from here, with over 270 funds and schemes registered in the IFSC zone. These include offshore-style funds and global strategies. In this fast-growing space, gift city funds are becoming very popular. 

They allow trading in foreign currency. They reduce many old barriers. Therefore, more managers now choose this route. By December 2025, the combined assets of Portfolio Management Services and Alternative Investment Funds in India had moved well beyond the ₹23-lakh-crore mark, showing a strong long-term growth pace of a little over 30% each year over the past decade. Furthermore, government support remains strong. Rules keep improving each year. In addition, tax clarity builds confidence. As a result, growth continues at a steady pace.

Why Fund Managers Are Moving to GIFT City

Fund managers want freedom, speed, and clarity. GIFT City offers all three. It allows easy foreign currency use. It also cuts many complex approvals. Earlier, many funds used overseas hubs. However, costs were high. Rules were often unclear. Now, GIFT City offers similar benefits inside India. This makes it more attractive.

The regulatory system here follows global standards. Yet, it understands Indian needs. This balance helps managers plan better. They can design global strategies without heavy limits. Another reason is tax efficiency. Certain incomes get strong tax relief. This improves overall returns. Therefore, more funds are now shifting their base here. In addition, support services are growing fast. Legal, audit, and tech firms are setting up offices. This creates a full ecosystem. Hence, managers feel more confident.

Expansion of Offshore AIF and PMS Structures

The number of new funds in GIFT City is rising each year. Many belong to the space of alternate investment funds. These funds focus on private equity, hedge funds, and global assets. Several managers who earlier worked abroad now return through GIFT City. They use it as an offshore-style base. This keeps global reach but stays close to India. Portfolio services are also growing fast. Many global strategies now run from here. Some focus on stocks. Others focus on bonds and mixed assets.

A growing number of PMS companies in India are also exploring this route. They want to offer global products. GIFT City allows this in a simple way. In this system, gift city funds help managers reach foreign investors. They also attract NRIs. This mix creates a strong capital flow. Therefore, the model keeps expanding.

Investor Interest and Capital Flow Trends

Investors now want global exposure. They do not want only local assets. Because of this, demand for offshore-style products is rising. NRIs are a big part of this trend. They trust Indian managers. But they also want global markets. GIFT City fits both needs. Many investors also want safety and clear rules. They prefer regulated centres. GIFT City offers strong oversight. At the same time, it offers flexibility.

Some investors compare it with older offshore hubs. But costs here are often lower. Support is also easier to access. Hence, more capital now flows in, with outbound investments expected to reach around ₹27,000 – ₹36,000 crore every year. In this growing market, gift city funds act as a bridge. They connect India and the world. Therefore, capital movement is becoming smoother.

Future Outlook and Strategic Importance

Experts believe GIFT City will grow much bigger, with fund commitments projected to cross ₹9 lakh crore by 2030. More funds will move here in the coming years. Infrastructure is also improving fast. The government plans more reforms. These will make rules even simpler. They will also attract foreign players. This will strengthen the ecosystem. The role of AIF in India is also changing. More AIFs will choose GIFT City. This will add global flavour to Indian fund management.

Investors will also benefit. They will get more choices. They will get better global access. Managers will get better tools. Many now see it as a long-term hub. Not just a trend, but a shift. In this future, gift city funds will play a key role. They will shape how India connects with global finance.