BlackRock and StanChart bet on GIFT City as India's outbound ceiling bites
Global asset managers are setting up funds in India's GIFT City to bypass exhausted capital-control limits, turning a decade-old project into a live conduit for Indian money heading overseas.
Standard Chartered will launch its Signature CIO funds from GIFT City "in the coming weeks," while the BlackRock–Jio Financial Services joint venture is preparing two outbound funds — a global equity vehicle and an emerging-markets product — before the end of September. The moves mark the most visible institutional commitments yet to India's only international financial centre, located in Gujarat.
The timing is not accidental. Earlier this year, New Delhi restructured GIFT City's tax regime to bring it in line with Singapore, according to Rajesh Gandhi, a partner at Deloitte India. At the same time, the government relaxed rules governing foreign-currency usage and loosened capital controls on outbound investments routed through the city.
Those exemptions matter because they do not apply on the mainland. India's aggregate $7 billion ceiling on outbound investments by domestic asset managers has already been exhausted. Yet Indian equity funds recorded positive inflows for a 65th consecutive month, according to industry body AMFI, even as local markets lag global peers. GIFT City funds sit outside that ceiling, giving managers a legal channel to deploy Indian savings abroad.
The numbers reflect growing momentum. Fund-management entities registered in GIFT City rose to 217 in May from 194 in November, government data show. Standard Chartered, which began operating from the centre in 2020, described it as "one of the world's fastest-growing international financial centres," in the words of Samir Subberwal, its global head of wealth solutions, retail products, data and analytics.
Jio BlackRock Asset Management received regulatory approval in May. Chief investment officer Rishi Kohli said the two initial funds are on track for a September launch, positioning the venture to capture pent-up Indian demand for overseas exposure, particularly to U.S. equities.
Still a work in progress
Analysts caution that GIFT City remains far from rivalling Singapore, Delaware or Dubai's DIFC. Its regulatory architecture was only put in place around 2020, and the centre must shed its reputation as an India-specific gateway to attract genuinely global capital flows.
Vivek Singhania, co-founder of Mumbai-based Dovetail Capital, noted that DIFC took two decades to mature and said his firm is in discussions with several U.S. and Singapore-based funds weighing a GIFT City presence. Vikas Satija, managing director and chief executive at Shriram Wealth, predicted the centre will become a key global financial hub by 2030, calling BlackRock's arrival "a big sign."
For investors and asset allocators, the near-term takeaway is narrower: GIFT City is becoming the most efficient onshore-adjacent structure for channelling Indian capital into global portfolios, at a moment when regulatory constraints elsewhere have made that channel nearly impossible.
