GIFT IFSC Fund Registrations and Investor Base Reach New Heights Amid Stable Outbound Flows

GIFT City's IFSC Registers 1,100+ Entities, Fund Infrastructure Expands

Key Highlights

• Total registrations under the International Financial Services Centres Authority (IFSCA) reached 1,100 by December 2025, a nearly 100% increase from late 2023 levels.
• Fund registrations and investor commitments surged in the October-December quarter, with cumulative non-retail commitments reaching USD 32.13 billion and funds raised at USD 17.34 billion.

Fund Infrastructure Growth

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

• The number of registered Fund Management Entities grew to 200, a 50% increase from 2023 levels.
• Total schemes moved past 300, with Category III AIF participation emerging as a fast-growing segment.
• Registered Category III investors reached 3,257 as of December 2025, a 100% increase from September levels and 1.7 times higher than late-2023 levels.

Outbound Balances Remain Flat

• Outstanding overseas direct investment (ODI) routed through IFSC banking units remained broadly unchanged at $878 million in December, from $1.1 billion at the end of September and levels seen two years ago.

Capital Markets and Balance-Sheet Led Growth

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

• Cumulative debt raised and listed on IFSC exchanges reached $68.03 billion as of December 2025, with $1.42 billion of fresh listings during the quarter.
• Trading liquidity on IFSC stock exchanges remained robust, with average monthly turnover at $91.44 billion during the October-December period.

Banking Units Continue to Anchor Ecosystem

• Growth in banking units was concentrated in treasury operations, interbank placements, and trade finance rather than outbound portfolio risk.
• The contrast between steady banking activity and flat ODI levels suggests IFSC usage is skewing towards financial plumbing and liquidity management.

Market Still in Preparation Mode

• The gap between fund infrastructure growth and flat ODI levels highlights a market still in preparation mode, building optionality rather than chasing immediate offshore exposure.
• Macro conditions, such as elevated global rates and cautious Reserve Bank of India policy, contributed to the measured approach to outward flows.

Policy Tailwinds and Future Outlook

• The Union Budget 2026 extended the tax holiday for IFSC units to 20 consecutive years out of 25 and introduced a concessional 15% tax rate thereafter.
• IFSCA's rollout of the "Master Key" framework is expected to lower operational friction for fund managers and intermediaries looking to scale across strategies.