Fund Management ecosystem at GIFT-IFSC records robust growth amid IFSCA’s progressive regulatory reforms

PRESS RELEASE Fund Management ecosystem at GIFT-IFSC records robust growth amid IFSCA’s progressive regulatory reforms The International Financial Services Centres Authority (IFSCA), as the unified regulator for International Financial Services Centres (IFSCs) in India, has been striving to nurture a world-class financial ecosystem at India’s first International Financial Services Centre, the GIFT-IFSC. In this backdrop, amongst other reforms, recognising the need for a unified and globally benchmarked framework for the fund management ecosystem at GIFT-IFSC, the IFSCA (Fund Management) Regulations, 2022, were notified in April 2022. Combined with a well-defined tax regime accorded by the Government of India, these regulations set a comprehensive foundation for the fund management industry in GIFT-IFSC. These regulations were comprehensively revised in 2025 after taking into account the views of market participants. Further, in its endeavor to position GIFT-IFSC as a globally competitive jurisdiction for fund management activities, IFSCA has introduced a series of progressive regulatory measures designed to attract global capital and enhance ease of doing business. A few key measures are detailed here chronologically: • Recognising the critical role of early-stage capital in driving innovation, IFSCA has instituted a dedicated regulatory framework for Angel Schemes in 2022. • To facilitate participation by Sovereign Wealth Funds in IFSC, the IFSCA has carved out exemptions from certain regulatory requirements. 1 of 4• To provide ease of investing to sophisticated investors from across the globe, a detailed framework for Accredited Investors has been instituted in 2024. • To create a seamless conduit for NRI/OCI investments into Indian securities through FPI investments, IFSCA and SEBI worked together to create a mechanism for IFSC based funds enabling 100% NRI/OCI contributions, subject to certain safeguards. • In pursuance to the announcement by the Hon’ble Union Finance Minister in the Union Budget for FY 2023–24, IFSCA carried out a comprehensive review of the IFSCA (Fund Management) Regulations, 2022, which culminated in the notification of the IFSCA (Fund Management) Regulations, 2025 on February 19, 2025. While the overarching principle of registering the Fund Management Entity (FME) with it being permitted to undertake host of fund management activities and the overall regulatory framework remains the same, the new regulations introduced significant enhancements to further ease of doing business, clarify regulatory intent, and incorporate measures towards investor protection. • A dedicated framework permitting co-investment through Special Purpose Vehicles has been introduced recently. • IFSCA has introduced a reform on Third-Party Fund Management Services, enabling FMEs in IFSC to launch and manage Restricted Schemes on behalf of overseas or domestic third-party fund managers with certain safeguards. • IFSCA has proposed a draft to the Ministry of Finance of amendments to law relating to Variable Capital Companies in the IFSC towards fulfilment of the announcement made on July 23, 2024 by the Hon’ble Finance Minister in budget for 2024-25. In keeping with the IFSCA’s approach to aligning regulation with global best practice, the regulations as well as the frameworks thereunder are drafted in consultation with the industry participants, including global market players, and are intended to address the genuine challenges faced by the industry, provide maximum ease of doing business, while also adequately addressing the regulatory concerns. 2 of 4Snapshot of recent data of the fund management industry The progressive regulatory measures and unambiguous taxation policy have resulted in robust framework for fund management business in IFSC. Further, in order to continue raising awareness regarding business opportunities at IFSC, the IFSCA continues its outreach efforts amongst the global and Indian industry participants by participating in and hosting several industry events, conferences, round-table interactions. This also includes extensive consultations held by senior IFSCA officials with the industry leaders under its Chintan Shivir (brainstorming sessions with the industry) series, the second edition of which is currently underway. As a result of a strong Indian economy and initiatives taken by Government of India, IFSCA, other regulators, and trust reposed by the market participants and investors, the fund management industry at the GIFT-IFSC has witnessed substantial growth in a short period of 3 years with the latest quarter demonstrating significant accelerated growth. As of June 30, 2025, • A total of 177 FMEs have been registered with IFSCA. • These FMEs have collectively launched 272 schemes. • These schemes have garnered cumulative commitments of USD 22.11 billion, reflecting a noteworthy 40.5% growth over the previous quarter. • The cumulative funds raised increased to USD 10.5 billion, demonstrating a 31.9% QoQ growth, underscoring investor confidence and robust fund mobilisation. • These schemes have made cumulative investments to the tune of USD 11.27 billion, registering a 39.6% QoQ growth. In rupee terms, the cumulative investments have crossed INR 95,000 Crore, with more than INR 26,000 Crore being invested in the previous quarter. • Of the total investments made, ~85% of investments have been directed towards India, reinforcing the “onshore the offshore” philosophy of IFSCA and establishing GIFT-IFSC as a preferred gateway to India for global investors. 3 of 4• The number of investors in the Restricted Schemes has crossed 3500 marking a growth of 19.35% over the previous quarter. These investors are from 60+ jurisdictions, which is also an evidence of increasing trust of investors from across the world in the GIFT-IFSC. • During this quarter, two Retail Schemes have also obtained authorisation, marking a major milestone in the broadening of the funds landscape in IFSC. Guardrails for orderly evolution To ensure that this impressive growth is accompanied by a culture of strong regulatory compliance, investor protection and substance, IFSCA has instituted robust supervisory mechanisms comprising off-site supervision and on-site supervision. While the off-site supervision includes seeking structured information from the FMEs on a quarterly basis, which, inter alia, provides insights into the risks emerging from the significant activities undertaken by FMEs, the onsite visits are intended for a deep dive into the operational aspects of FMEs and their governance mechanism, to assess the compliance with the applicable IFSCA laws. As part of its supervisory responsibilities, the IFSCA has, apart from handholding the FMEs on best practices, also taken regulatory actions as deemed appropriate so as to safeguard investors’ interest and to uphold the trust and confidence in the jurisdiction. IFSCA remains committed to nurturing an internationally competitive, transparent, and well-regulated fund management ecosystem in GIFT-IFSC. Through a balanced approach that couples progressive policy measures for ease of doing business with supervisory oversight, IFSCA endeavours to ensure orderly and sustainable growth. The substantial growth in the fund management reflects both the strength of the regulatory framework and the increasing global confidence in GIFT-IFSC. Gandhinagar August 07, 2025 4 of 4