GIFT IFSC Gets a Lift from Third-Party Fund Management Platforms

Investors’ search for stable and well-regulated gateways to invest in markets is no secret, and neither is Gujarat International Finance Tec-City (GIFT) City’s ambition to position itself as India’s most credible offshore point. What is changing meaningfully now is the rollout of the Third-Party Fund Management (TPFM) framework at the International Financial Services Centre (IFSC), which allows Global Asset Managers to access India as well as Indian Asset Managers to access global markets through IFSC-regulated structures.

Introduced under the IFSCA’s Fund Management Regulations, the TPFM framework represents a decisive regulatory reset. TPFM platforms function as an institutional investment framework, allowing Asset Managers to launch strategies, both India Inbound or India Outbound, through locally registered Fund Management Entities (FMEs) and manage funds while outsourcing non-core functions such as Fund Administration, Compliance, Governance, Reporting and Risk Oversight. The FME acts as the Licensed Fund Manager within the IFSC, while the Asset Manager retains control over investment strategy. Operating within an established regulatory environment, these TPFM platforms provide a ready-made operating structure aligned with global best practices, significantly lowering execution risk for Asset Managers.

For Asset Managers, the appeal lies in speed and predictability. TPFM platform-based models eliminate the need to independently navigate jurisdiction-specific regulations or assemble multiple service-provider relationships across geographies. Compliance, Governance and oversight are embedded into the fund structure itself, rather than treated as post-launch considerations, an approach increasingly favoured by global institutional allocators.

Alongside inbound capital, the TPFM framework also enables structured outbound investment from India. TPFM platforms allow Indian institutions, family offices and fund managers to deploy capital into global markets through regulated vehicles, benefiting from dollar-denominated structures, streamlined approvals and regulatory alignment. This dual capability positions GIFT IFSC as a two-way capital gateway, facilitating both foreign participation into India and disciplined outbound diversification by Indian capital pools.

GIFT IFSC offers three clear advantages: faster market entry through TPFM platform-led structures, regulatory comfort through globally familiar safeguards, and structural compatibility across public markets, private assets and alternatives. These benefits are reinforced by a competitive Tax regime, including a 10-year tax holiday within a 15-year window and multiple exemptions that often make GIFT IFSC more attractive than traditional offshore hubs such as Mauritius or Singapore.

Fund management activity has expanded in GIFT IFSC. It now hosts 194 FMEs managing 310 funds, with aggregate commitments exceeding USD 26 billion. In the six months ended September 2025, foreign capital inflows into India’s IFSC infrastructure surged significantly, with investments into India rising to USD 9.8 billion from USD 5.7 billion in the prior six-month period. Concurrently, outbound investments from India into foreign jurisdictions nearly doubled to USD 1.6 billion from USD 842 million in the preceding period, underscoring increased cross-border capital flows driven by Indian institutions and family offices seeking global diversification. GIFT IFSC continues to act as a strategic gateway for both inbound capital, by offering a dollar-denominated, tax-advantaged regulatory environment that simplifies foreign participation, and outbound deployment of Indian capital into global markets through regulated vehicles under the Liberalised Remittance Scheme (LRS) or Overseas Portfolio Investment (OPI).

An equally important, though less visible, pillar of this progress is the supporting service ecosystem. The scalability and credibility of TPFM platforms are closely tied to the strength of Fund Administrators, Custodians, Compliance Specialists, Legal Advisers and Technology providers operating within the IFSC. Their role is not investment-driven, but structural. They ensure operational continuity, compliance discipline and institutional-grade reporting that global allocators increasingly demand.

Beyond administration, TPFM platforms embed regulatory substance into fund structures. Critical roles such as the Principal Officer are not diluted. They remain fully accountable positions, professionally offered and institutionally supported by service providers. This ensures governance continuity, regulatory discipline and credibility without compromising speed or scalability.
From a fund set-up perspective, TPFM platforms support core execution requirements including fund documentation, regulatory liaison with the IFSCA, and counterparty appointments such as bankers, custodians, auditors and tax advisers, creating a fully operational and compliant structure from inception.

As India Inbound/Outbound investing matures, TPFM platforms are emerging as a foundational layer of the market’s infrastructure. By embedding these TPFM platforms within a regulated, onshore-adjacent ecosystem, GIFT IFSC offers global as well as local managers something rival jurisdictions increasingly struggle to match, operational depth combined with regulatory certainty.

The shift is not cosmetic. It addresses the biggest frictions Asset Managers have historically faced while accessing India: cost, time and regulatory complexity. For policymakers, the objective is clear. They aim to remove structural barriers. For Asset Managers, the message is simpler. GIFT IFSC is evolving from a tax-efficient booking centre into a fully functional offshore command centre for Indian capital.

Disclaimer: The opinions expressed above are of the author and may not reflect the views of DSIJ.