We expect solid growth once global tumult settles, says IFSCA chief

K Rajaraman says GIFT IFSC is poised for its next growth phase as global volatility eases, with plans to deepen bond markets and expand leasing

K Rajaraman, chairperson of the International Financial Services Centres Authority (IFSCA) in GIFT City, Gujarat, said the focus of the authority is to position itself as a natural destination for international capital and financial activity. GIFT IFSC is now expanding market depth — from leasing high-value assets and boosting bond market participation to strengthening global exchange linkages, he said in an interview with Khushboo Tiwari in Mumbai. Edited excerpts: 

How has the Gift-IFSC ecosystem grown since the IFSC authority was set up? 

We started off with the tagline of ‘onshoring India-focused offshore financial services’ but now we have expanded our ambit to how we can aid and assist the India growth story. With the government working on Viksit Bharat 2047 vision, we are trying to see how we can be of more relevance and support businesses, including SMEs (small and medium enterprises). Our focus is to enable cost-effective capital raise. The total lending from Gift City banks to India is about $61 billion, and their fund flows are roughly about $16 billion. Roughly about $77 billion has been raised via GIFT IFSC. It has now become a preferred jurisdiction for people to raise resources, especially lines of credit or any kind of financial product including for hedging or derivatives. At least 24 funds have physically relocated here from foreign jurisdictions and a total of 360 funds are registered here. 

What steps are you looking into to make it attractive for foreign fund houses to set up here? 

It is work in progress as global fund managers have had comfort zones in many foreign jurisdictions for several decades. We have achieved early success as several global fund managers have now established strategies in GIFT IFSC. In the current global situation, many may have paused their decision-making but in the long term they will have to come here with the strong India growth story. The Hon’ble Finance Minister also announced a longer term tax holiday of 20 out of 25 years with 15 per cent rate beyond 25 years, providing tax certainty which will be very helpful to long-term investors such as aircraft and ship lessors, global pension funds and SWFs, etc. We are poised for the next phase of solid growth over the next six

months to a year — once the global situation settles. 

Any other new areas of focus? 

In the leasing segment, we are also exploring the feasibility of permitting leasing of large capital equipment from IFSC, for instance tunnel boring machines, floating production and storage and offloading platforms (FPSOs) (which are basically floating refineries). There are many of our Indian companies, which own these assets. Such kinds of assets can also be leased out of GIFT IFSC. We are working on broad basing our leasing ecosystem. We are looking at equipment, which are large and capital intensive in nature. These FPSOs cost about $1.5 billion each. Large players like L&T and several other oil producers have shown interest. 

For settlement of legal disputes and arbitration, there is a proposal for setting up an international arbitration centre at GIFT IFSC. Globally, there are international arbitration tribunals which enable speedy dispute resolution. I think we must do something similar.

  The first IPO from GIFT City did not sail through for listing. Do you see it as a setback?

 

It is not a major setback. IFSCA’s job is to create an effective regulatory architecture. The regulation for listing has worked very well and unfortunately in that particular case of IPO (initial public offering) that you have mentioned, it happened at a time when the conflict broke out in the Middle East. The issue did not succeed probably due to the timing. We got to test our regulations at that point of time, that is our biggest success. (Once) The global turmoil settles down, I expect more issuers will come forward with IPOs to raise money. There are a few already in discussion with the exchanges.

 

Any new product offerings possible in the derivatives market? Zero-day expiries have also not seen much traction?

 

IFSC-regulated entities have manufactured a lot of retail banking, insurance and capital market products. IFSC exchanges have also launched products like Unsponsored Depository Receipts (UDRs) on foreign securities. We have told the exchanges to collaborate with and establish connects with the international exchanges—the same way the NSE International Exchange (NSE IX) has collaborated with the Singapore Stock Exchange (SGX), which has enabled GIFT Nifty to take off. The monthly trading on derivatives touched $130 billion in March 2026. Collaboration with other exchanges including cross-listing of ETFs, manufacturing joint indices, etc. – these are some of the things that we have said that we should focus on. At the same time, we are also looking at creating opportunities for instruments like ETFs.

  How has the response been to efforts to develop the centre as a treasury hub?

 

There are more than 10 treasury centres of large global and Indian corporates already here. This has been one segment, where there has been a rapid growth thanks to the strong banking ecosystem. Not only Indian companies, but a lot of foreign companies are coming here because they believe that this is a very optimal way for managing their international cash flows out of an offshore ecosystem. These 10 treasury centres have done about $5.6 billion worth of financing here as well.

 

There have been discussions on developing global trading for commodities from GIFT IFSC. How is it progressing?

 

Treasury centres also can function as commodity desks. Many global and large Indian companies are engaged in global trading or merchanting—they buy coal from Australia and sell it in South Africa or maybe in Malaysia. They may buy oil from the Middle East and sell it in some other country. We believe that re-invoicing and merchanting enables companies to get full control over the supply chain—that also supports their manufacturing. Most of the large Indian companies which are in manufacturing have set up such enterprises abroad for commodity trading—in places like Singapore. Our idea to attract them back to Indian shores. We have sent proposals to the government for this.

 

How are you planning to develop the bond ecosystem?

 

Our focus is on making the bond ecosystem more robust and substantial. The IFSCA secondary markets committee is working on the recommendations to make the bond market more vibrant. Right now, bonds are being listed in the two IFSC exchanges and a number of these issuances are also settled and cleared here. The idea is ‘how do we do more’ and how to get bond arrangers here. Arrangers are typically the large global banks.  We have told IIDI (India International Depository IFSC), the depository, to finalise the connectivity with international depositories like Clear Stream, Euro Clear etc. They are working on it. It will make global investors more comfortable about investing in bonds here.  We believe that there is opportunity here for fund managers to set up bond exchange traded funds.

 

Any discussions on settlements in Euro here?

 

At present, the foreign currency settlement system settles in dollars. We have not received inputs from the industry for settlement in other currencies. Currently, we have about 40 banks here. Our thinking is that we must have at least another 10-15 banks in the next 3 years; by 2031, at least 75-80 banks. There are some jurisdictions from where there are no banks currently  here in GIFT IFSC. Banks connect jurisdictions—enabling Indian corporates to access finance. We are working with several jurisdictions to enable more banks to come here.

  There has been a long-standing demand for omnibus structure for private banks here. Any developments around it?

 

Omnibus structures are widely used in most global financial centres to pool money from global investors. But there are constraints due to the AML/CFT (Anti-Money Laundering and Countering the Financing of Terrorism) policy. We are in a jurisdiction where AML/CFT concerns are paramount. We should focus on ensuring proper KYC (know your customer) and identification of the ultimate beneficial owner in case of significant transactions, should be known. As a regulator, we are duty-bound to do all that as per law. At the same time, we have set up a working group to study whether there can be any simplification or better alignment with international jurisdictions. The working group is likely to make its recommendation in the next one month. Once it is done we will discuss with the government to see what can be done.

  Are there any concerns regarding currency outflows from here?

 

Of the funds raised by AIFs (alternative investment funds) in IFSC, $16 billion has been invested into India. The remaining $4 billion of the money has been invested in other foreign jurisdictions. Over 80 per cent of the funds raised by AIFs have been invested in India.