GIFT City (IFSC): Legal, Regulatory & Tax Framework

India · International Financial Services Centre

GIFT City (IFSC)

GIFT City is India’s first International Financial Services Centre — on Indian soil, but treated for most financial and exchange-control purposes as if it were offshore. A single regulator, the IFSCA, oversees banking, capital markets, insurance and funds within the IFSC, under a distinct exchange-control and tax regime. We advise on entering GIFT City, moving capital in and out, and staying compliant once there — coordinated with the UAE where a structure runs through the DIFC or ADGM.

01 — Choose a topic

The regime
One regulator, and why the IFSC sits apart

Money & tax
Moving capital, and what it costs

Compliance & disputes
Obligations once you are inside, and how disputes resolve

02 — What GIFT City is

Indian soil, an offshore rulebook.

GIFT City’s IFSC is a deemed-offshore financial jurisdiction inside India. The same activity is governed by a different regulator, a different exchange-control treatment and a different tax position from the mainland — which is the opportunity, and the trap for the unadvised.

One regulator

Created by the IFSCA Act 2019 and operational since 2020, the IFSCA exercises within the IFSC the powers the RBI, SEBI, IRDAI and the pension regulator hold on the mainland — a single window for banking, markets, insurance and funds.

Outside India for FX

Under the FEM (IFSC) Regulations 2015, a unit set up in the IFSC is treated as a person resident outside India for exchange-control purposes — which is what makes the centre work, and what makes every capital movement a FEMA event.

A distinct tax position

The reliefs are specific statutory provisions, each with conditions — not a blanket holiday — and from 1 April 2026 they sit within India’s new income-tax code.

Built for cross-border

GIFT is increasingly used alongside the DIFC and ADGM in India–UAE structures. We run the Indian IFSC side and the UAE side as one matter rather than two.

03 — How we help

From entry to ongoing compliance.

Set-up & licensing

Choosing the right IFSC unit, the IFSCA authorisation path, and the constitutional documents to match.

FEMA route mapping

Identifying the correct route for each inbound or outbound flow — FDI, ODI/OPI or ECB — and the filings that follow.

Tax structuring

Applying the IFSC reliefs to the actual facts, and positioning for the transition into the new code.

AML & CFT compliance

Building the policies, KYC and reporting the PMLA and IFSCA guidelines require of an IFSC entity.

Disputes

Advising on forum and seat before a dispute arises, and acting when one does — arbitration and the chosen courts.

India–UAE corridor

Coordinating a GIFT structure with a DIFC or ADGM vehicle so the two jurisdictions work as one.

04 — Common questions

GIFT City, answered.

Is GIFT City treated as inside or outside India?

Geographically it is in Gujarat, India. But for most financial-services and exchange-control purposes the law treats a unit in its IFSC as a person resident outside India, under the FEM (IFSC) Regulations 2015 — which is why capital moving between the IFSC and the mainland travels defined FEMA routes.

Who regulates entities in GIFT City?

A single regulator, the International Financial Services Centres Authority (IFSCA), established by the IFSCA Act 2019. Within the IFSC it exercises the powers otherwise held by the RBI, SEBI, IRDAI and the pension regulator, covering banking, capital markets, insurance and funds.

What tax benefits apply in the IFSC, and are they changing?

The IFSC carries specific statutory reliefs rather than a blanket exemption, each subject to conditions. From 1 April 2026 these provisions sit within India’s new income-tax code, so current structures should be reviewed against the regime in force at the relevant time.

How are disputes involving GIFT City entities resolved?

Unlike the DIFC or ADGM, GIFT City has no common-law court of its own, so the forum is chosen rather than given — most often arbitration, with the seat and rules selected in the contract. The right choice depends on the parties, the assets and where any award will be enforced.

05 — Where to start