Indian Diaspora Investment in GIFT City Surpasses $7 Billion
Investments from the Indian diaspora in funds based in GIFT City have exceeded $7 billion, as revealed by K. Rajaraman, the chairman of the International Financial Services Centres Authority (IFSCA), on Tuesday.
In 2024 alone, non-resident Indians (NRIs) and people of Indian origin sent over $129 billion back to India. Rajaraman noted that it is reasonable to believe that they hold a similar amount in global markets. He mentioned that about 5,000 NRIs have collectively invested nearly $1.5 billion in various banking products, along with roughly $7 billion in the fund ecosystem.
Starting in 2024, special initiatives were launched to attract more diaspora investments to GIFT City, which is located in Gujarat. Rajaraman emphasized the significance of the vibrant Indian diaspora, which numbers over 19 million. He explained that the aim is to create a platform that offers NRIs in foreign countries investment alternatives, as many of them currently send money back to India in rupee terms. GIFT City presents a unique opportunity, allowing investments in foreign exchange.
Amid calls for necessary reforms, Rajaraman stated that these changes should be implemented over the next three to five years, contributing to India’s aspirations of becoming a developed nation by 2047. He highlighted that the IFSCA is committed to creating a robust offshore platform for India by learning from other successful global financial centers.
The total assets managed by the 30 banks in GIFT City, which include 15 international banks, have now surpassed $78 billion. Rajaraman pointed out that Indian corporates alone have borrowed around $50 billion. He noted that a large Indian corporate has recently issued a request to borrow $3 billion without revealing specific details about the company.
Dipesh Shah, IFSCA’s executive director, added that GIFT City is also exploring sectors beyond finance, such as aviation and shipping, where Indian companies are increasingly acquiring or leasing assets. Currently, 33 aircraft leasing firms operate from GIFT City, with 198 aviation assets already leased.
At the same event, banking expert K. V. Kamath shared insights about startups. He remarked that many founders fail because they often overlook the importance of building a strong internal controls team. Founders typically concentrate on business opportunities and technology but realize too late the value of internal controls.
Kamath recounted how the freedom given to employees during his time at ICICI Bank inspired many to launch their ventures. He advised entrepreneurs to prioritize creating a strong internal controls team.
A survey conducted by the Institute of Internal Auditors and Protiviti India involving over 220 internal auditors showed that many are increasingly concerned about risks related to artificial intelligence, cybersecurity, and automation. Only 16% of the respondents felt well-prepared to identify emerging risks, while 58% said they were moderately prepared.
Puneet Gupta, managing director at Protiviti India, stressed that internal audit teams need to lead in identifying hidden risks and adopting digital tools. Anthony Pugliese, president and CEO of the International Internal Audit Association, also pointed out the need for organizations to strengthen their governance and risk management practices.
