Indian Diaspora Investments in GIFT City Exceed $7 Billion
Investments from the Indian diaspora in funds based in GIFT City have now surpassed $7 billion, as confirmed by K Rajaraman, chairman of the International Financial Services Centres Authority (IFSCA), during an event on Tuesday. In 2024, non-resident Indians (NRIs) and people of Indian origin transferred over $129 billion back to India, suggesting they also have similar amounts invested in global markets.
Currently, about 5,000 NRIs have invested nearly $1.5 billion in various banking products, while close to $7 billion has found its way into the fund ecosystem. This is part of a broader effort to attract overseas investment into GIFT City, located in Gujarat, which began in 2024.
Rajaraman pointed out that with a diaspora of over 19 million people, there is a significant opportunity to tap into those funds. He explained that GIFT City provides an attractive investment platform for NRIs living abroad, allowing them to invest in foreign currency rather than just in Rupee terms when sending money back home.
As discussions about financial reforms gain momentum, Rajaraman emphasized the need to complete these reforms in the next three to five years to help India progress towards its goal of becoming a developed nation by 2047. He noted that the IFSCA is committed to learning from best practices in global financial centers.
The assets managed by the 30 banks operating in GIFT City, including 15 international banks, have exceeded $78 billion, with Indian companies borrowing around $50 billion alone. He also mentioned that a prominent Indian corporation recently sought proposals to borrow $3 billion.
Dipesh Shah, an executive director at IFSCA, added that GIFT City is expanding its focus beyond finance to include sectors like aviation and shipping, where Indian firms are active in acquiring and leasing assets. Currently, 33 aircraft leasing companies are registered in GIFT City, with 198 aviation asset leases completed to date.
At the same event, renowned banking figure K V Kamath highlighted a common issue among startup founders: the neglect of internal controls. He argued that many entrepreneurs become so focused on business development and technology that they overlook the critical importance of having solid internal control systems in place.
Kamath also shared his experience at ICICI Bank, where empowering employees led to many starting their own businesses. He advised entrepreneurs to prioritize establishing internal controls.
A recent survey conducted by the Institute of Internal Auditors with Protiviti India revealed that two-thirds of chief audit executives view artificial intelligence, automation, and cybersecurity as major risks. However, only 16% of respondents felt highly prepared to address these risks, while 58% considered themselves moderately prepared.
Puneet Gupta, managing director at Protiviti India, stated that internal audit departments must take the lead by using advanced analytics to identify hidden risks and embracing technological advancements. Anthony Pugliese, president of the IIA, echoed the call for organizations to strengthen their governance frameworks and enhance their digital readiness.
