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GIFT City IFSC draws interest from investors and NRIs diversifying from Dubai amid West Asia tensions, tax perks and regulatory stability
GIFT City
Rising geopolitical tensions in West Asia are prompting global investors and non-resident Indians to reassess concentrated exposure to Dubai, leading to a surge in enquiries for India’s International Financial Services Centre (IFSC) at GIFT City, according to a report by The Economic Times (ET).
While Dubai continues to be a dominant hub for capital, wealth management and investments, recent volatility has triggered a diversification push. Investors are increasingly exploring additional jurisdictions that offer regulatory stability and closer access to growth markets such as India.
“Geopolitical volatility in West Asia is beginning to reflect in higher enquiries for office space at GIFT City, particularly from institutions and intermediaries evaluating an India-linked base within the IFSC,” Aaryan Shah, associate director at Savvy Group, told ET. “We are seeing a gradual shift towards a ‘dual-hub’ strategy rather than relocation from Dubai. While conversions remain measured, the quality of conversations has improved, with a sharper focus on regulatory certainty and long-term presence.”
He added that incentives announced in the 2026–27 Budget, along with improvements in social infrastructure, are supporting investment inflows and enhancing long-term leasing visibility at India’s only IFSC.
Under the Budget provisions, IFSC units are allowed a 100% deduction on specified income for 20 consecutive years within a 25-year block, compared with the earlier 10-year window. Post this period, business income from IFSC operations will be taxed at 15%, versus 35% for overseas companies operating elsewhere in India.
“Over the past six months, following key infrastructure announcements, GIFT City is increasingly emerging as a key financial hub,” Anuranjan Mohnot, managing director at Lumos Equity Advisors, told ET. “The recent geopolitical tensions in the Middle East have further accelerated this trend. Improvements in social infrastructure, liberalised policies, the entry of foreign universities, a strong talent pool and competitive real estate costs have made it an attractive alternative to other global hubs.”
Property consultants told ET that discussions have picked up in recent weeks, especially among UAE-based investors evaluating cross-border structures. “We are seeing more inbound queries from clients based in the Gulf who want to hedge geographic risk,” a senior executive at an international property consultancy said. “The interest is not about exiting Dubai, but about adding another layer of safety and flexibility.”
With its foreign currency-denominated ecosystem, tax incentives and unified regulator in the International Financial Services Centres Authority (IFSCA), GIFT City is positioning itself as a gateway for global capital into India, particularly in fund management, leasing and structured finance. The narrative is evolving beyond tax efficiency to include geopolitical risk mitigation, with India viewed as a relatively stable macro environment.
However, stakeholders cautioned against overstating the shift. Dubai’s deep liquidity, well-established legal frameworks and mature ecosystem—anchored by the Dubai International Financial Centre—continue to underpin investor preference, with Indian investors remaining key participants in its financial and real estate markets.
March 23, 2026, 08:07 IST
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