Tariffs, Funds, and Financial Sovereignty: Reassessing the GiftCity Paradigm in Light of IFSA’s 2025 Regulatory Framework

India’s GIFT City – the nation’s only International Financial Services Centre (IFSC) has become an increasing destination for cross-border fund management within the collective regulatory jurisdiction of the International Financial Services Centres Authority (IFSCA). This is while a reignited US–China tariff war 2024–25 has shaken global trade, leading investors and fund managers to search for alternative markets. This article revisits the GIFT City model against these dynamics, particularly the new IFSCA (Fund Management) Regulations, 2025. We map the development and legal framework of GIFT City, examine the 2025 Fund Management Regulations, and evaluate global spillovers from US trade policy. We borrow comparative lessons from traditional fund jurisdictions (Singapore, DIFC, ADGM, Luxembourg) and survey the significant enforcement precedents (e.g., Sahara India). The interaction between shield tariffs and fiscal relocation delivers challenges and opportunities: India’s comparatively home-based economy can ride out trade shocks (IMF/World Bank reports) and even pull in capital displaced from China (Reuters, 2025; East Asia Forum, 2025). Still, GIFT City must fill gaps in regulation, taxes, and operations to take advantage of this window. We end with policy advice to support GIFT’s competitiveness and harmonise its fund regime with international best practice. This authoritative, law-and-policy analysis demonstrates that although GIFT City has progressed (177 FMEs), US$22.1 bn commitments up to mid-2025Further reforms are required to cement its role as a regional fund-management centre in the face of increased geopolitical risk. Further reforms are required to cement its role as a regional fund-management centre in the face of increased geopolitical risk.

Continue Reading