For most of modern India’s history, the international finance connected to this country has lived somewhere else. Venture and private equity money coming into India was domiciled in Mauritius, dollar debt was booked in Singapore, and fund structures were set up in the United States because global investors already understood them. That was not because those places understood India better. It was because our exchange controls, built to protect the rupee, made foreign-currency finance hard to run from Indian soil.
GIFT City is the attempt to bring that ecosystem home. Gujarat International Finance Tec-City, in Gandhinagar, is India’s International Financial Services Centre, closest in kind to Dubai’s DIFC and Abu Dhabi’s ADGM: zones built to attract global capital with internationally competitive regulation and tax while staying under their home country’s jurisdiction. Indian law treats it as offshore. Business runs in dollars, the usual exchange controls largely do not apply, and IFSCA plays the role that RBI, SEBI and IRDAI play elsewhere in the country.
For years, reasonable people doubted the bet. In 2026 the doubt ran out. February’s Union Budget doubled the tax holiday for GIFT City units to 20 years within a 25-year block, settling a question that had worried early entrants like SBI. Fund commitments reached $39 billion by March, and IFSCA’s data shows retail scheme investors growing from 255 in September 2025 to 3,438 by March 2026, mostly NRI money choosing GIFT over Singapore.
Whether the capital will base itself there is settled. Whether it can transact as easily as it can sit is not. At Cashfree we move money across India’s border every day, and from that vantage the answer is not yet.
Follow one SIP and the gap becomes visible
Consider an engineer in Bengaluru putting $500 a month into a US index fund through a GIFT City licensed investing app. Month one works: the bank runs its Liberalised Remittance Scheme check, tags the purpose code, and the money reaches the overseas broker.
The friction shows up in month two, when the investor wants this to simply repeat, the way their domestic SIP already does. A domestic SIP is set up once, on a single eNACH mandate, and every later debit happens automatically. There is no cross-border equivalent. Every month’s $500 is a brand-new remittance, a fresh LRS check, fresh purpose-code tagging, and depending on the bank, fresh authentication. It compounds across banks, because a platform integrated with one authorised dealer bank and not another tells a slice of users their bank is unsupported.
Trade got a rulebook. Investing got permission.
IFSCA’s and RBI’s moves from the first half of 2026 read together look like a repair job on the transaction layer, with one part left out.
Start with identity. On 26 June, IFSCA published a consultation paper proposing a unique KYC identifier per client, valid across every regulated entity in the zone: verify once, carry the number everywhere. New clients join from 1 September 2026 and existing records migrate by 30 October. The structural reading matters more than the deadlines. A regulator has publicly named repeated onboarding as a constraint on its own hub’s growth, and regulators do not write consultation papers about frictions costing nobody anything.
Then fund movement, where the fix has been sitting unused for ten months. IFSCA’s Global Access framework of August 2025 made licensed platforms route client money through an IFSC Banking Unit, the in-zone branch FEMA treats as a foreign entity, built for corporate treasury flows rather than retail remittances. Within a month, after industry said so, IFSCA let authorised payment service providers hold those funds instead. The obstacle was cleared on 12 September 2025. Nobody has built the layer it allows.
Trade got a full rulebook overhaul in January. Investment flows got nothing. RBI notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, effective 1 October, replacing rules written in 2015 and recognising how trade actually works now, with netting, third-party payments and merchanting trade on workable timelines. A decade of practice, acknowledged in one notification with a date attached. Investment flows have no equivalent and no date. Retail capital leaving India still runs on that September 2025 amendment, a permission rather than a rulebook: it told platforms they could use a payment provider, and said nothing about how a recurring investment should be authorised once rather than monthly. Judge GIFT City the way a good investor judges a broker, by what happens after the money moves, and trade has a scorecard while investing has neither.
What platforms actually need
The advisory industry around GIFT City sells entity setup, with the implication that any serious platform should have one. Most should not, at least not yet. A Global Access Provider licence earns its keep if you want a direct relationship with an overseas broker, enough volume for pooled FX to matter, or to be the broker on record. Short of that, the hub’s growth reaches you through cheaper bank aggregation, unified KYC and pooled FX via a payment provider.
The first decade of GIFT City was built by legislators, regulators and bankers, and they have done their part. The settlement infrastructure the market is asking for now belongs to the same family of work we already do. The first fix is mechanical: one API across every authorised dealer bank, so it stops mattering which bank a platform supports or which the investor uses. The second works around the missing mandate rather than replacing it. Money inside GIFT City can sit in escrow, in foreign currency, for up to 90 days. Instead of funding one month’s transfer, an LRS remittance becomes a pre-funded pool the platform draws from over time, which looks a lot like a standing mandate built through custody rather than a rail that does not exist yet.
Harsh Gupta is Senior Director – Cross Border Payments at Cashfree.
This article reflects regulatory positions as of July 2026, including proposals under public consultation that may change on finalisation. It is not legal, tax or investment advice. Verify current requirements against RBI and IFSCA notifications or consult a qualified adviser.
