Abu Dhabi Investment Authority (ADIA), the UAE’s largest sovereign wealth fund, intends to establish a $4–5 billion investment fund in India through a tax-neutral finance hub in Gujarat. The fund has received preliminary approval from the regulatory authority at Gujarat International Finance Tec-City (GIFT City).
India and the UAE jointly made the announcement last July, but specific investment information remains undisclosed.
ADIA’s approval marks a milestone as the first sovereign wealth fund to invest in India via GIFT City, coinciding with PM Modi’s visit to Abu Dhabi. India-UAE trade reached $85 billion in fiscal 2023, with a significant Indian diaspora in the UAE.
ADIA aims to commence investments by mid-year, leveraging GIFT City’s offerings for both Indian and foreign assets. The Modi government seeks to position GIFT City as a premier global financial hub, offering incentives such as tax holidays.
ADIA and its subsidiaries benefit from long-term capital gains tax exemptions on Indian investments until March 2025. Despite a slow start, GIFT City has seen an increase in fund management activity, bringing in $30 billion from 95 funds and more than $2.93 billion invested by December 2023.
IFSCA is in discussions with other sovereign wealth funds for potential operations in GIFT City, signalling further growth opportunities.
