The Abu Dhabi Investment Authority (ADIA), the UAE’s largest sovereign wealth fund, has begun operations in India’s tax-neutral finance hub, Gujarat International Finance Tec-City (GIFT City).
The Indian government has promoted GIFT City as a “gateway for global capital and financial services,” and it is located in Prime Minister Narendra Modi’s home state of Gujarat. This key financial hub provides major benefits to businesses, including a 10-year tax break and tax exemptions on international capital transfers, as well as closeness to Indian markets.
ADIA’s plans to construct a base in GIFT City were initially announced in July 2023. Earlier this year, in February, reports surfaced that ADIA was intending to build a special $4 billion to $5 billion fund to invest in India via this financial centre. This decision is likely to greatly increase foreign investment in the country, hence improving India’s financial landscape.
The UAE is already India’s largest Arab investor, with investment totalling almost $3 billion in fiscal year 2023-24. With ADIA’s new operations, the UAE is poised to expand its financial presence in India, taking advantage of the tax breaks and strategic location provided by GIFT City.
