New FDI Reporting Framework for IFSC Regulated Entities

The reporting framework for foreign investment in India's International Financial Services Centre is evolving to better align with the unique regulatory structure governing IFSC regulated entities. In a recent development, the Reserve Bank of India (RBI), in consultation with the International Financial Services Centres Authority (IFSCA), has revised the Frequently Asked Questions relating to the Annual Return on Foreign Liabilities and Assets (FLA) under FEMA, 1999.

The updated clarification introduces important changes to how foreign direct investment (FDI) received by regulated entities in IFSC will be reported, providing greater regulatory clarity while ensuring that the information required for India's Balance of Payments (BoP) statistics continues to be collected.

Understanding the Regulatory Update

The revised FAQs clarify that although the Foreign Direct Investment policy framework does not apply to investments made in regulated entities operating within the IFSC, information relating to such investments continues to remain important for compiling India's Balance of Payments data.

Accordingly, regulated entities in IFSC will no longer be required to submit the Annual Foreign Liabilities and Assets (FLA) Return directly to the Reserve Bank of India.

Instead, IFSCA will separately prescribe the reporting mechanism and issue detailed instructions regarding the submission of the required information.

This clarification creates a reporting framework that is more closely aligned with the regulatory architecture of GIFT City while reducing duplication in reporting requirements.

Why This Matters for Regulated Entities

For financial institutions, fund management entities and other regulated businesses operating in the IFSC, regulatory reporting is a critical part of ongoing compliance.

The revised framework clearly distinguishes between the applicability of India's FDI regulations and the statistical reporting obligations required for national economic reporting.

Instead of submitting information through the RBI's FLA reporting mechanism, regulated entities will eventually report the required information in accordance with instructions issued by IFSCA.

This approach is expected to improve reporting consistency while allowing the sector-specific regulator to administer reporting requirements for IFSC entities.

FDI Reporting Framework for IFSC Regulated Entities

Suggested placement: Insert after the 'Why This Matters for Regulated Entities' section and before 'What Businesses Should Do'.

Reporting Area	Latest Position
FDI Policy Applicability	Investments in IFSC regulated entities are outside the FDI policy framework.
Annual FLA Return	IFSC regulated entities are not required to submit the Annual Foreign Liabilities and Assets (FLA) Return to the Reserve Bank of India.
Balance of Payments (BoP) Data	Investment data will continue to be collected for compiling India's Balance of Payments statistics.
Reporting Mechanism	IFSCA will issue separate instructions for submission of the required information.
Current Compliance Position	Regulated entities should await further guidance from IFSCA before implementing the revised reporting process.

What Businesses Should Do

Although the revised FAQs provide immediate clarity regarding FLA reporting, regulated entities should continue monitoring further communications from IFSCA.

Businesses should consider:

• Reviewing existing FDI reporting processes

• Identifying information currently maintained for FLA reporting

• Preparing internal systems for future reporting requirements

• Monitoring IFSCA notifications for operational guidance

• Coordinating with compliance, finance and regulatory reporting teams

Taking these preparatory steps will enable organisations to adapt quickly once the Authority publishes the reporting framework.

Supporting Regulatory Efficiency

The clarification reflects continued coordination between RBI and IFSCA to simplify regulatory reporting while ensuring that important economic information remains available for national statistical purposes.

As the IFSC ecosystem continues to grow, a dedicated reporting mechanism administered by IFSCA has the potential to create greater operational efficiency while maintaining transparency across the international financial services sector.

How Gift CFO Can Help

Gift CFO assists financial institutions, fund managers, fintech companies, family offices and international businesses with GIFT City advisory, regulatory compliance, FEMA advisory, reporting obligations, entity structuring and cross-border financial solutions. Our team helps organisations interpret evolving regulations and implement practical compliance processes that support long-term business growth.

DISCLAIMER: This article is published for informational, educational, and analytical purposes only. It does not constitute legal advice, regulatory guidance, trade compliance advice, or a solicitation of any kind.

All information in this article is based on IFSCA Circular No. IFSCA-PMTS/10/2023-Precious Metals/2026/2 dated 15th June 2026, issued under Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, read with Regulation 78 of the IFSCA (Bullion Market) Regulations, 2025. This circular amends the original Circular dated 10th October 2025 on import of gold or silver by Qualified Jewellers and valid India-UAE CEPA TRQ holders through IIBX, as previously updated on 2nd January 2026.

References to DGFT Notifications 17/2026-27 (dated 16th May 2026) and 19/2026-27 (dated 2nd June 2026) are based on information contained within the IFSCA circular. Readers should independently verify the full text of these DGFT notifications for complete details.

A separate, updated Consolidated Circular incorporating these amendments is being issued by IFSCA. Readers should refer to the official, most current Consolidated Circular available at www.ifsca.gov.in under Legal Framework → Circulars for authoritative and up-to-date compliance requirements.

Eligibility for Qualified Jeweller notification, import authorisation requirements, and applicable policy conditions may vary based on entity type, SEZ status, ITC(HS) classification, and other factors specific to each applicant. Entities are strongly advised to consult qualified legal, customs, trade compliance, and tax professionals before undertaking any bullion import transaction through IIBX.

The publisher is not a law firm, customs broker, or IFSCA-regulated entity. Nothing in this article constitutes legal or regulatory advice