Why GIFT City is Becoming a Global Hub for Debt Investment

India is moving towards becoming a strong global economy, and a key part of this journey is building better access to capital. One major development supporting this goal is the rise of GIFT City as an international financial center. It is now gaining attention from global investors and issuers for debt securities, especially foreign currency bonds.

This article explains how GIFT City is attracting international investments, what is driving its growth, and why it matters for both global investors and Indian businesses.

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Growing Need for Global Capital Access

India’s corporate bond market is still developing, contributing around 16% of GDP. In comparison, developed economies have much larger bond markets. This gap shows that India has strong potential to raise long-term funds through bonds instead of depending only on banks.

With increasing demand for infrastructure and industrial growth, accessing global capital has become essential. GIFT City is playing an important role by connecting Indian businesses with international investors.

Strong Regulatory Framework Builds Trust

One of the biggest reasons for the growth of debt listings in GIFT City is its well-defined regulatory structure. The IFSCA Listing Regulations 2024 provide clear rules for issuing and listing bonds.

These regulations ensure the following:

• Transparent disclosures for investors

• Simplified listing procedures

• Alignment with global financial standards

Issuers must provide accurate information through offer documents, helping investors make informed decisions. Credit ratings are also required, which increases trust and reduces risk for global investors.

Easy Access for Global Investors

Debt securities listed in GIFT City can be held through international depositories such as global central securities systems. This allows foreign investors to participate easily without complex processes.

At the same time, Indian issuers can raise funds in foreign currencies, making it easier to attract global capital. This combination makes GIFT City a bridge between India and international markets.

Key Market Growth Numbers

Recent data shows strong growth in debt listings:

• Total debt securities listed reached around 68 billion USD by December 2025

• ESG-labelled bonds accounted for about 16.18 billion USD, or 24% of total listings

• In FY 2024–25 alone, 8.6 billion USD worth of debt securities were listed

• Out of this, 6.99 billion USD came from fresh issuances

These numbers highlight rising global confidence in GIFT City as an investment destination.

ESG Bonds Driving International Investment

Environmental, Social, and Governance (ESG) bonds are becoming a major focus area. These include green bonds and sustainable bonds that fund projects related to clean energy and social development.

Global investors are actively looking for such opportunities, and GIFT City has created a framework aligned with international standards. This has helped attract large investments in ESG debt instruments.

Additionally, a new transition bond framework allows industries with high carbon emissions to raise funds while committing to sustainability goals. This further expands the investor base.

Cost and Tax Benefits Attract Issuers

Another strong advantage is cost efficiency. Listing fees and compliance costs in GIFT City are lower compared to many global financial centers.

Tax benefits also play a key role:

• Domestic issuers benefit from a reduced withholding tax of 9 percent

• IFSC-based issuers can enjoy zero withholding tax on interest

These financial advantages make it attractive for companies to raise funds through this platform.

Opportunity for Indian Businesses

While global investment is the main focus, Indian companies also benefit significantly.

They can:

• Raise funds in foreign currency

• Access a wider investor base

• Reduce dependence on domestic banks

Recent policy changes by the Reserve Bank of India are expected to make foreign borrowing easier. This will likely increase bond issuances and further boost listings in GIFT City.

Entry of Foreign Issuers Expands Market

A major milestone has been the entry of foreign companies listing their bonds in GIFT City. This shows that the platform is no longer limited to Indian issuers.

It is now becoming a true international marketplace, opening doors for investments from Asia, Africa, and other emerging regions.

Rising Global Confidence in India

India’s improving sovereign credit ratings are also supporting this growth. Upgrades by global rating agencies reflect strong economic fundamentals and stable growth expectations.

This builds confidence among international investors and encourages them to invest in Indian-linked financial instruments through GIFT City.

What This Means for Investors

For global investors, GIFT City offers:

• Access to emerging market opportunities

• Diversification through foreign currency bonds

• Exposure to ESG investment options

For Indian investors and businesses, it provides a gateway to global capital and better financial flexibility.

Conclusion

GIFT City is steadily transforming into a global hub for debt investments. With strong regulations, tax benefits, and growing international participation, it is creating new opportunities for both investors and issuers.

As global capital continues to look for stable and high-growth markets, GIFT City is well-positioned to become a preferred destination for cross-border debt investments in the coming years.

Connect with CA Gaurav Kanudawala, Founder of GIFT CFO.

Call: +919726372715 Email: info@giftcfo.com

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