Regulatory Expansion
IFSCA Proposes Expansion of Overseas Fund Distribution Framework for GIFT City—Consultation Underway
The International Financial Services Centres Authority (IFSCA) has released a consultation paper proposing to expand the list of overseas jurisdictions whose investment products can be distributed through GIFT City. The proposal would allow regulated distributors operating in GIFT IFSC to offer eligible investment products from additional international markets, including the European Union, the UAE, Singapore and Australia, subject to regulatory conditions.
| Announcement date | 22 July 2026 |
|---|---|
| Proposing authority | International Financial Services Centres Authority (IFSCA) |
| New jurisdictions proposed | European Union (excluding Croatia), UAE, Singapore, Australia |
| Current approved jurisdictions | United States, United Kingdom, Canada, France, Germany, Japan, South Korea, India and IFSC itself |
| Alignment framework | Jurisdictions already recognized under IFSCA's Video Customer Identification Process (V-CIP) framework; aligning distribution framework with existing V-CIP framework would facilitate cross-border investments while remaining consistent with applicable legal and regulatory requirements |
| Next step | IFSCA has invited public comments on the draft proposal before finalising the revised regulatory framework |
| Stated objective | Broadening investment choices for eligible investors, strengthening GIFT City's position as an international financial services hub and aligning its distribution framework with global practices |
| Who is affected | IFSCA-registered Distributors operating in GIFT IFSC; eligible investors (retail and institutional, subject to regulatory conditions) |
What IFSCA Proposed
IFSCA has proposed expanding the range of international investment products that can be distributed through GIFT City by widening the list of recognised overseas jurisdictions under its distribution framework. The proposal, released through a consultation paper, seeks to provide eligible investors with access to a broader selection of global investment funds while reinforcing GIFT City's role as an international financial centre.
Under the proposed changes, distributors regulated by IFSCA would be permitted to offer investment products from additional jurisdictions, including the European Union, the United Arab Emirates, Singapore and Australia, subject to compliance with prescribed regulatory requirements.
Current Framework and Limitations
At present, fund distribution activities within GIFT IFSC are limited to investment products originating from a specified list of jurisdictions. Currently, registered distributors can distribute capital market products originating from India, IFSC and seven identified foreign jurisdictions, including the US, UK, Canada, France, Germany, Japan and South Korea to retail and institutional investors.
Products from other foreign jurisdictions can only be distributed to sophisticated or accredited investors, creating a gap in market access for retail investors seeking international exposure.
Why the Expansion Matters
IFSCA observed that several major global fund jurisdictions remain outside the current framework for retail distribution. According to IFSCA, the Undertakings for Collective Investment in Transferable Securities (UCITS) funds domiciled in the UK, France and Germany are already eligible for wider distribution but similar funds established in Luxembourg and Ireland are not, although they have a wider global prominence.
IFSCA believes the proposal could significantly enhance business opportunities for Registered Distributors operating from GIFT City. Industry participants have argued that expanding the list would improve GIFT IFSC's competitiveness against other international financial centres and increase global investment choices for investors.
Selection Rationale: V-CIP Alignment
Instead of immediately including all requested jurisdictions, the regulator has proposed adding jurisdictions already recognized under its Video Customer Identification Process (V-CIP) framework. These include UAE, Singapore, Australia and European Union (excluding Croatia). The regulator said aligning the distribution framework with the existing V-CIP framework would facilitate cross-border investments while remaining consistent with applicable legal and regulatory requirements across jurisdictions.
The V-CIP framework enables digital customer onboarding, and by selecting jurisdictions already approved for this process, IFSCA is maintaining regulatory consistency while expanding market access.
Public Consultation and Next Steps
IFSCA has invited public comments on the draft proposal before finalising the revised regulatory framework. As of July 2026, the authority is in the consultation phase, seeking input from regulated distributors, fund managers, market participants, and other stakeholders before issuing the final framework.
No implementation date or timeline has been announced. The final framework is expected only after the public comment period closes and IFSCA incorporates stakeholder feedback.
Regulatory Safeguards
The consultation paper also seeks to ensure that only investment products originating from jurisdictions with recognised regulatory frameworks and appropriate investor protection standards are eligible for distribution. Distributors operating in GIFT IFSC would continue to be required to comply with due diligence, disclosure and other regulatory requirements.
Frequently asked questions
What are the four new jurisdictions being proposed?
The European Union, the UAE, Singapore and Australia, subject to regulatory conditions.
Can these funds be distributed to all investor types?
Products from the additional international markets can be distributed to eligible investment products to any category of clients through IFSCA-regulated distributors, subject to regulatory conditions. In contrast, products originating from other foreign jurisdictions can only be distributed to sophisticated or accredited investors.
Why did IFSCA select these specific jurisdictions?
The regulator has proposed adding jurisdictions already recognized under its Video Customer Identification Process (V-CIP) framework; aligning the distribution framework with the existing V-CIP framework would facilitate cross-border investments while remaining consistent with applicable legal and regulatory requirements across jurisdictions.
What is the timeline for implementation?
No implementation date has been announced. IFSCA has invited public comments on the draft proposal before finalising the revised regulatory framework. The final framework will follow the conclusion of the consultation period.
Which jurisdictions are currently approved for fund distribution?
Currently, registered distributors can distribute capital market products originating from India, IFSC and seven identified foreign jurisdictions, including the US, UK, Canada, France, Germany, Japan and South Korea.
Does this expand only to retail investors?
No. The proposal would allow regulated distributors operating in GIFT IFSC to offer eligible investment products from additional international markets, including the European Union, the UAE, Singapore and Australia, subject to regulatory conditions. Distribution applies to eligible investor categories subject to regulatory compliance.
Sources
- IFSCA proposes wider global fund access for investors through GIFT City distribution framework
- Now, GIFT City distributors can sell financial products of Australia, European Union, UAE and Singapore
- IFSCA Proposes Expanding Permitted Jurisdictions for IFSC Distribution Activities
- International Financial Services Centres Authority Official Website