MUMBAI: Growing geopolitical tensions in West Asia are leading some global investors and non-resident Indians to reevaluate their concentrated investments in Dubai. This has resulted in increased inquiries about India’s International Financial Services Centre at GIFT City.
While Dubai continues to be a major capital hub for wealth management and investments, recent market volatility is prompting a diversification strategy, as investors look for jurisdictions that offer regulatory stability and are closer to growth markets like India.
“The geopolitical instability in West Asia is reflected in the rising interest for office space at GIFT City, particularly among institutions and intermediaries who are considering an India-linked base within the IFSC,” commented Aaryan Shah, Associate Director at Savvy Group. “We’re observing a gradual move towards a ‘dual-hub’ strategy, instead of a complete relocation from Dubai. The conversations are more focused on regulatory certainty and long-term presence.”
He also mentioned that incentives introduced in the 2026-27 budget alongside enhancements in social infrastructure are bolstering investment inflows and enhancing long-term leasing prospects at India’s unique IFSC.
The budget allows for a 100% tax deduction on specified income for IFSC units for 20 consecutive years within a 25-year period, as opposed to the previous 10-year limit. Post this duration, business income from IFSC operations will attract a tax rate of 15%, in contrast to the 35% rate applicable to overseas firms in other parts of India.
“In recent months, following significant infrastructure developments, GIFT City is becoming a central financial hub,” stated Anuranjan Mohnot, Managing Director at Lumos Equity Advisors. “The recent geopolitical developments in the Middle East have expedited this transition. Improvements in social infrastructure, relaxed policies, the entry of foreign universities, and a competitive real estate market have made GIFT City appealing compared to other global financial centers.”
Property consultants noted a spike in discussions, particularly from UAE-based investors exploring cross-border investment structures. “We’re receiving more inquiries from Gulf-based clients looking to mitigate geographic risks,” shared a senior executive from an international property consultancy. “Their interest centers not on leaving Dubai, but rather on establishing an additional layer of security and flexibility.”
GIFT City, with its foreign currency-denominated ecosystem, tax advantages, and unified regulatory framework under the International Financial Services Centres Authority, is being positioned as a conduit for global capital entering India. This is especially relevant in the domains of fund management, leasing, and structured finance. The focus is shifting from merely efficiency and tax optimization to also encompassing geopolitical risk mitigation, with India regarded as a comparatively stable macro environment. GIFT City allows investors to engage with this without fully relocating their capital. Stakeholders, however, advise caution against making too strong claims about this shift, as Dubai’s deep liquidity, well-established legal frameworks, and mature ecosystem, anchored by the Dubai International Financial Centre, still heavily attract investors, with Indian investors playing a significant role in its real estate and financial markets.
