The International Financial Services Centre Authority (Ifsca) is advancing new commodity trading regulations for GIFT City, with groundwork largely complete and only final government approvals pending. According to officials familiar with the development, the regulator expects to bring in the regulations around global commodity trading in three to six months once government approval is secured. The initiative addresses India's vulnerability as a major importer of crude oil and metals, with an expert committee in August 2025 recommending commodity trading promotion to provide a buffer against external supply chain risks.
Ifsca is simultaneously developing frameworks for real estate investment trusts (Reits) and infrastructure investment trusts (InvITs), with frameworks expected in just 30 days. As reported by officials, the regulator is working to iron out tax issues that need resolution before these investment vehicles can take off. A key proposal under consideration involves allowing Indian investors to access Reits backed by foreign assets through the liberalised remittance scheme (LRS). Market participants suggest GIFT City could replicate its success by creating a feeder mechanism where entities collect global capital and channel it directly into Indian Reits and InvITs.
The initiatives aim to shield India from global price volatility in oil and metals while reclaiming high-value trading activity currently lost to offshore hubs such as Dubai and Singapore. According to market experts, GIFT City offers significant advantages including global minimum tax exemptions and regulatory concessions that make it attractive for Indian and global companies. The move targets the four major global commodity trading hubs – Singapore, Dubai, Hong Kong, and Switzerland, with policymakers viewing GIFT City as a natural alternative to bring commodity trading activities onshore.
The expansion efforts coincide with growing corporate interest in GIFT City, with six listed companies already applying for licenses to set up treasury centres as reported by Mint. Ifsca is pushing for more corporate treasury offices to be established in the offshore hub, signaling increased institutional interest in the financial services centre. The development represents a strategic shift to position GIFT City as a comprehensive financial services hub rather than just a trading venue.
