Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company, said GIFT City can improve foreign investor access to the Indian market.

This proposal targets the streamlining of capital inflows from global institutional players. By simplifying the entry process, India could increase its appeal to large-scale international portfolios and diversify its investor base.

Shah said that the Gujarat International Finance Tec-City, known as GIFT City, could provide an omnibus facility [1]. Such a structure would be designed to attract investment from private wealth managers, banks, and insurance pools [1]. This approach allows for a more centralized point of entry for foreign capital, reducing the friction often associated with navigating local regulatory requirements.

However, the implementation of this facility requires strict oversight to maintain financial integrity. Shah said the process should involve careful selection of intermediaries to prevent round tripping of investments [1]. Round tripping occurs when domestic capital is sent abroad and then returned to the country under the guise of foreign investment to claim tax benefits or hide the origin of funds.

By vetting the intermediaries involved in the omnibus structure, GIFT City could mitigate these risks while still scaling its capacity to absorb global capital [1]. This balance of accessibility and regulation is central to the goal of making India a more competitive destination for international asset managers.

"GIFT City can offer omnibus facility for attracting investment from private wealth managers, banks and the insurance pool," Shah said [1].

He said that the integrity of the system depends on the quality of the partners involved. "The process should involve careful selection of intermediaries to prevent round tripping of investments," Shah said [1].

“GIFT City can offer omnibus facility for attracting investment from private wealth managers, banks and the insurance pool.”

The push for an omnibus facility in GIFT City represents a strategic effort to transition India from a fragmented investment landscape to a more institutionalized hub. If successful, this would allow the government to capture larger pools of global liquidity—specifically from insurance and pension funds—while using a controlled gateway to prevent the tax evasion and capital flight associated with round-tripping.