India’s journey to third-largest economy to boost flows via GIFT IFSC: Subho Moulik

India’s journey towards becoming the world’s third-largest economy is set to unlock a fresh wave of global capital flows, with Subho Moulik highlighting that the GIFT IFSC could play a central role in channeling these investments.

In an interaction with Kshitij Anand of ETMarkets on the sidelines of GSMC 2.0 in GIFT City, Moulik, along with Vijay Krishnamurthy, shared insights on how the evolving ecosystem is positioning itself as a key gateway for both inbound and outbound capital flows.

The discussion underscored how rising geopolitical uncertainties, growing investor appetite for diversification, and regulatory support are accelerating the relevance of GIFT IFSC.


As India’s economic ambitions gather pace, the platform is increasingly being seen as a bridge seamlessly connecting domestic markets with global opportunities. Edited Excerpts –

Kshitij Anand: Vijay, let me start with you. In fact, the introduction of the Sensex derivative instruments on the exchange is just the starting point. What do we have to look forward to over the next few years?
Vijay Krishnamurthy: So, definitely, Sensex was a flagship product for us. Being a BSE Group company, it is indeed a flagship product. I would say it is a bellwether benchmark for the Indian industry and capital markets. Given India’s growth story, it becomes far more beneficial for investors to participate in Indian markets through Sensex via GIFT IFSC.

There are multiple advantages. One is that currency risk is eliminated because it is traded in dollars. It is a 22-hour trading exchange, covering multiple geographies. It is also a very tax-efficient platform. As you saw in the recent budget, STT is going up on futures, but here there is no STT, no CTT, no capital gains tax, and no GST. Additionally, as an exchange, we are currently not charging any transaction fees. So, all in all, it is nearly a zero-cost platform for someone to transact.

You are right in saying that Sensex is just the beginning, but launching our flagship product was very important. We are working on multiple aspects, with listings being one of the key areas. On the debt listing side, we already have a strong market share and have continued to lead. We have been introducing new debt products and are doing quite well, with a 90%+ market share. We have performed phenomenally and aim to further scale this segment.

On the equity side as well, we are starting to see some listings coming through, which is a positive development.

Very interestingly, there is also the GAP (Global Access Provider) license, for which proper regulations came in August. We are seeing strong traction here. The reason is that this is targeted at Indian investors, especially the growing base of affluent and new-age investors who are looking to diversify. Given geopolitical risks and global tensions, investors have realized the importance of not concentrating in a single market. Today, diversification is easier, with everything accessible at the click of a button on a mobile app.

GAP is therefore very important. At INX, we have a 100% subsidiary called INX GA, and we have tied up with multiple international brokers to provide this access. As per regulations, only exchange-based subsidiaries can offer unlisted products. We also plan to onboard large global AMCs and offer their mutual funds on this platform within this year.

So, these are some of the initiatives we are working on, apart from the Sensex offering. As an exchange, trading remains the most critical function. Currently, within the GIFT ecosystem, there are two main products—Sensex and GIFT Nifty. Our aim is to introduce as many new products as possible.

We are also seeing GIFT-based AMCs coming up, and we intend to enable their mutual funds or ETFs on our exchange platform. Bringing all of this together, our goal is to provide a wider range of products to our members.

Kshitij Anand: So, I think we can say that we have had a good and solid start, with more good things to come?
Vijay Krishnamurthy: Yes, absolutely. The foundation is being laid. Over the last one-and-a-half years, we have built a strong foundation. We have also received good support from the regulatory side, which has been receptive, progressive, and very proactive. All of this together helps in bringing new ideas forward, with regulators willing to work on them collaboratively. So, a solid foundation has been laid, and now the building needs to be erected.

Kshitij Anand: Also, a little bit on the participation side—where are you seeing participation from? Is it institutions, corporates, or NRIs?
Vijay Krishnamurthy: Currently, if I were to categorize it, it is largely the broker-dealer institutional space that is participating, primarily through proprietary trading in the derivatives segment, since it is not allowed for Indian resident investors.

Kshitij Anand: From your vantage point, how do you see greater participation coming in from global investors and NRIs?
Subho Moulik: GIFT is going to become a gateway for two-sided flows. Over the past year, US markets have performed well, although there has been significant volatility and froth. Indian markets, comparatively, have performed less well. However, from a long-term perspective, India will become more prominent as it moves toward becoming the third-largest economy. Naturally, investors will want exposure to India, and GIFT will serve as that gateway.

So, those inflows will be equally important, and I am personally very bullish about it. As Vijay mentioned, there is also a growing base of Indian investors looking to diversify globally. Multiple participants are working together to enable this, and the case for it remains very strong.

Kshitij Anand: Vijay, let me come back to you. As Subho rightly pointed out, India is on its way to becoming the third-largest economy, which could open the doors to significant global capital. Given that you already have a strong debt platform, how does that help in attracting such flows?
Vijay Krishnamurthy: Interestingly, in 2017, when the first exchange at IFSC was inaugurated by our Honourable Prime Minister, a very clear vision was laid out. The idea was that this platform should become a price setter for key commodities and also enable global capital raising.

From that perspective, global capital raising is now slowly gaining traction. For example, last year we had an international entity, DFCC from Sri Lanka, list its green bond here. We are gradually seeing momentum build in that segment.

Given the global outreach we are now pursuing, and India’s growing prominence, there is significant visibility for issuers, especially from neighbouring countries, who are looking to leverage this platform to raise capital and gain global attention. So, this is definitely gaining traction.

Another area we are exploring is partnerships with global exchanges, which could enable dual listings—where securities listed here are available there and vice versa. This would open up further opportunities and enhance visibility.

More importantly, if a global entity raises capital here, Indian investors also get the opportunity to invest. The demand for diversification among Indian investors is growing significantly, and this platform helps bridge that gap.

In fact, there are several companies looking to raise equity, and many are in the pipeline. Everyone is waiting for the first IPO to go through successfully and set a precedent. As they say, the first milestone is always the toughest. Once that happens, we expect many more to follow.

This could also pave the way for global companies, especially tech firms in the US led by Indian entrepreneurs, who are keen to tap into this opportunity. Listing via GIFT allows them to access both global and Indian investors without the need to set up a full presence in mainland India and comply with multiple additional requirements.

So, it is truly a win-win situation, and I strongly believe that in the coming years, this ecosystem will evolve and flourish significantly.

Kshitij Anand: Subho, to you—apart from equities and debt, are there any product innovations that could amplify the GIFT proposition?
Subho Moulik: Vijay has already mentioned a few of those, and I know he is working very hard on them. I think dual listing is very interesting because it creates an investable base that is quite attractive. Given the cost differential—and whether the regulator will approve it or not is not my domain—if you could introduce derivatives on select Indian stocks, not the entire market but a subset, and provide more liquidity, I think there would be significant demand for that. This is especially true given the cost advantages and the fact that currency hedging may not be required.

I believe a few such moves could completely transform the GIFT ecosystem. They are not very difficult to implement, and some of them are probably already in the works. Ultimately, the core driver will be that India is an investment destination, and that will continue to grow. The question is, what role does GIFT play in that journey? While there is clearly a role for direct participation in domestic markets, I believe GIFT also has a very important role to play. But Vijay can elaborate further.

Vijay Krishnamurthy: It actually acts as a bridge to the hinterland. The IFSC is essentially a bridge to mainland India. And just to pick up from what Subho said—we already have some derivatives on single stocks available. However, these are largely “me-too” products, similar to what already exists in the domestic market, where investors are already participating through the FPI route or otherwise.

The typical question we get from global brokers is: what is in it for me? If there are only one or two products, why should they set up a presence here? But the answer lies in cost efficiency and tax efficiency, which are becoming key differentiators.

Even though there are currently limited products, I can confidently say this is the right time to set up here because many new products are in the pipeline, which will be far more beneficial. We are working on introducing products that are not available in mainland India. The idea is to create a one-stop shop where someone operating from an international jurisdiction within India can trade both Indian and global markets.

This will be a key differentiator—it allows participants to be based in India, operate within an international jurisdiction, trade Indian products, access global markets, and benefit from cost and tax efficiencies.

Subho Moulik: I think that is a very important point. For example, with pension fund regulations coming in, the ability to operate within a long-term, tax-advantaged environment—say over 20 years—is significant.

By the way, we were among the first brokers to obtain a license here, at a time when many were still evaluating where GIFT would go. From my personal experience, the regulator takes both regulation and development very seriously. Development is a priority, but not at the cost of regulation.

So, I believe product launches—often driven jointly by market infrastructure institutions (MIIs), participants like us, and the regulator—will continue at a strong pace. I am very bullish on GIFT as a jurisdiction.

Kshitij Anand: Any closing thoughts, Vijay?
Vijay Krishnamurthy: This is a very opportune time. Do consider GIFT as a compelling investment avenue. Do explore IFSC, and keep a close watch on India, because there is a lot set to unfold in the coming years.

Subho Moulik: GIFT is a two-way gateway. When we look back in 2030, we will likely say that 2025–26 was when it all truly began. I believe it will evolve into a financial centre we can all be proud of.

Kshitij Anand: Absolutely. I think it will seamlessly integrate India with global markets—that seems to be the common vision we are all aligned with.
Vijay Krishnamurthy: Yes, that is exactly the point—it will enable seamless integration with global markets. One important aspect of the regulatory framework here is that it has not simply copied any one jurisdiction. Instead, it has adopted global best practices while retaining its core principles.

The core, financial stability and investor protection, remains intact. At the same time, global features and efficiencies have been incorporated thoughtfully. This makes it a very compelling ecosystem, supported by a progressive, proactive, and development-oriented regulator.

I believe people should view GIFT from that perspective.

Subho Moulik: Also, I think what you are starting to see now is more interaction between different market participants. This does not typically happen in India because the ecosystem is quite entrenched, with legacy institutions that have 50 years of history. Much of the innovation happened decades ago when things were more dynamic.

Now, you are seeing a lot more inter-participant innovation, collaborations, and tie-ups. This will continue to increase and will give the ecosystem significant momentum.

Vijay Krishnamurthy: I agree, because partnership is the way forward in GIFT. We are all at a very nascent stage and need to build off each other. It is about leveraging each other’s strengths so that we can grow together in this journey.

It will largely be a partnership-driven model—where we say, “I have this, you have that, can we come together?” If we can create that synergy, we can grow faster and take bigger leaps. I believe that is the model that will work far better here than anything else.

Subho Moulik: Correct. Instead of a zero-sum game where 5 minus 5 equals zero, the idea is to create a multiplier effect—where 5 multiplied by 5 becomes 25. Traditionally in India, it has been more like 5 plus 5 equals 10, where everyone focuses on their share. Here, the idea is to become a force multiplier.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times)