To become global reinsurance hub, GIFT City must offer global regularity clarity

India’s ambition to position Gujarat International Finance Tec-City (GIFT City) as a global reinsurance hub is finally gathering scale, with more than 10 international insurance offices (IIOs) licensed for the facility that’s also dealing with 13 more potential applicants.

However, experts said GIFT City needs regulatory clarity of global centres such as London, Dubai or Singapore to become a reinsurance hub.

To be sure, GIFT city already extends several benefits to reinsurers seeking to make this an operational hub.


It offers no additional capital injection requirement, a 10-year tax holiday, and significantly lighter staffing and regulatory obligations than onshore India, where full-fledged operations demand a CEO, CFO, Chief Compliance Officer and strict key managerial personnel norms.

“These are major advantages,” said Satyendra Shrivastava partner Consortia Legal. “GIFT IFSC offers a light touch compliance regime…Further, there is capital efficiency because of no onshore solvency or onshore regulatory capital.”

Still, reinsurers need less documentation for compliance and ease of remittance.

India currently sends around $5 billion of reinsurance premium offshore annually, of which $1.5 billion is retrocession, according to industry estimates. If even $1 billion of the remaining pool shifts to GIFT City, nearly 30% of Indian reinsurance activity would stay within the country.

“So far, you can see the success by the number of people that have come in,” said Shasi Nair, CEO, Berkley Insurance Asia, which has started operations in India through IIO. “At some point, we’ll define success by the amount of reinsurance being transacted.”

Drawing parallels with Dubai’s DIFC, he added: “Fifteen years ago, when we started in DIFC, it was the same thing. They built the infrastructure - physical and regulatory - and they are now a $3–4 billion reinsurance market. That’s the hope for India as well.”

But the early operational experience has brought surprises.

Many insurers assumed that the International Financial Services Centre (IFSC) would offer frictionless cross-border movement and minimal documentation. Instead, they encountered full anti-money laundering (AML) and counter-financing of terrorism (CFT) checks, including detailed paperwork even for remittances as small as $5,000.

“Like any new regulatory regime, there will be initial hiccups on operational matters,” said Shrivastava. “For example, the IIO is a non-resident from an exchange control perspective but a resident from a tax perspective. The fact that an IFSCA is an SEZ also adds to one layer of complexity.”

He added that IFSCA is, however, addressing these challenges proactively.