On October 17, 2025, the International Financial Services Centres Authority (“IFSCA”) released a Consultation Paper[1] regarding proposed amendments to the IFSCA (Fund Management) Regulations, 2025 (“FM Regulations”). These changes are designed to further enhance the growth of the fund management industry at the Gujarat International Finance Tec-City (“GIFT-IFSC”). GIFT-IFSC has become a key hub for financial services, with an expanding number of Fund Management Entities (“FMEs”), domestic and international investors, and a growing variety of fund schemes, especially in venture capital, private equity, and other restricted schemes.
The fund management industry at GIFT-IFSC has seen impressive growth in a short span of time. As of June 30, 2025, there are:
- 177 (One Hundred and Seventy-Seven) FMEs are registered with IFSCA;
- The FMEs have launched 272 (Two Hundred and Seventy Two) schemes, attracting USD 22.11 Billion (Twenty Two Point One One Billion United States Dollars) in cumulative commitments; and
- USD 11.27 Billion (Eleven Point Two Seven Billion United States Dollars) have been invested, primarily into sectors across India, with 85% (Eighty Five Percent) of the investments targeted at the Indian market, supporting IFSCA’s objective to ‘onshore the offshore’ funds.
This expansion is indicative of IFSCA’s successful strategy to attract both domestic and foreign investors, including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs). The growth has been aided by a favorable taxation regime and robust regulatory support.
The current consultation focuses on updating the IFSCA (Fund Management) Regulations, 2022, which had initially laid the foundation for the fund management ecosystem. The FM Regulations, propose significant changes to further streamline processes, enhance investor protection, and support the evolving landscape of fund management activities.
Key Amendments and Proposals
The proposed amendments are categorized into three main areas: Ease of Doing Business, Investor Safeguards, and Clarifications. Each of these categories is designed to address specific challenges and opportunities faced by market participants.
- Enhancing Ease of Doing Business: The IFSCA recognizes that as the fund management industry matures, it is essential to streamline regulatory processes to promote a more efficient operational environment. The following proposals are aimed at reducing operational complexities and facilitating ease of business for FMEs:
- Streamlining Registration Processes for FMEs
- Expedited Scheme Launch Procedures
- Simplified Compliance Framework
- Enhanced Digitalization of Processes
- Cross-Border Facilitation
- Introducing Additional Safeguards: Given the rapid growth in the fund management space at GIFT-IFSC, it is essential to put in place safeguards that ensure the protection of investors and promote a healthy compliance culture. The key proposals under this category include:
- Enhanced Disclosure and Reporting Standards
- Investor Protection Mechanisms
- Third-Party Fund Management Services
- Strengthened Anti-Money Laundering (AML) and Know-Your-Customer (KYC) Measures
- Co-investment Safeguards
- Providing Clarifications: Clarity in the regulatory framework is essential for effective compliance and smooth operational execution. The following proposals are designed to clarify ambiguous provisions in the current regulations:
- Clarifying Investment Strategies for Restricted Schemes
- Venture Capital Schemes and Angel Investments
- Simplification of Fee Structures
- Taxation Clarifications
Public Comments and Feedback
IFSCA is actively seeking feedback from industry participants, fund managers, investors, and other stakeholders on the proposed amendments. Public comments on the changes are encouraged, and stakeholders can submit their suggestions in the manner specified in the consultation paper latest by November 06, 2025.
The consultation will help ensure that the FM Regulations are aligned with global best practices while being adaptable to the unique needs of the Indian market. The final regulations will incorporate feedback to make GIFT-IFSC a more competitive and transparent hub for fund management activities.
[1]https://ifsca.gov.in/CommonDirect/GetFileView?id=47a297ad49aaae8fa365313a9112b05b&fileName=Consultation_Paper_on_Amendments_to_IFSCA__Fund_Management__Regulations__2025_20251017_1119.pdf