GIFT IFSC Updates July 2026: RBI, IFSCA, REITs & FATF

July 01, 2026: RBI Clarifies FDI Reporting Framework for IFSC
Regulated Entities
The Reserve Bank of India (RBI), in consultation with the International Financial Services
Centres Authority (IFSCA), has clarified the reporting framework for Foreign Direct
Investment (FDI) received by regulated entities in GIFT IFSC.
The clarification confirms that while FDI regulations under FEMA do not apply to
regulated entities operating in IFSC, information on foreign investments is still required to
enable the compilation of India's Balance of Payments (BoP) statistics.
As a result, regulated entities in IFSC will no longer be required to file the Annual
Foreign Liabilities and Assets (FLA) Return with the RBI. Instead, the responsibility for
collecting the required investment data will shift to IFSCA, which will issue a separate
reporting framework and operational guidelines in due course.
Until such guidelines are notified, regulated entities have been advised to await further
instructions from IFSCA.
Why this matters: The clarification eliminates ambiguity around FLA reporting obligations
for IFSC entities, reinforces the distinct regulatory framework applicable to GIFT IFSC, and
is expected to streamline compliance by creating a dedicated reporting mechanism through
IFSCA while continuing to meet India's statistical reporting requirements.

AUG 2026 pg. 2
July 02, 2026: IFSCA and Japan's FSA Strengthen Regulatory
Cooperation
The International Financial Services Centres Authority (IFSCA) and Japan's Financial
Services Agency (FSA) have taken a significant step towards deepening financial sector
collaboration by executing an Exchange of Letters (EoL) during the 16th India–Japan
Annual Summit held in New Delhi.
The Exchange of Letters, signed on June 26, 2026, establishes a formal framework for
regulatory cooperation between the two authorities across areas of mutual interest.
Under this arrangement, IFSCA and the FSA will collaborate through the exchange of
information on regulatory developments relating to financial products, financial services and
financial institutions. The partnership will also facilitate the sharing of supervisory
approaches, policy initiatives and global best practices, helping both regulators strengthen
their respective financial ecosystems.
Why this matters: The agreement reflects the growing strategic partnership between India
and Japan in financial services and reinforces GIFT IFSC's ambition to integrate more closely
with leading global financial centres. Enhanced regulatory cooperation is expected to support
cross-border business, promote knowledge sharing, and create a more robust and
internationally aligned financial ecosystem.

AUG 2026 pg. 3
July 15, 2026: IFSCA Unveils Roadmap to Position GIFT IFSC as a Global
REIT & InvIT Hub
The International Financial Services Centres Authority (IFSCA) has released the report of its
Expert Committee on the development of Real Estate Investment Trusts (REITs) and
Infrastructure Investment Trusts (InvITs) in GIFT IFSC, outlining a comprehensive
strategy to transform the centre into a global gateway for real estate and infrastructure
financing.
The report comes at a time when India's infrastructure ambitions require massive long-term
capital, with an estimated USD 4.5 trillion of infrastructure investment needed by 2040 and
the real estate market projected to reach USD 5.8 trillion by 2047. Recognising GIFT IFSC's
potential to channel global capital into these sectors, the Expert Committee has proposed a
series of regulatory, tax and product innovations to enhance the jurisdiction's global
competitiveness.
Among the key recommendations are the introduction of Mortgage REITs (mREITs),
expansion of the REIT and InvIT ecosystem to include Global and Mixed REITs/InvITs,
faster capital-raising mechanisms, investor protection measures, and tax parity with domestic
REITs and InvITs. The Committee has also recommended easing inter-regulatory constraints,
including exemptions from certain sectoral caps, lock-in requirements and overseas
investment limits, while enabling dual listings on GIFT IFSC exchanges.
Why this matters: If implemented, these recommendations could significantly strengthen
GIFT IFSC's position as an international platform for infrastructure and real estate
investments. By creating a globally competitive regulatory and tax framework, GIFT IFSC
can attract sovereign wealth funds, pension funds and other long-term institutional investors,
supporting India's infrastructure financing needs while reinforcing its emergence as a leading
international financial centre.

AUG 2026 pg. 4
July 17, 2026: IFSCA Issues Advisory on Updated FATF High-Risk and
Increased Monitoring Jurisdictions
The International Financial Services Centres Authority (IFSCA) has advised all regulated
entities to take note of the latest Financial Action Task Force (FATF) updates on
jurisdictions identified as having strategic deficiencies in their Anti-Money Laundering
(AML), Countering the Financing of Terrorism (CFT), and Countering Proliferation
Financing (CPF) frameworks.
Under the FATF's June 19, 2026 review, North Korea (DPRK) and Iran continue to remain
subject to a Call for Action, while Myanmar remains subject to enhanced due diligence
measures. Additionally, Bosnia and Herzegovina and Iraq have been added to the list of
jurisdictions under increased monitoring, whereas Algeria and Namibia have been removed
following improvements in their AML/CFT frameworks.
IFSCA has advised regulated entities to incorporate these updates into their risk-based
AML/CFT/CPF compliance frameworks when assessing customer relationships and cross-
border transactions. At the same time, the Authority has clarified that the advisory does not
prohibit legitimate trade or business transactions with the identified jurisdictions,
provided appropriate risk assessment and due diligence measures are followed.
Why this matters: The advisory reinforces IFSCA's commitment to aligning GIFT IFSC
with global financial integrity standards. By ensuring that regulated entities remain
responsive to evolving FATF guidance, the Authority aims to strengthen the resilience,
credibility, and international reputation of GIFT IFSC as a trusted global financial centre.