Law Firms Race Into GIFT City as India's IFSC

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Law Firms Race Into GIFT City as India's IFSC Hits Scale

Top legal firms opening GIFT City offices signal maturation beyond offshore lending into fund management, aircraft leasing, and treasury operations.

GIFT City is crossing from experiment to institutional reality. Over the past two months, Khaitan & Co. opened offices on April 10, with SNG & Partners following suit — joining Trilegal, Cyril Amarchand Mangaldas, Economic Laws Practice, and others in building permanent legal infrastructure in Gujarat's International Financial Services Centre. The expansion is not cosmetic. These firms are moving into GIFT City because the transaction volume, regulatory maturity, and client sophistication now justify full-service presence outside India's metros.

The numbers confirm the pivot. Banking assets at GIFT City's IFSC crossed $111 billion by March 2026, up from roughly $2 billion when the hub launched in 2020 — a 55-fold increase. External commercial borrowing exposure stands at over $41 billion. More telling: 70% of India's external commercial borrowings in FY26 were raised from GIFT City, meaning Indian corporates now prefer IFSC structures over London, Luxembourg, or Singapore for cross-border capital raises.

What changed is the mandate breadth. The first wave of GIFT City activity centered on offshore lending and infrastructure financing — narrowly defined, high-volume, low-complexity work. The second wave is structural finance. Fund management entities operating in GIFT City now number 217 with capital commitments exceeding $39 billion; 35 aircraft lessors and 36 ship lessors manage substantial fleets; Global Capability Centres are clustering in the zone; private credit platforms are setting up operations. Each vertical demands different expertise — fund documentation, aircraft securitization, tax optimization, regulatory mapping. Khaitan & Co's own framing underscores this: the firm highlights opportunities in "family office structuring, cross-border investment platforms and international debt capital market," not the commodity offshore lending that defined the first years.

Why This Matters

The law firm influx is an early signal of competitive displacement. For decades, India-linked cross-border transactions were routed through Singapore, Dubai, Mauritius, or London — not because of legal superiority but because those hubs operated outside India's tax regime and offered jurisdictional neutrality. GIFT City undercuts that assumption by offering a domestic IFSC regulated by the International Financial Services Centres Authority alongside India's corporate law, creating the combination international investors want: regulatory clarity, tax efficiency, and minimal documentation risk for products booked in India.

The Union Budget 2026-27 extended the tax holiday to 20 consecutive years out of 25, giving investors the clarity needed to commit capital at scale. That subsidy plus the regulatory maturation means GIFT City now competes on substance, not arbitrage — and law firms move when they see sustainable deal flow.

What To Watch

Monitor the composition of new entities registering in GIFT City over the next 18 months. If the growth shifts definitively toward asset management, private credit, and domestic treasury operations (away from pure external borrowing), GIFT City will have broken the offshore-hub model and become a quasi-domestic financial center. Watch also for the first major dispute resolution under IFSCA's alternative framework — GIFT City CEO Sanjay Kaul acknowledged that dispute resolution tied to Indian courts remains a pain point for global investors. The first public arbitration award could accelerate adoption.