Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the UAE, is setting up a large investment fund in total $4-5 billion through India’s Gujarat International Finance Tech-City (GIFT City)Located in the home state of Prime Minister Narendra Modi.
In-principle approval and regulatory authority
- The regulatory authority that oversees financial services in GIFT City has given in-principle approval to ADIA to set up the fund.
- This development is the first example of a sovereign wealth fund launching an investment in India through GIFT City.
Announcement and pre-reporting
- While ADIA’s intention to establish a presence in the hub was initially announced in a joint statement by India and the UAE last July, the specific investment amount and regulatory approvals were not previously disclosed.
Upcoming investments and deadlines
- ADIA may start investing through the fund by the middle of this year.
- The allocated funds will be gradually deployed in Indian markets over an extended period.
Importance and economic context of partnership
- Prime Minister Modi’s upcoming visit to Abu Dhabi underlines the strengthening relations between India and the UAE.
- Bilateral trade between India and UAE reached $85 billion in the financial year ending March 2023.
- The large number of Indian expatriates in the UAE, constituting approximately 35% of the total population, contributes to the strong ties between the two countries.