The Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the UAE, is establishing a substantial investment fund totaling $4-5 billion through India’s Gujarat International Finance Tec-City (GIFT City), situated in Prime Minister Narendra Modi’s home state.
In-Principle Approval and Regulatory Authority
- The regulatory authority overseeing financial services at GIFT City has granted in-principle approval to ADIA for setting up the fund.
- This development marks the first instance of a sovereign wealth fund initiating investments in India via GIFT City.
Announcement and Prior Reporting
- While ADIA’s intent 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 approval were not previously disclosed.
Upcoming Investments and Timeframe
- ADIA could commence investments through the fund by the middle of this year.
- The allocated funds will be gradually deployed into Indian markets over an extended period.
Significance of Partnership and Economic Context
- Prime Minister Modi’s upcoming visit to Abu Dhabi underscores the strengthening ties between India and the UAE.
- Bilateral trade between India and the UAE reached $85 billion for the financial year ending March 2023.
- The substantial Indian diaspora in the UAE, constituting nearly 35% of the total population, contributes to the robust relationship between the two nations.