Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the United Arab Emirates (UAE), is set to establish a significant $4-5 billion fund for investments in India, as reported by Reuters, citing sources familiar with the matter.
The fund’s operations will be facilitated through a tax-neutral finance hub situated in the home state of Prime Minister Narendra Modi—Gujarat, specifically at Gujarat International Finance Tec-City (GIFT City). The regulatory authority overseeing financial services at GIFT City has granted ADIA in-principle approval to proceed with the establishment of this substantial fund, a development disclosed by the sources.
The announcement of ADIA’s intention to establish a presence in the hub was initially made in a joint statement by India and the UAE in July of the previous year. However, specific investment details and regulatory approval had not been previously disclosed.
A spokesperson for ADIA declined to comment on the recent development, according to the report. Additionally, an email to the International Financial Services Authority (IFSCA), responsible for regulating financial services in the hub, remained unanswered.
This approval from ADIA signifies a significant milestone as it becomes the inaugural sovereign wealth fund to venture into Indian investments through GIFT City. Notably, this regulatory green light aligns with Prime Minister Modi’s upcoming visit to Abu Dhabi for the inauguration of a prominent temple, underscoring the strengthening economic ties between the UAE and India.