Artha Bharat Investment Managers IFSC is shifting two investment funds from Gujarat International Finance Tec-City, commonly known as GIFT City, to Abu Dhabi Global Market, citing uncertainty over taxation and the burden of meeting regulatory conditions.
The development was reported on October 20, 2026. The fund management entity, which manages more than $800 million in assets at the financial centre, is setting up a new fund in Abu Dhabi. Investors in the affected funds may subsequently shift to the new structure.
Editorial Insight
Key Highlights
Important points readers should notice.
Issue/Event: Artha Bharat plans to relocate two funds to Abu Dhabi Global Market.
Location: GIFT City, Gujarat, and Abu Dhabi, United Arab Emirates.
Authority/Organisation: Artha Bharat Investment Managers IFSC and the relevant financial-centre regulators.
Action Taken: The firm is establishing a new Abu Dhabi fund structure, citing tax uncertainty and compliance concerns.
Impact: The move highlights the importance of predictable rules and investor flexibility for international financial centres.
The funds involved include the master fund of the $112 million Artha Global Multiplier Fund, which primarily invests around a US consumer theme, and the recently launched Artha Bharat Absolute Return Fund, an arbitrage strategy investing in Indian securities.
The company has clarified that the relocation does not mean it is abandoning GIFT City. Other funds will continue to be managed from India, with the centre retaining risk-management and technology-support functions for those operations.
Why the fund manager is moving
Editorial Analysis
Why This Matters
GIFT City competitiveness: Regulatory certainty can influence whether fund managers choose India for international operations. Investor access: Fund structures and minimum investment thresholds affect who can participate. Tax clarity: The practical application of deductions and eligibility conditions can shape business decisions. Financial-centre competition: Abu Dhabi and other jurisdictions compete to attract global fund activity. No blanket conclusion: One manager's decision does not prove a wider exodus from GIFT City.
The company has pointed to uncertainty over tax deductions and the conditions attached to operating as a fund management entity in an international financial services centre. It has also raised concerns about withholding taxes on payments to overseas service providers and restrictions that can affect which investors a fund is allowed to accept.
Section 80LA of the Income Tax Act provides deductions for specified income earned by eligible units, including certain units in international financial services centres. The treatment of a particular entity depends on the applicable legal conditions and its eligibility; the provision should not be understood as a blanket tax exemption for every fund operating in GIFT City.
The fund manager has said it was denied a deduction it had sought and is pursuing the matter. That dispute is one part of a broader set of concerns involving the cost and complexity of maintaining eligibility under the relevant framework.
Why Abu Dhabi is being considered
Abu Dhabi Global Market is an international financial centre that offers a regulatory and legal framework for investment and financial services businesses. According to the company's explanation, the proposed structure may provide greater flexibility around investor participation and fund operations.
The firm has also highlighted the minimum investment requirements of its existing funds. A lower minimum ticket size in the planned Abu Dhabi structure could make the offering accessible to a wider investor base, subject to regulatory eligibility and the final terms of the fund.
The company is also pursuing a licence for the new structure. The relocation should therefore be described as a process underway, not as a completed transfer of every affected investor or fund asset.
What this means for GIFT City
GIFT City was developed to attract international financial activity, investment management, banking and other cross-border services to India. Its appeal depends partly on tax treatment, regulatory clarity, access to skilled professionals and the ease of serving eligible investors.
The movement of two funds does not establish that the broader GIFT City model has failed. However, it highlights the importance of predictability: investors and fund managers need to understand how eligibility rules, deductions, investor restrictions and compliance obligations will apply over time.
A financial centre competes not only through incentives but also through the certainty and practical usability of its rules. If companies find that the conditions attached to an incentive are difficult to interpret or maintain, they may compare alternative jurisdictions.
What investors should understand
The announcement does not mean that retail investors can automatically invest in the new Abu Dhabi funds, nor does it establish that existing investors will experience an immediate change. Any transfer would depend on the new structure, its licensing, investor eligibility, documentation and the arrangements communicated by the fund manager.
Investors should rely on formal notices and fund documents for information about their holdings, redemption rights, fees, tax treatment and any proposed transfer. The relocation itself is not evidence that the funds have delivered poor performance or that all India-based international funds face the same difficulties.
