GIFT Nifty Explained: What It Is and How to Invest in It

What is the GIFT Nifty index?

The GIFT Nifty index is a stock index that mirrors the Nifty 50 but specifically for trading in the GIFT City. The GIFT City is designed to attract global investors by offering financial services and capital markets infrastructure similar to international hubs like Singapore or Dubai. GIFT Nifty refers to a specific index that tracks the performance of the Nifty 50 index (A stock market index of the top 50 companies listed on the National Stock Exchange of India).

When was GIFT Nifty launched?

GIFT Nifty was launched on 31st July 2023. It shows a historical landmark in India's financial journey. The initiative is a partnership between The National Stock Exchange (NSE) and the Singapore Exchange (SGX) to bring global trading opportunities right into the premises of Gujarat International Finance Tec-City (GIFT City).

Why was GIFT Nifty Introduced?

It aims to strengthen India’s financial market and promote GIFT City as a global financial hub for trading and investment.

Earlier a lot of trading in Indian indices like Nifty derivatives happened in offshore locations like Singapore. By shifting this trading to GIFT City, India is keeping the trading Volume of its key Indices within the country.

How does GIFT Nifty benefit investors?

The reason behind the launch of GIFT nifty is that it benefits everyone, whether you are a retail investor with limited funds or a big institutional player.

1. One of the main features of GIFT Nifty is that it lowers the entry barriers for investors. GIFT Nifty makes it easier to start trading easily compared to traditional markets. So, even smaller investors can participate without huge upfront investment.
2. GIFT Nifty offers a nearly 21-hour trading window. This means investors can trade according to their convenience and across different time zones. This is a huge advantage. For Indian Investors, its equally exciting as they have now the flexibility to manage their trades even after regular working hours making it easier to balance investing with their daily lives.
3. Since GIFT City is a tax-friendly zone, it has a major financial advantage. Investing through GIFT Nifty reduces taxes and gives exemptions on certain transactions, which translates into higher net returns. For traders and Institutions alike, this tax efficiency makes GIFT Nifty a highly attractive platform.
4. When trading in GIFT Nifty, you get exposure to India’s top indices like the NIFTY 50 which represents the top-performing companies in the country. It’s an easy way to diversify your investments and tap into India’s growth story.
5. By consolidating trading activities under one place, GIFT Nifty creates a more active and transparent market. This results in reducing chances of price manipulation and ensures a fair-trading environment for all investors.
6. GIFT City is India’s first international financial service Centre (IFSC) designed to compete with global hubs like Dubai and Singapore. GIFT Nifty is attracting international Investors, showcasing India as a serious player in Global Finance.
7. GIFT Nifty makes it easier for international investors to access India’s equity derivatives market while creating a win-win situation for both the local players. In short, it put an end to the need for investors to operate in separate markets, creating a more streamlined and efficient trading experience.

GIFT Nifty is not just a technical upgrade or a new trading platform; it represents a significant shift in India’s financial landscape. For the first time, India has created an ecosystem that caters equally to local and international investors while presenting the country as a global trading destination.

The convenience is unparalleled. Lower margins and tax benefit makes GIFT Nifty accessible to small investors, enabling them to participate in India’s financial markets without requiring huge capital. Extended trading hours make it convenient for investors from all over the world, ensuring round-the-clock market activity. The platform’s integration with GIFT City highlights India’s ability to compete with global financial hubs like Singapore and Dubai.

From a Broader perspective, GIFT Nifty supports the government’s objectives of financial inclusion, economic self-reliance, and global integration. By consolidating the trading derivatives within India, it not only strengthens the country’s financial ecosystem but also boosts the visibility and creditability in Indian markets on the global stage.

How can investors leverage GIFT Nifty?

Whether you are an experienced trader or someone just starting, GIFT Nifty offers tools and opportunities tailored to your needs-

For seasoned investors

It’s an efficient way to diversify portfolios and access India’s high-growth market with tax advantages.

For retail investors

The low margins and simplified trading makes it a beginner- friendly option to explore India’s booming equity derivatives markets.

For International Players

The extended trading hours and streamlined access eliminate previous barriers, making India a more accessible and attractive Investment destination.

GIFT Nifty is your gateway to the future in Indian markets.

The question is no longer why GIFT Nifty was introduced but rather: Why wait to explore its potential?

If you are ready to take your investments to the next level and be part of this exciting journey, it’s time to act now. The world is watching as India reshapes its financial story- don’t miss your chance to be part of it.