ADIA gets nod for $5bn fund in India’s new business hub

Gift City

The Abu Dhabi Investment Authority (ADIA), the UAE’s largest sovereign wealth fund, will set up a $4 billion to $5 billion fund in India’s latest special economic zone.

The regulatory authority for financial services at Gujarat International Finance Tec-City (Gift City) has granted in-principle approval to ADIA to set up the fund, the Reuters news agency reported, citing informed sources.

The Abu Dhabi fund announced its intention to establish a presence in the hub last July.

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The approval will make ADIA the first sovereign wealth fund to begin investing in India via Gift City.

The nod comes days before India’s prime minister, Narendra Modi, is due to visit Abu Dhabi to open the Baps Hindu Mandir, a traditional Hindu place of worship, address the World Government Summit in Dubai, and sign the first bilateral investment treaty with the UAE.

In September, Saudi Arabia’s Public Investment Fund (PIF) announced plans to set up an office in Gift City to invest $100 billion in the world’s fifth-largest economy.

Trade between the two countries reached $85 billion for the financial year ended March 2023, Indian government data shows.

The UAE is India’s third-largest source of foreign direct investment and its seventh-largest trade partner. It also hosts one of the largest Indian diaspora populations in the world, at 3.5 million.