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The International Financial Services Centres Authority (IFSCA) has released the report of its Expert Committee on the development of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in GIFT IFSC, outlining a comprehensive roadmap to strengthen the international financial centre as a global platform for real estate and infrastructure financing. The committee, chaired by former SEBI Whole Time Member Ananta Barua, has recommended regulatory, taxation and inter-regulatory reforms, alongside new investment products, to attract long-term domestic and foreign capital. The report also proposes introducing Mortgage REITs, enabling global and mixed REIT structures, improving capital-raising mechanisms, and creating tax parity with SEBI-regulated investment trusts. The recommendations are intended to support India's long-term infrastructure financing needs and expanding real estate sector by encouraging greater participation from global institutional investors.
The International Financial Services Centres Authority (IFSCA) has published the report of the Expert Committee on the Development of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in GIFT IFSC, setting out a policy roadmap aimed at strengthening the international financial centre as a global gateway for real estate and infrastructure financing. Released this week, the report outlines a series of regulatory, taxation and market development measures intended to attract long-term domestic and overseas capital into income-generating assets.
According to IFSCA, REITs and InvITs have become established investment vehicles for channelling capital into completed real estate and infrastructure assets while enabling developers and asset owners to monetise operational projects and reinvest the proceeds into new developments. The authority noted that units of these trusts are traded on stock exchanges, allowing investors to gain exposure to these asset classes without directly owning the underlying assets. Since FY 2019-20, REITs and InvITs regulated by the Securities and Exchange Board of India (SEBI) have mobilised around INR 2 lakh crore through asset monetisation and capital formation.
The report highlights the growing financing requirements of India's infrastructure and real estate sectors. It states that India is estimated to require investments of around USD 4.5 trillion in infrastructure by 2040, while the country's real estate market is projected to reach USD 5.8 trillion by 2047. According to the committee, achieving these targets will require mobilisation of substantial patient capital from both domestic and international investors.
IFSCA had constituted the Expert Committee in January 2024 under the chairmanship of former SEBI Whole Time Member Ananta Barua. The panel comprised representatives from the real estate, infrastructure, investment banking, financial services, legal, consultancy, stock exchange and regulatory sectors. It was tasked with recommending measures to develop REITs and InvITs in GIFT IFSC, identify legal, taxation and regulatory reforms, and suggest innovative product frameworks.
Among its key recommendations, the committee proposed introducing Mortgage REITs (mREITs) in GIFT IFSC to create an alternative source of real estate financing and support securitisation markets. It also recommended extending existing anti-greenwashing principles applicable to ESG-labelled debt securities to REITs and InvITs marketed as green investment products. The report further suggested adopting a calibrated approach towards Small and Medium REITs while monitoring developments in tokenisation of real-world assets.
The committee additionally recommended amendments to the IFSCA (Fund Management) Regulations, 2025 to introduce mechanisms such as inducted sponsors, re-designated sponsors, self-sponsored investment managers, fast-track rights issues and subordinate units. It also proposed establishing an Investor Protection Fund to facilitate efficient capital raising. Other recommendations include exempting investments by IFSC REITs and InvITs from certain foreign investment restrictions, enabling SEBI-registered REITs and InvITs to access GIFT IFSC exchanges through depositary receipts and dual or secondary listings, and creating tax parity between IFSCA-registered and SEBI-regulated investment trusts. IFSCA said it would examine the committee's recommendations in consultation with stakeholders before considering appropriate policy, regulatory and legislative measures for implementation.
Source: IFSCA
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