Press Release on Report of the Expert Committee on Development of REITs and InvITs in IFSC submitted to IFSCA

PRESS RELEASE Report of the Expert Committee on Development of REITs and InvITs in IFSC submitted to IFSCA The International Financial Services Centres Authority (IFSCA) has released the Report of the Expert Committee on the Development of REITs and InvITs in IFSC. The report sets out a comprehensive roadmap for positioning GIFT IFSC as a global hub for real estate and infrastructure financing.

Real Estate Investment Trusts (REITs), and an Indian innovation of the same specifically targeted towards the infrastructure sector - Infrastructure Investment Trusts (InvITs), have emerged as efficient investment vehicles for channelising capital into income-generating real estate and infrastructure assets. REITs and InvITs facilitate the monetization of income-generating assets of developers and asset owners, and unleashes a virtuous cycle by facilitating the utilisation of the unlocked capital into newer projects. Further, the units representing ownership in REITs and InvITs may be traded on stock exchanges, allowing for wider participation by investors in these asset classes and enabling them to obtain exposure without directly purchasing the assets themselves.

In India, REITs and InvITs, under the regulatory regime of Securities and Exchange Board of India (SEBI), have already played a significant role in asset monetisation and capital formation, mobilising approximately ₹2 lakh crore since FY 2019-20.

India’s trajectory towards becoming a developed nation (Viksit Bharat) by 2047 relies heavily on the accelerated development of its infrastructure and real estate sectors. It is estimated that India needs to invest approximately USD 4.5 trillion in infrastructure till 20401 to sustain its economic growth, while the Indian real estate market is expected to reach USD 5.8 trillion by 20472 which will, likewise, require significant investments.

Meeting these ambitious developmental goals requires the mobilization of significant amount of patient capital from domestic and foreign investors.

1 Source: Economic Survey 2017-18 2 India Brand Equity Foundation 1The Hon’ble Prime Minister of India in his vision for GIFT City has said that: “GIFT City is an important gateway to connect India with global opportunities. When you integrate with GIFT City, you will integrate with the whole world.” Hon’ble Prime Minister of India on July 29, 2022 Recognising the potential of GIFT IFSC to emerge as an additional gateway for global capital into India’s infrastructure and real estate sectors, IFSCA constituted an Expert Committee under the Chairmanship of Shri Ananta Barua, Former Whole Time Member, SEBI, in January 2024. The Committee comprised experts and industry leaders from the fields of real estate, infrastructure, investment banking, financial services, legal, consultancy, stock exchanges and regulatory policy.

The Committee was, inter alia, entrusted with the responsibility to recommend policy measures for development of REITs and InvITs in GIFT IFSC, identify necessary legal, taxation and regulatory reforms, suggest frameworks for innovative products and recommend a roadmap for positioning GIFT IFSC as a preferred destination for real estate and infrastructure financing.

The Expert Committee has submitted its report and the same has been placed on the IFSCA website today. This report is the culmination of the Committee’s extensive deliberations, global benchmarking studies, and consultations with industry experts and stakeholders. By identifying Mixed REITs & InvITs and Global REITs & InvITs as additional opportunities available to REITs & InvITs in IFSC, apart from the India focused REITs & InvITs as were originally envisaged, the Committee provides strategic recommendations aimed at building a global investment platform for real- world assets in IFSC to attract greater participation from global investors, sovereign wealth funds, pension funds and other long-term capital providers.

Key recommendations of the Committee include:

Product Innovation • Introduction of Mortgage REITs (mREITs) in GIFT IFSC to provide an alternative channel for real estate financing and support the development of securitisation markets. • Extension of the existing anti-greenwashing principles applicable to ESG- labelled debt securities in IFSC to REITs and InvITs that position themselves as “green”.

2• Adoption of a calibrated approach towards Small and Medium REITs (SM REITs), while monitoring developments in the domestic market and progress on tokenisation of real-world assets.

Regulatory Measures • Amendments to the IFSCA (Fund Management) Regulations, 2025 to introduce market-oriented mechanisms such as Inducted Sponsors, Re-Designated Sponsors, Self-Sponsored Investment Managers, Fast Track Rights Issues, and Subordinate Units.

• Further strengthening of the regulatory framework to facilitate efficient capital raising by setting up an Investor Protection Fund.

Inter-Regulatory Measures • Exemption of investments made by IFSC REITs and InvITs into Indian entities from sectoral caps and the three-year lock-in requirement under the automatic route. • Exemption of Indian sponsors of IFSC REITs and InvITs from the Overseas Portfolio Investment (OPI) limit to facilitate participation in IFSC-based structures.

• Enabling established SEBI-registered REITs and InvITs to access GIFT IFSC exchanges through depositary receipts and dual/secondary listing.

Taxation Recommendations • Tax parity between IFSCA-registered and SEBI-registered REITs and InvITs through suitable amendments to the Income Tax Act, 2025. • Exemption of foreign-sourced income arising in the hands of non-resident unitholders from taxation, thereby enhancing the competitiveness of IFSC- based investment trusts.

• Creation of a commercially viable and internationally competitive tax framework aimed at attracting long-term global capital into India’s real estate and infrastructure sectors.

The Committee has observed that while the existing regulatory framework in GIFT IFSC provides a strong foundation for the growth of REITs and InvITs, achieving a globally competitive taxation regime and addressing certain inter-regulatory issues would be critical for unlocking the full potential of these investment vehicles.

3IFSCA believes that the recommendations made in the report have the potential to significantly strengthen GIFT IFSC’s position as an international gateway for real estate and infrastructure financing, facilitate greater participation by global investors and contribute towards India’s long-term infrastructure development and economic growth objectives.

IFSCA will examine the recommendations of the Expert Committee in consultation with relevant stakeholders and consider appropriate policy, regulatory and legislative measures for implementation, wherever required.

The Report of the Expert Committee can be accessed on the IFSCA website at this link.

Gandhinagar July 15, 2026 ***** 4