GIFT City is on the verge of becoming the site for India's inaugural regulated global real estate and infrastructure asset tokenization platform. This initiative is still in its infancy, with IFSCA having granted provisional approval to select entities, including Realdom India Pvt Ltd, which is spearheading the establishment of the Pinvest Exchange platform.

GIFT City, short for Gujarat International Finance Tec-City, is renowned for hosting over 500 entities spanning banking, stock exchanges, aircraft and ship leasing, and fintech companies, among others. Notable entities in GIFT City include IBM, Google, and Oracle. The launch of India's first regulated global real estate and infrastructure asset tokenization platform is poised to open up investment avenues for small-scale traders.

In the early stages, real estate and infrastructure projects often require substantial investments, hindering the participation of small investors in these growth opportunities. However, this nascent initiative aims to overcome this barrier by introducing asset tokens backed by blockchain technology, thereby providing liquidity to global asset owners.

The process will commence with asset onboarding onto the tokenization platform for trading and investment, pending due diligence, independent valuation, and project credit rating by relevant authorities. Subsequently, assets will be tokenized and issued to investors, with custodians overseeing token management.

Blockchain technology was selected for its security and asset ownership features, promising benefits for stakeholders, including developers and investors. The objective is to establish an independent marketplace for real estate and infrastructure akin to existing markets for commodities and equities.

To facilitate this endeavor, an asset tokenization committee has been formed to provide recommendations to regulators, aiding in the creation of a new financial instrument.

These developments follow the expressed interest of several Indian asset managers in relocating their offshore fund businesses to GIFT City from Singapore and Dubai. The move aligns with the Indian government's promotion of GIFT City as a gateway for global capital and financial services, supported by incentives such as tax breaks.

In the past six months, eight to ten Indian asset managers have either relocated their businesses to GIFT City or applied for permits. Swarup Mohanty, CEO of Mirae Asset Investment Managers, highlighted GIFT City's appeal due to its proximity to the Indian market. Overall, the establishment of India's first global real estate and infrastructure asset tokenization platform in GIFT City is poised to benefit both small investors and the industry at large.