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Brian O’Nolan
| Foundation | 25 September 2000 (as SGX Nifty)
3 July 2023 (as GIFT Nifty) |
|---|---|
| Operator | NSE |
| Exchanges | NSE IX |
| Related indices | NIFTY 50 |
| Website | www |
GIFT Nifty (Gujarat International Finance Tec-City Nifty) is a USD-denominated index futures contract based on the Nifty 50 index. It trades on the NSE International Exchange (NSE IX), located within the International Financial Services Centre (IFSC) in GIFT City, Gandhinagar, Gujarat, India.[1] This product launched on 3 July 2023, following the migration of the SGX Nifty contract from the Singapore Exchange to India under the NSE–SGX Connect initiative.[2]
Historical background
The original SGX Nifty, launched in September 2000, was a popular derivative traded on the Singapore Exchange. It offered international investors a way to hedge exposure to Indian equities outside of domestic trading hours.[3] Over time, its liquidity grew substantially, and by the late 2010s, the notional open interest crossed billions of US dollars.[4] Concerned about large offshore volumes, Indian regulators and the NSE moved to bring trading onshore to boost India's financial ecosystem and reduce dependency on offshore hubs.[4]
Following years of planning, the "NSE IFSC–SGX Connect" was developed. On 3 July 2023, roughly USD 7.5 billion of open interest was migrated from SGX to NSE IX in GIFT City.[1][5] This migration was hailed by officials as a significant step toward building GIFT City into a globally competitive financial centre.[6]
Trading hours and structure
GIFT Nifty offers extended trading nearly 21 hours daily:
- Session 1: 06:30 IST – 15:40 IST
- Session 2: 16:35 IST – 02:45 IST (next day)[7]
The brief pause allows for operational resets. This long window allows investors in Asia, Europe, and the Americas to trade during their local hours, improving market depth and real-time price discovery.[8] It distinguishes GIFT Nifty from purely domestic contracts on NSE, which operate during standard Indian hours.[4]
Regulation and clearing
The GIFT Nifty contracts are regulated by the International Financial Services Centres Authority (IFSCA).[9] Clearing and settlement continue to involve SGX, which adds international credibility and aligns with global risk management standards.[5] The structure ensures GIFT Nifty benefits from dual oversight: Indian (IFSCA & SEBI) and Singaporean frameworks.[4]
NSE IX, where GIFT Nifty is listed, is a wholly-owned subsidiary of National Stock Exchange of India designed to serve global investors from its GIFT City base.[10]
Product suite
Currently, four contracts are offered under the GIFT Nifty brand:
- GIFT Nifty 50
- GIFT Nifty Bank
- GIFT Nifty Financial Services
- GIFT Nifty IT[3]
These closely mirror NSE’s onshore products but trade in USD, making them accessible to foreign portfolio investors (FPIs), hedge funds, and global institutions.[8] Plans are under discussion to add mid-cap and thematic indices.[10]
Key advantages
By relocating to India, GIFT Nifty consolidates offshore and onshore Nifty futures liquidity, improving efficiency and price discovery.[4] Extended trading hours ensure hedging around the clock, especially during geopolitical events or major US market moves.[1]
In addition, trades in GIFT City enjoy tax incentives including exemptions from Securities Transaction Tax (STT), dividend distribution tax, and select capital gains.[10] This has attracted institutional volumes that were previously transacted entirely offshore.[6]
Market response
On its debut, GIFT Nifty traded over USD 1.2 billion in volume, showing strong demand from global investors.[1] By mid-2024, daily average volumes and open interest have grown steadily, supported by over 60 NSE IX registered brokers.[11]
The participation includes proprietary desks, FPIs, and asset managers, highlighting the contract’s acceptance.[6]
Future and impact
Regulators and market experts see GIFT Nifty as a milestone for India's aspiration to become a global trading hub.[10] Further product expansion, including currency and commodity derivatives, is being explored.[9]
Policymakers hope this will channel foreign capital through Indian soil, strengthening GIFT City's position alongside cities like Singapore, Dubai, and Hong Kong.[9]
See also
- Nifty 50
- National Stock Exchange of India
- GIFT City
- International Financial Services Centre
- Singapore Exchange
- Foreign portfolio investment
- Derivatives market
- Securities and Exchange Board of India
References
- ^ a b c d Sethuraman N R, Jayshree P Upadhyay (3 July 2023). "GIFT Nifty begins India journey as new hedging option for investors". Reuters. Retrieved 22 June 2025.
- ^ Divya Nagasundaram (16 May 2023). "SGX Nifty to be known as GIFT Nifty from July 3". Mint. Retrieved 22 June 2025.
- ^ a b "SGX Nifty to be renamed as Gift Nifty from July 3". The Economic Times. 17 May 2023. Retrieved 22 June 2025.
- ^ a b c d e "Indias gateway to global investments". Fisdom. Retrieved 22 June 2025.
- ^ a b "Investors to continue trading via SGX in GIFT City from July 3". Business Standard. Press Trust of India. 30 June 2023. Retrieved 22 June 2025.
- ^ a b c Devansh Singla (3 July 2023). "SGX Nifty Becomes GIFT Nifty: Here's All You Need To Know". Outlook Business. Retrieved 22 June 2025.
- ^ "SGX Nifty is now Gift Nifty: Timings, how to check data & key changes explained". The Economic Times. 3 July 2023. Retrieved 22 June 2025.
- ^ a b "What is Gift Nifty? Meaning, Benefits & Its Timing". Angel One. Retrieved 22 June 2025.
- ^ a b c "Onshore the Indian Innovation to GIFT IFSC" (PDF). International Financial Services Centres Authority. Retrieved 22 June 2025.
- ^ a b c d Capital Markets in GIFT IFSC (PDF) (Report). PwC India. Retrieved 22 June 2025.
- ^ "SGX Nifty starts trading as GIFT Nifty from July 3". The New Indian Express. 3 July 2023. Retrieved 22 June 2025.