A lot of funds have been wanting to explore shifting out of Singapore, Mauritius and other jurisdictions into GIFT City, said Rajeev Saptarshi, Chief Operating Officer at Kotak Investment Advisors.

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"Obviously, it's not an easy task. It's effectively unsettling. It's obviously not an easy decision, investors have been asking what is in it for them. So what I am aware of is there are quite a few numbers of funds, whose re-domiciliation is in pipeline, but not yet completely through, and hence, this extension of deadline obviously, is going to help a lot,” he said.

Since its inception, the government has taken many steps to make IFSC an attractive proposition for the funds to set up shop at GIFT City. The recent Budget announcements gave a further lift to this space. Ease of doing business through single window approvals and tax parity with other competing jurisdictions such as Singapore and Mauritius are some of the important measures taken recently.

So far, GIFT City has given licence to over 50 fund management entities with about $11 billion committed. CNBC-TV18’s Nisha Poddar spoke to investors who have set up shop at GIFT City, to discuss how the growth can make the concept of IFSC more robust.

The past few Union Budgets have given a good space to the International Financial Services Centre (IFSC) and tax exemptions, now the theme has been ease of doing business in the GIFT City in the last few years, said Kalpesh Jain, MD & CFO at Multiples.

“There has been a single window clearance for getting approvals from all the regulators — SEBI, IRDAI, IFSC, GSTN, and others so it is a quick process to get an approval. In the bBudget now they have combined the SEZz approvals as part of the IFSC process. That makes it much easier as against dealing with one more regulator there," he said.

The sunset clause of 2023, which was to get the offshore funds to move to IFSC has been extended to 2025.

Meanwhile, Alok Mehta, Vice-President of Blume Ventures who has set up shop at the GIFT city said that for him, the decision was largely driven by the fact that this is a jurisdiction which is near shore, it is off-shore on onshore so that was a big motivator. "The government has also created a very enabling infrastructure and regulatory framework, and there are tax exemptions available,” he said.

For the entire discussion, watch the accompanying video