GIFT City could develop into a global hub for institutional gold funds if digital investment access is supported by strong legal enforceability and regulatory oversight, according to Artha Bharat Investment Managers.

Speaking at the Global Securities Markets Conclave organised by the International Financial Services Centres Authority (IFSCA) in Mumbai, Sachin Sawrikar, Managing Partner at Artha Bharat Investment Managers IFSC LLP, said legal clarity remains the primary concern for global investors evaluating gold fund structures.

Artha Bharat Investment Managers is the first fund house authorised by IFSCA to launch a gold fund from GIFT City and is among the larger fund management entities operating from India’s international financial services centre.

Sawrikar noted that investors exploring offshore gold investment structures focus heavily on dispute resolution mechanisms, ownership rights and enforceability of contracts before committing capital.

“From the investor’s perspective, gold is portfolio insurance, a macro hedge, and a stabilizer during geopolitical stress. Gold is supposed to reduce portfolio risk, so the investment structure itself cannot become a source of new risk,” said Sawrikar.

He explained that investors assessing gold funds from GIFT City typically raise three key legal questions: the jurisdiction where disputes will be adjudicated, the speed of enforcement, and whether ownership of the gold backing the fund is clearly ring-fenced.

Sawrikar added that these concerns become more significant when leverage is involved in gold investment structures.

“This becomes even more important because a significant portion of offshore gold exposure, especially through private banks, is often leveraged. When leverage comes into play, any ambiguity around legal process, platform stability, or ownership clarity gets amplified,” he said.

According to Sawrikar, investors ultimately want assurance that their ownership remains protected even in extreme scenarios.

“The key question that investors are looking to have answered is, if the platform (fund house) fails tomorrow, does the investor still clearly own the gold?” he said.

He acknowledged that technology has expanded access to gold through fractionalisation, tokenisation and integration with wealth platforms, but emphasised that technology cannot replace legal enforceability.

“Institutional capital scales when there is predictability, structural clarity, and confidence that rights can be enforced. Digitally delivered, physically backed, regulator-supervised gold with clear legal enforceability can help GIFT City establish itself as a global hub for gold funds,” Sawrikar said.

To compete globally, he said GIFT IFSC would need to ensure separation of roles, fully allocated physical backing, bankruptcy-remote fund structures, independent custody and strong capital adequacy norms.

Artha Bharat also highlighted the need for stronger safeguards in digital gold platforms, stating that institutional adoption requires fully allocated metal holdings, independent custody and regulatory supervision.

Sawrikar said combining innovation with legal certainty could position GIFT City as a benchmark for global gold investment platforms.

“Innovation attracts attention, but legal certainty and structural clarity attract leveraged institutional capital. If GIFT combines digital efficiency with that level of legal enforceability, it can set a global benchmark in gold investment,” he said.