INDIA’S new financial hub granted its first approval to billionaire Azim Premji’s family office to invest its capital overseas, raising hope for the nation’s wealthy as they wait for clarifications from regulators to make similar moves.

Premji Invest has received an in-principle approval to set up a so-called family investment fund at Gujarat International Finance ­Tec-­City, also known as Gift City based in Prime Minister Narendra Modi’s home state, according to people familiar with the matter. Dozens of applications for FIFs that allow families to make investments across various asset classes and instruments offshore, are still pending, said the people, asking not to be identified discussing a private matter.

Premji Invest and billionaire Narayana Murthy-backed Catamaran Ventures were among the first to seek approvals, according to the people.

Representatives for International Financial Services Centres Authority (IFSCA), which governs Gift City, didn’t respond to requests for comment while a spokesman for Premji Invest declined to comment.

Like its neighbour China, India has placed strict controls on moving capital overseas. Resident Indians are allowed to remit US$250,000 each year, including purchase of property, investment in shares and securities as well as setting up joint ventures or subsidiaries abroad. Touted by Modi’s government as a free market pilot, Gift city aims to become a financial hub unhampered by rules and taxes.

India’s rising wealth has spurred the growth of family offices and the demand for portfolio diversification. Many rich Indians began exploring setting up investment offices abroad after the Reserve Bank of India eased some rules in August 2022. These regulations would allow non-financial entities invest up to 400 per cent of their net worth through the newly established overseas offices.

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However, a few months later, the regulator told bankers in a call that these relaxed rules were not intended to allow wealthy individuals to set up family offices abroad and asked banks to stop facilitating these structures, according to some participants on the call. The Reserve Bank of India also told the bankers it would soon release a document to provide clarifications on frequently asked questions on the matter, the people said.

RBI is yet to release the document, according to the people. The central bank didn’t respond to a request for comment.

Gift City, which aims to be the “first port-of-call” for resident Indians who would have otherwise set up offices in Singapore and London, has a broad framework for launching these funds, IFSCA said on its website. IFSCA also wants to be a preferred destination for the Indian diaspora seeking to invest its wealth in the country and for foreigners looking for opportunities in emerging markets. BLOOMBERG