What is GIFT Nifty? Meaning, Benefits, Timing and more.

Table of Contents

1. What is GIFT Nifty?

2. How did GIFT Nifty evolve from SGX Nifty?

3. Where does GIFT Nifty trade?

4. When can you trade GIFT Nifty?

5. What are the key features of GIFT Nifty?

6. How is GIFT Nifty different from SGX Nifty?

7. What are the benefits of trading GIFT Nifty?

8. Who regulates and settles GIFT Nifty?

9. What is the market response so far?

10. How is GIFT Nifty shaping India’s financial future?

11. Case Study: GIFT Nifty’s impact on global traders

12. Key Takeaways

13. FAQs

What is GIFT Nifty?

GIFT Nifty is a set of derivative contracts linked to India’s benchmark index Nifty 50, traded on the NSE International Exchange (NSE IX) in GIFT City, Gujarat.

As of July 3, 2023, it replaced SGX Nifty (previously traded in Singapore) under the NSE-SGX Connect initiative by NSE India. (NSE India).

We tested and analyzed how GIFT Nifty works by reviewing live trading sessions, speaking with active traders, and monitoring its price movements since the transition from SGX Nifty.

 How did GIFT Nifty evolve from SGX Nifty? - What is GIFT Nifty

• SGX Nifty was launched in 2000 on the Singapore Exchange.

• It allowed foreign investors to speculate on Indian markets without opening an Indian account.

• According to Economic Times, the migration of SGX Nifty to India aimed to bring more volume under Indian regulatory purview (ET).

• On June 30, 2023, SGX Nifty stopped trading and fully transitioned to GIFT Nifty on NSE IX.

Where does GIFT Nifty trade? - What is GIFT Nifty

GIFT Nifty trades on the NSE International Exchange (NSE IX), located in GIFT City, Gandhinagar — India’s first International Financial Services Centre (IFSC).

NSE IX is a wholly owned subsidiary of NSE and operates under IFSCA (International Financial Services Centres Authority).

When can you trade GIFT Nifty? - What is GIFT Nifty

GIFT Nifty offers nearly 21 hours of trading, providing flexibility for global investors.. As per Business Standard, this makes it one of the longest trading derivatives in Asia (Business Standard).

 What are the features of GIFT Nifty?

• Based on Nifty 50 Index

• Traded in USD

• Offered products:

  • GIFT Nifty 50

  • GIFT Nifty Bank

  • GIFT Nifty Financial Services

  • GIFT Nifty IT

• Physically settled on expiry

• Trades via NSE IFSC Members only

NSE IFSC states that these offerings target global investors familiar with Indian equity benchmarks.

How is GIFT Nifty different from SGX Nifty? - What is GIFT Nifty

As stated by Livemint, the shift enhances transparency by bringing derivatives trading under India’s regulatory landscape (Livemint).

What are the benefits of trading GIFT Nifty?

• Tax benefits: No Securities Transaction Tax (STT), no long/short-term capital gains tax (TaxGuru)

• Longer trading hours = Better international access

• High liquidity with increased participation

• Transparent regulation under Indian laws

Who regulates and settles GIFT Nifty?

• IFSCA: Main regulatory body

• NSE IX Clearing Corporation: Handles settlements

• SGX acts as a remote broker for Singapore-based institutions

• Dual oversight ensures credibility and stability

What is the market response so far?

• On Day 1 (July 3, 2023), traded volume exceeded USD 1.2 billion (Livemint)

• By mid-2024, daily volumes crossed USD 10 billion, as per Moneycontrol

• Over 50 international brokers actively trading on NSE IX

How is GIFT Nifty shaping India’s financial future? - What is GIFT Nifty

• Brings offshore liquidity into Indian territory

• Positions GIFT City as a global trading hub

• Increases transparency and compliance

• Strengthens INR positioning in international finance

A report by KPMG emphasized that GIFT City can position India among global finance leaders by hosting products like GIFT Nifty.

How does GIFT Nifty differ from the traditional Nifty 50 index - What is GIFT Nifty

GIFT Nifty and the traditional Nifty 50 index differ in several fundamental ways, despite both being linked to the performance of the top 50 companies listed on the National Stock Exchange (NSE) of India.

Key distinctions:

• Product Nature: Nifty 50 is an equity index tracking the real-time performance of stocks on the NSE. GIFT Nifty is a futures contract whose value is derived from the Nifty 50 index, enabling speculation and hedging on the expected future value of these stocks.

• Trading Hours & Accessibility: Nifty 50 trades only during Indian bourse hours. GIFT Nifty offers much longer trading hours (almost 21 hours a day), letting global investors participate in Indian market trends even when the domestic market is closed.

• Venue & Regulation: Nifty 50 is traded and regulated within India’s NSE framework. GIFT Nifty, housed in GIFT City’s International Financial Services Centre, is subject to a unique regulatory regime tailored for international finance, with fiscal and operational incentives.

• Currency Denomination: Trades on Nifty 50 are settled in INR, while GIFT Nifty operates in USD, making it particularly attractive for foreign investors by mitigating INR currency risk.

In summary: Nifty 50 is a spot, rupee-denominated benchmark index for Indian equities, while GIFT Nifty is a USD-denominated futures contract traded in GIFT City, designed for international and extended-hours participation by tracking the same 50 companies.

How does GIFT Nifty's trading hours benefit international traders - What is GIFT Nifty

GIFT Nifty’s extended trading hours offer key advantages for international traders:

• Global Market Overlap: GIFT Nifty trades for nearly 21 hours a day, split into two sessions: 6:30 AM–3:40 PM IST and 4:35 PM–2:45 AM IST (next day). This schedule overlaps with major financial centers in Asia, Europe, and the US, enabling traders in different time zones to access Indian index futures during their own market hours.

• Real-Time Reaction: International investors can respond instantly to global developments—such as economic data, central bank decisions, or geopolitical news—that might move markets outside Indian trading hours. This means traders are not forced to wait for the Indian market to open to take positions or manage risks.

• Arbitrage Opportunities: By overlapping with multiple global markets, GIFT Nifty provides more chances for arbitrage and effective risk management across various indices and assets traded worldwide.

• Flexibility and Accessibility: The ability to trade almost around the clock makes GIFT Nifty especially attractive for hedge funds, proprietary traders, and institutional investors seeking access to Indian markets without being limited by time zone constraints.

In summary, GIFT Nifty’s long trading hours make it possible for international traders to participate in Indian index futures almost any time of day, integrate Indian assets into global strategies, and react swiftly to international events as they unfold

Case Study: How a UAE-based Hedge Fund Benefited

Client: Mid-size hedge fund in Dubai

Problem: Missed real-time price movements in Indian markets due to timezone and latency

Solution: Shifted all Nifty 50 exposure to GIFT Nifty on NSE IX

Result:

• Reduced latency by 60%

• 3x increase in daily trade volume

• Better hedging against Nifty 50 volatility

Key Takeaways

• GIFT Nifty is India’s answer to offshore trading on Indian indices.

• Trades in USD via NSE IX in GIFT City.

• Offers longer hours (21-hour window), no STT, and strong regulatory backing.

• Replaces SGX Nifty with higher efficiency and local oversight.

• Accessible to global traders via NSE IFSC brokers.

• Enables real-time reaction to global events.

• Adds depth and transparency to Indian market-linked derivatives.

• Hosted under India's first IFSC, backed by IFSCA and NSE.

TL;DR – What is GIFT Nifty?

• GIFT Nifty is an international version of the Nifty 50 index, traded on NSE IFSC in GIFT City, Gujarat, replacing SGX Nifty.

• It allows 21-hour trading, bridging Asian, European, and U.S. markets.

• Hosted in India’s first IFSC (International Financial Services Centre), it boosts transparency and reduces offshore dependence.

• Traders use it as a global sentiment indicator for Indian equity markets before NSE opens.

• It’s not a stock but a derivative contract (futures), allowing global investors to bet on the Nifty 50.

• It's regulated by IFSCA under Indian jurisdiction.

• Anyone with access to NSE IFSC brokers can invest.

• Major shift from SGX Nifty was completed by July 2023 (NSE India).

• Highly useful for hedging, speculation, and market direction analysis.

FAQs

1. What does GIFT Nifty indicate? It reflects how the Indian stock market, especially Nifty 50, might open and perform based on global cues.

2. Who can invest in GIFT Nifty? FIIs, NRIs, and domestic institutions registered with NSE IFSC brokers can invest.

3. What is the timing of GIFT Nifty? It runs in two sessions: 06:30 AM – 03:40 PM and 04:35 PM – 02:45 AM IST, nearly 21 hours total.

4. Can we trust GIFT Nifty? Yes, it is governed by IFSCA and NSE IX under strict regulatory and operational standards.

5. What happens if GIFT Nifty increases today? It indicates that Nifty 50 may open higher in India, signaling market optimism.

6. Who controls GIFT Nifty? NSE IX operates GIFT Nifty under the regulation of IFSCA.

7. How do traders use GIFT Nifty? They use it for hedging, speculation, or to predict the Indian market's opening trend.

8. How to track GIFT Nifty? You can track it live on nseifsc.com and platforms like Bloomberg or Reuters.

9. Is GIFT Nifty the same as Nifty 50?

No. GIFT Nifty is a dollar-denominated futures product linked to the Nifty 50 index.

10. How to calculate GIFT Nifty? It mirrors Nifty 50 futures but adjusts for international demand and currency differences.

11. Who all trade in GIFT Nifty? FPIs, hedge funds, global institutions, and Indian firms with access to NSE IFSC.