Abu Dhabi Investment Authority (ADIA), the UAE’s largest sovereign wealth fund, will set up an office in Gujarat International Finance Tec-City (GIFT City), a special economic zone located in Gandhinagar in the Indian state of Gujarat.

The move aims to reinforce the investment ties between the two countries, Mint, an Indian financial daily reported, citing a joint statement.

ADIA’s presence will attract other sovereign funds to establish their fund management businesses around Gandhinagar, informed sources said.

However, ADIA will not get additional tax benefits by setting up an office since it already enjoys a favourable tax regime for being a sovereign wealth fund.

The newspaper said that the sovereign wealth fund is expected to transfer some of its investments to the entity setting up shop in SEZ.

“With ADIA’s presence, GIFT City will experience a significant boost in appeal to foreign investors,” said Suresh Swamy, partner, Price Waterhouse & Co.

The UAE emerged as India’s fourth-largest investor in the financial year 2023.

ADIA is one of the investors in the Indian government-backed National Investment and Infrastructure Fund. In March, the fund purchased a stake worth $500 million in eyewear retailer Lenskart.

(Editing by Seban Scaria seban.scaria@lseg.com)