India: Fund Management/ REITs

India's Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) were conceived in the aftermath of the 2008 global financial crisis as vehicles to channel long-term institutional capital into India's chronic infrastructure and real estate funding gaps.

India’s Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) were designed as tax-efficient ways to invest in income-producing assets through a regulated, transparent structure. That promise remains, but three successive legislative reforms between 2023 and 2026 have changed the tax structure for these business trusts and their investors.

India's GIFT IFSC continues its evolution as a global financial hub through July 2026, with significant regulatory reforms spanning banking, capital markets, fund management, and cross-border services.

On 30 June 2026, the Securities and Exchange Board of India (SEBI) issued a consultation paper (Consultation Paper) proposing significant reforms to the existing framework that governs investor consent mechanisms and conflicts of interest under the SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations). The proposed reforms seek to enhance governance standards by introducing a more uniform framework for obtaining investor consent and broadening the scope of conflict-related safeguards applicable to alternative investment funds (AIFs).

The Maharashtra Industrial Development Corporation has issued new guidelines governing the transfer of share capital of plot-holding companies to Real Estate Investment Trust structures. These regulations impose strict family ownership requirements, mandate detailed documentation and periodic certifications, and establish comprehensive compliance obligations for plot holders seeking to participate in REIT arrangements.

In the July edition of our monthly newsletter "Legalaxy", our team analyses some of the key developments in securities market, banking and finance, corporate affairs, labour and consumer affairs.

Securities and Exchange Board of India (“SEBI”), vide its circular dated April 8, 2026, has operationalised the mechanism for lock-in of pledged shares under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”), as part of its ease of doing business initiatives.

Sophisticated investors investing in India are no longer required to settle for the fund. Increasingly, they want the deal, i.e., the specific, high-conviction opportunity sitting inside the fund’s portfolio.

SEBI, by notification dated 16.04.2026 , has notified the SEBI (Alternative Investment Fund) (Amendment) Regulations, 2026 (“AIF Amendment Regulations”) amending the SEBI (Alternate Investment Funds) Regulations, 2012 (“AIF Regulations”).