What Is GIFT Nifty? Complete Guide to India's Offshore Index Futures

## Introduction to GIFT Nifty GIFT Nifty is a futures contract based on the benchmark **NIFTY 50 index**, traded on the **NSE International Exchange (NSE IX)** located within Gujarat International Finance Tec-City (GIFT City), an International Financial Services Centre (IFSC) in Gandhinagar, India. Formerly known as **SGX Nifty** and traded on the Singapore Exchange for over two decades, the entire trading infrastructure, liquidity pool, and settlement mechanism transitioned to GIFT City in July 2023 under the **NSE IFSC-SGX Connect** partnership. --- ## Why Was GIFT Nifty Created? The primary objective behind transitioning SGX Nifty to GIFT City was to bring offshore dollar-denominated trading of Indian equities back onto Indian soil while retaining global institutional participation. ### Key Objectives: 1. **Onshoring Global Liquidity:** Allowing foreign institutional investors (FIIs) to trade Indian benchmark derivatives under a globally competitive, zero-tax IFSC regulatory framework. 2. **Extended Trading Window:** Providing international hedge funds, family offices, and foreign investors with almost 21 hours of continuous trading access to hedge Indian market exposure across US, European, and Asian trading time zones. 3. **Pre-Market Sentiment Benchmark:** Serving as an early-morning compass for domestic Indian market participants before the 09:15 AM IST opening bell on the National Stock Exchange (NSE). --- ## Contract Specifications | Parameter | Specification | | :--- | :--- | | **Underlying Index** | NIFTY 50 Index | | **Exchange** | NSE IX (GIFT City, Gandhinagar) | | **Denomination** | US Dollars (USD) | | **Tick Size** | 0.50 index points ($1 per tick) | | **Trading Sessions** | Session 1: 06:30 AM to 03:40 PM IST<br>Session 2: 04:35 PM to 02:45 AM IST | | **Settlement Basis** | Cash-settled based on official closing price of NIFTY 50 on the final expiry day | --- ## How Domestic Traders Use GIFT Nifty While retail traders in India generally trade rupee-denominated NIFTY 50 contracts on the NSE, GIFT Nifty serves as the definitive pre-market indicator between **06:30 AM and 09:00 AM IST**. By comparing the current price of GIFT Nifty futures with the previous day's closing price of the NIFTY 50 cash index, market analysts derive an **indicative gap opening**: $$\text{Indicative Gap} = \text{GIFT Nifty Price} - \text{Previous NIFTY 50 Close}$$ > **Important Note:** GIFT Nifty indication reflects international sentiment and overnight global news, but the actual domestic opening at 09:15 AM is determined by the official NSE Pre-Open Auction (09:00 AM to 09:08 AM IST) where domestic orders interact with institutional orders.