Onshore Trading Cools in 2025 Even as Offshore Volumes at GIFT IFSC Scale Record Highs
Trading activity linked to Indian markets took a geographically divergent path in calendar year 2025. While domestic participation across cash and derivatives segments moderated despite positive index returns, offshore trading in Indian market products surged to record levels at GIFT International Financial Services Centre (IFSC), according to the National Stock Exchange’s annual highlights.
The data points to a clear shift in where and how market participants chose to access Indian equity exposures during the year. Onshore markets saw reduced intensity and participation, particularly from retail investors, even as global investors increasingly turned to offshore platforms for trading Indian indices.
Offshore Trading at GIFT IFSC Emerges as a Key Growth Engine
The most striking development in 2025 was the sharp rise in offshore trading volumes on the NSE International Exchange (NSE IX) at GIFT IFSC. Total notional turnover on the exchange crossed $1.16 trillion during the year, making it one of the strongest years since operations began.
A significant portion of this activity was driven by GIFT Nifty derivatives, which alone accounted for approximately $1.13 trillion in turnover. The growing dominance of these contracts highlights their increasing acceptance as a preferred instrument for offshore investors seeking exposure to Indian equities.
NSE IX also recorded its highest-ever monthly turnover in October 2025, underscoring sustained momentum rather than sporadic bursts of trading activity.
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Rising Open Interest Signals Deeper Market Engagement
Beyond headline turnover figures, other indicators point to a deepening of offshore market participation. Open interest on NSE IX climbed to an all-time high during the year, suggesting that traders were building and maintaining positions rather than merely engaging in short-term speculation.
The number of unique client codes active on the exchange rose sharply on a year-on-year basis, reflecting a broadening investor base. This expansion indicates that offshore platforms are attracting not just higher volumes, but also a wider set of participants, including proprietary trading firms, global funds and institutional investors.
Together, these metrics suggest that offshore trading in Indian market products has moved into a more mature phase of growth.
Domestic Markets See Cooling Activity Despite Positive Returns
In contrast, trading activity in domestic markets weakened during 2025. On the NSE, cash market turnover declined, while equity derivatives turnover also saw a notable fall over the year.
This moderation came despite benchmark indices delivering positive returns, highlighting that price performance alone did not translate into higher trading intensity. Retail participation softened across both segments, with the decline more pronounced in derivatives trading.
Market observers note that higher volatility in previous years, tighter risk management norms, and selective participation may have contributed to this cooling trend.
Retail Participation Shows Signs of Fatigue Onshore
Retail investors, who had played a significant role in driving volumes in recent years, appeared more cautious in 2025. Participation weakened across cash and derivatives segments, reflecting a combination of factors:
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Reduced speculative activity in derivatives
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Greater focus on long-term investing rather than frequent trading
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Tighter margin requirements and risk controls
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Selective engagement amid valuation concerns
This shift contributed to lower overall turnover, even as headline indices ended the year in positive territory.
A Geographic Redistribution of Trading Activity
Taken together, the NSE’s annual data suggests that 2025 was not a year of diminished interest in Indian markets, but rather one of redistribution of trading activity across geographies.
While onshore markets experienced a moderation in participation and turnover, offshore platforms linked to Indian indices witnessed strong growth in volumes, open interest and client activity. This divergence highlights how global investors increasingly prefer offshore venues that offer extended trading hours, regulatory clarity, and seamless access to Indian market exposures.
As the NSE noted in its annual highlights, the data captures this evolution without attributing specific causes, but the trend itself is clear.
What the Divergence Means for Market Structure
The growing prominence of offshore trading raises important questions about the future structure of Indian market participation. GIFT IFSC’s rise as a global trading hub suggests that India’s capital markets are becoming more integrated with international financial flows.
Key implications include:
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Greater global price discovery for Indian indices
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Increased competition between onshore and offshore venues
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Potential shifts in liquidity concentration
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Evolving regulatory and market infrastructure priorities
For policymakers and exchanges, balancing domestic market vibrancy with offshore growth will be a key theme in the years ahead.
Outlook: Indian Markets Remain in Global Focus
Despite the cooling of onshore trading activity, the surge in offshore volumes underscores sustained global interest in Indian equities. Indian market-linked products continue to attract capital and attention, even if participation patterns are changing.
As trading ecosystems evolve and investor preferences shift, 2025 may be remembered as a year when Indian market exposure went global in a more pronounced way, with GIFT IFSC emerging as a central node in that transformation.
For investors, the message is clear: interest in India’s growth story remains intact, but the pathways to access it are becoming increasingly diverse.
