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India's Gujarat International Finance Tec-City, or GIFT City, has given approval to billionaire Azim Premji's wealth fund to set up a family investment fund in the financial hub, two sources with direct knowledge of the matter said.

Prime Minister Narendra Modi has been looking to revive this decade-old project in his home state, with new breaks aimed at drawing in foreign brokers and companies.

With the approval, the fund will be able to invest overseas, the sources said.

Family investment funds (FIFs) are a type of investment fund managed by a single family and are typically used to invest in diverse assets, including securities, shares, and bullion.

While such funds set up in India can also invest overseas, they require the central bank's approval, whereas funds established in GIFT City do not require regulatory approval to invest overseas.

Premji is the founder and former chairman of Indian IT major Wipro.

Both sources declined to be named as they are not authorised to speak to media.

The International Financial Services Regulatory Authority (IFSCA), which regulates financial services in GIFT City, did not respond to a Reuters request for comment. A spokesperson from Premji's family office declined to comment.

According to minutes of meetings uploaded on a government website, Premji's family fund had applied for approval last July.

The fund has $10 billion in assets and the proposed GIFT entity would initially invest $200 million, according to the minutes.

Apart from Premji, Infosys co-founder Narayan Murthy's family fund, called Catamaran Artha, had also applied to set up an investment fund worth 15 billion rupees ($180.49 million) in August.

"This will encourage more global family offices to set up their operations in GIFT city, leverage on progressive regulatory framework and make global investments," said Jaiman Patel, partner at EY India.

Several Indian-origin high net worth executives are visiting GIFT next week, including a steel baron, the second source said.

Close to 80 funds with commitments of $24 billion have set up in GIFT City, including Indian firms investing in overseas assets and offshore hedge funds making domestic investments.

($1 = 83.1090 Indian rupees)