Context. Since 2019, GRAVITY has provided direct observations of giant planets and brown dwarfs at separations of down to 95 mas from the host star. Some of these observations have provided the first direct confirmation of companions previously detected by indirect techniques (astrometry and radial velocities). Aims. We want to improve the observing strategy and data reduction in order to lower the inner working angle of GRAVITY in dual-field on-Axis mode. We also want to determine the current limitations of the instrument when observing faint companions with separations in the 30-150 mas range. Methods. To improve the inner working angle, we propose a fiber off-pointing strategy during the observations to maximize the ratio of companion-light-To-star-light coupling in the science fiber. We also tested a lower-order model for speckles to decouple the companion light from the star light. We then evaluated the detection limits of GRAVITY using planet injection and retrieval in representative archival data. We compare our results to theoretical expectations. Results. We validate our observing and data-reduction strategy with on-sky observations; first in the context of brown dwarf follow-up on the auxiliary telescopes with HD 984 B, and second with the first confirmation of a substellar candidate around the star Gaia DR3 2728129004119806464. With synthetic companion injection, we demonstrate that the instrument can detect companions down to a contrast of 8 A-10-4 (δ = 7.7 mag) at a separation of 35 mas, and a contrast of 3 Ã-10-5 (Iδ= 11 mag) at 100 mas from a bright primary (K < 6.5), for 30 min exposure time. Conclusions. With its inner working angle and astrometric precision, GRAVITY has a unique reach in direct observation parameter space. This study demonstrates the promising synergies between GRAVITY and Gaia for the confirmation and characterization of substellar companions.