What GIFT City is, who regulates it, how Indians invest globally and how NRIs invest into India through it, the fund types and ticket sizes, the tax picture and what to keep in mind — a primer for partner conversations.
01What is GIFT City?
GIFT City — Gujarat International Finance Tec-City — is a planned financial district in Gandhinagar, Gujarat that houses India's first International Financial Services Centre (IFSC). In plain terms, it is a financial zone on Indian soil that is treated as offshore: business is transacted in foreign currency (mainly US dollars) and runs under its own dedicated regulator. It opens two doors with one well-regulated gateway — letting resident Indians invest out into global markets, and letting NRIs and foreign investors invest in to India.
Location
Gandhinagar, Gujarat — a purpose-built financial district.
Status
India's first IFSC — a deemed foreign jurisdiction within India.
Regulator
IFSCA — a single unified regulator, set up in 2020.
The International Financial Services Centres Authority (IFSCA), established in 2020, is the single, unified regulator for the IFSC — combining the roles that RBI, SEBI, IRDAI and PFRDA play in the rest of India. Funds are launched and run under the IFSCA (Fund Management) Regulations, 2025, which replaced the earlier 2020 framework and modernised how schemes are set up, governed and distributed.
FME
The Fund Management Entity — the IFSCA-licensed manager that runs the schemes.
Scheme
The fund itself — retail, restricted (non-retail) or venture capital.
One window
Banking, insurance, capital markets and funds — all under IFSCA.
03Two Doors — Outbound & Inbound
Outbound — Resident Indians → the world
Invest in global markets — US large-cap (S&P 500), Nasdaq 100, diversified global equity and debt — in US dollars, without opening an overseas brokerage account. Money is remitted under the RBI's Liberalised Remittance Scheme (LRS), which allows up to USD 250,000 per person per financial year. You fund in rupees; the GIFT City feeder does the rest.
Inbound — NRIs & foreign investors → India
Access Indian equities and strategies through GIFT City in USD, with simpler onboarding, easy repatriation and a favourable tax regime — a clean alternative to the traditional FPI / NRI routes.
04Fund Types & Minimums
Vehicle
Who it's for
Typical minimum
Retail Scheme
Open to all investors
Low minimums — the outbound feeders on the dashboard start around USD 5,000
Restricted (Non-Retail) Scheme
Sophisticated / HNI investors
USD 150,000 per investor
Portfolio Management (PMS)
HNI investors
USD 75,000 (reduced under the 2025 regulations)
Venture Capital Scheme
Accredited / large investors
As specified by the FME
The minimum fund corpus for retail and restricted schemes was reduced from USD 5 million to USD 3 million under the IFSCA (Fund Management) Regulations, 2025 — making it easier to launch focused, specialised schemes.
05Why Partners & Clients Use It
Global diversification in hard currency — own the world's largest companies, priced and settled in US dollars.
Stays on Indian rails — IFSCA-regulated, Indian KYC, rupee funding under LRS; no foreign bank or brokerage account to maintain.
Institutional structure — feeder / fund-of-funds format, professional management and transparent daily NAV.
Tax-efficient platform — unit- and transaction-level reliefs keep the structure lean (see below).
For NRIs — a clean, USD-denominated way to invest into India with straightforward repatriation.
06Tax at a Glance
It helps to separate three levels — the fund, the transaction, and the investor:
Fund / unit level — IFSC units (including fund managers) get a tax holiday under Section 80LA: 100% of eligible income for any 10 consecutive years out of 15. The Union Budget 2026-27 extended this to 20 consecutive years out of 25, with post-holiday income taxed at a concessional 15%.
Transaction level — no STT, CTT or stamp duty on trades done on IFSC exchanges, and no GST on IFSC financial services.
Non-resident investors — many categories of IFSC income (e.g. certain interest and capital gains on IFSC-traded securities) are exempt or concessionally taxed.
Resident investors (outbound feeders) — the GIFT City wrapper gives efficient access, but your own gains remain taxable in India under the normal rules for the underlying assets. GIFT City is not a personal tax exemption for residents.
TCS flag: LRS remittances above ₹10 lakh in a financial year attract Tax Collected at Source (creditable against your final tax). This threshold was raised from ₹7 lakh with effect from 1 April 2025.
07Keep in Mind
Currency risk — returns are in USD; the rupee's movement affects your final INR outcome, both ways.
LRS cap & TCS — USD 250,000 per person per year; TCS applies on remittances beyond ₹10 lakh.
Suitability — global / feeder products fit a diversifying satellite allocation, not the core; size them accordingly.
Liquidity — feeder and fund-of-funds structures may settle a little slower than domestic mutual funds.
Documentation — KYC, the LRS declaration (Form A2) and source-of-funds requirements apply.
Sources: IFSCA (Fund Management) Regulations, 2025 (ifsca.gov.in) · RBI — Liberalised Remittance Scheme · Income-tax Act, Section 80LA · Union Budget 2026-27. Figures are indicative and subject to change; this material is for partner education and is not tax or investment advice.
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