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NRI Investment Guide

GIFT City for NRIs.

Invest in India in Foreign Currency — With Real Tax Benefits

India’s first International Financial Services Centre lets you invest in USD, GBP, EUR, and AUD — without the usual NRE/NRO complexity. Here’s how it actually works, who it’s for, and what to watch out for.
  • 886 acres · India's only IFSC
  • 32 banks · 250+ AIFs · 150+ intermediaries
  • Foreign currency transactions · No RBI approval needed
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  • No obligation
  • No cost to you
  • 100% confidential
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  • Regulated by IFSCA
  • Foreign currency investment
  • No India visit required
  • Full repatriation — no USD 1M cap
The Story

How GIFT City Came About

GIFT City stands for Gujarat International Finance Tec-City — India’s first and only International Financial Services Centre. Here’s how it evolved from an idea to a functioning financial hub.

2007

Concept proposed by then CM of Gujarat, Narendra Modi. McKinsey & Co conducted the feasibility study. Vision: bring offshore financial services onshore — a Singapore or Dubai on Indian soil.

2011–2015

Construction accelerated after the 2008 recession delays. The IFSC became operational in 2015, with initial banking and capital market activities beginning.

2020

IFSCA (International Financial Services Centres Authority) established as the unified regulator — consolidating RBI, SEBI, IRDAI, and PFRDA into a single body for the IFSC zone.

2025

GIFT City now spans 886 acres between Ahmedabad and Gandhinagar. Home to 32 banks, 250+ AIFs, 150+ capital market intermediaries, and 47 insurance firms. Ranked 46th on the Global Financial Centres Index — and 1st globally for reputational advantage among emerging centres.

The key takeaway for NRIs: GIFT City is treated as a foreign jurisdiction under FEMA, even though it sits physically in India. Transactions happen in foreign currency (USD, GBP, EUR, AUD), and the regulatory and tax framework is designed specifically to attract international investors — including the Indian diaspora.

Investment Avenues

What Can NRIs Invest In Through GIFT City?

GIFT City offers several investment avenues, from high-ticket AIFs to retail-friendly mutual funds. Here’s what’s currently available.

Alternative Investment Funds (AIFs)

Pooled vehicles regulated by IFSCA — Category I (startups, infrastructure), Category II (private equity), Category III (hedge strategies). Invest in Indian or global markets in foreign currency. Lock-in typically 3 years.

Min: USD 150,000 (some USD 50K–75K for accredited investors)

Mutual Funds & Feeder Funds

Indian AMCs have launched schemes through the GIFT City IFSC — structured as feeder funds that pool NRI capital in USD and invest into domestic Indian schemes. In September 2025, the first retail inbound mutual fund was approved by IFSCA.

Min: From USD 500 (retail schemes emerging)

Portfolio Management Services (PMS)

Your own separate demat account managed by a professional portfolio manager — you own the underlying stocks directly. Particularly relevant for US NRIs, as PMS avoids PFIC classification that makes pooled funds tax-complicated.

Higher minimums apply

Foreign Currency Deposits

IFSC Banking Units (IBUs) by ICICI, HDFC, SBI, Axis, IDFC FIRST offer savings accounts and FDs in USD, GBP, EUR, AUD, CAD, AED, SGD, and HKD. Interest on IBU deposits is exempt from Indian tax.

Min: USD 150,000 (some USD 50K–75K for accredited investors)

Exchange-Traded Products

Through IFSC exchanges (India INX and NSE IX), NRIs can trade global equities, ETFs, bonds, and derivatives. These exchanges operate up to 22 hours a day across time zones.

Varies by product and exchange

Eligibility

Who Can Invest in GIFT City?

GIFT City is open to NRIs, OCIs, and foreign investors. The eligibility is relatively straightforward:
  • You need to be classified as an NRI or OCI under FEMA. Resident Indians can also invest, but only through the Liberalised Remittance Scheme (LRS), which caps outward remittance at USD 250,000 per year. NRIs face no such cap.
  • Since June 2024, SEBI has allowed NRIs and OCIs to contribute up to 100% of the corpus in funds seeking FPI registration in GIFT City — up from the previous 50% limit. This means NRI families can fully own and control global funds based in the GIFT City IFSC.
  • An important note: you cannot invest in GIFT City through your existing NRE or NRO account. You need a dedicated account with an IFSC Banking Unit (IBU). The account opening process is digital — IFSCA implemented video KYC for NRIs in 2025 — and can be completed remotely without visiting India.

Tax Framework

Tax Benefits — What's Real and What to Be Careful About

GIFT City’s tax framework is one of its biggest draws for NRIs. Here’s what the data shows.

No STT

Transactions on IFSC exchanges are exempt from Securities Transaction Tax and Commodity Transaction Tax.

No Stamp Duty

Transactions within the GIFT City IFSC are exempt from stamp duty — reducing cost of investing compared to standard Indian exchanges.

No GST on IFSC Transactions

Services provided within the IFSC or to offshore clients are GST-free.

Capital Gains Treatment

For NRIs investing through Category III AIFs in specified listed securities within the IFSC, capital gains are not taxed in India.

Concessional TDS on Dividends

TDS on dividend income from GIFT City investments is typically 10% — lower than the standard 20% TDS for NRIs on domestic MF dividends.

Tax-Free IBU Deposits

Interest income on deposits with IFSC Banking Units is exempt from Indian tax.

  • The Critical Caveat

India not taxing your GIFT City gains doesn’t mean you pay nothing. Your country of residence will likely tax these gains under its own rules. US NRIs need to be particularly careful — pooled fund structures (AIFs, mutual funds) may trigger PFIC classification, which has severe US tax consequences. PMS structures avoid this issue.

The bottom line: GIFT City’s Indian tax advantages are clear and well-documented. But the total tax picture depends entirely on your country of residence. Always work with a qualified tax professional in your jurisdiction before investing.

Getting Started

The Paperwork — What's Involved

Setting up to invest in GIFT City involves a few steps. Here’s the process at a glance.

01

Open an IBU Account

Choose an IFSC Banking Unit (ICICI, HDFC, SBI, Axis, IDFC FIRST, Kotak, and others). Account opening is digital and can be done remotely via video KYC.

02

KYC Documentation

You'll need your passport, PAN card (for certain transactions), overseas address proof, and visa/work permit. The process is streamlined compared to domestic KYC.

03

Fund Transfer

Transfer funds from your overseas account via SWIFT (2–3 business days) or from your NRE account with currency conversion.

04

Select Your Investment

Once your IBU account is funded, invest in AIFs, mutual funds, PMS, FDs, or exchange-traded products through IFSCA-registered entities.

05

Full Repatriation

GIFT City offers full repatriation of capital and income in foreign currency without RBI approval — a significant advantage over NRO-routed investments, which are capped at USD 1 million per year.

The Honest Picture

What to Keep in Mind

GIFT City is a compelling development, but it’s important to understand the current limitations alongside the advantages.

High AIF Minimums

Most AIFs still require USD 150,000 — though this is coming down. Retail mutual fund options starting at USD 500 are emerging but still limited in number.

Evolving Ecosystem

GIFT City became operational in 2015 and IFSCA was established in 2020. Regulations are still evolving, and the product range is narrower than Singapore or Dubai.

Liquidity Constraints

Some GIFT City fund structures have lower liquidity than standard domestic mutual funds. Lock-in periods of 3+ years are common for AIFs.

US/Canada NRI Complexity

While GIFT City solves some problems for US NRIs, it creates others — PFIC classification for pooled funds. PMS is the safer structure but requires higher minimums.

Policy Risk

Tax benefits are extended through March 2030 — but there's no guarantee they'll be maintained beyond that.

Despite these caveats, the trajectory is clear. GIFT City is growing rapidly, minimum investment thresholds are falling, more retail-friendly products are launching, and the regulatory framework is maturing. For NRIs with the right investment size, it’s already a viable and tax-efficient route to Indian market exposure.
Ready to Explore?

Want to Know How GIFT City Fits Your India Strategy?

GIFT City is still relatively new territory for most NRIs — and that’s exactly why understanding it early gives you an edge. We’ll walk you through everything and help you understand what’s available.

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Common Questions

Frequently Asked Questions

Questions NRIs Ask About GIFT City Investments
GIFT City (Gujarat International Finance Tec-City) is India’s first International Financial Services Centre, located in Gandhinagar, Gujarat. It operates as a foreign jurisdiction under FEMA, regulated by the IFSCA. NRIs can invest in foreign currency through banking, mutual funds, AIFs, PMS, and exchange-traded products — with significant tax benefits compared to standard Indian investment routes.
It depends on the product. AIFs typically require a minimum of USD 150,000 (some allow USD 50,000–75,000 for accredited investors). Retail mutual fund schemes are emerging with minimums as low as USD 500. Foreign currency fixed deposits start from USD 1,000–10,000 depending on the bank and tenure.
GIFT City offers significant Indian tax advantages — including no STT, no stamp duty, no GST, and zero capital gains tax on specified securities transferred through Category III AIFs. However, NRIs are still liable to pay tax in their country of residence on these gains. The total tax outcome depends on your home country’s rules and any applicable DTAA provisions.
Yes, but with important nuances. Pooled fund structures like AIFs and mutual funds may trigger PFIC (Passive Foreign Investment Company) classification under US tax law, which has severe consequences. Portfolio Management Services (PMS) avoids PFIC because the NRI owns underlying securities directly. US NRIs are strongly advised to consult a US CPA before investing in any GIFT City product.
No. IFSCA implemented video KYC for NRIs in 2025, allowing the entire account opening and investment process to be completed remotely. You’ll need your passport, PAN card, overseas address proof, and visa documentation.

Get Started

Ready to Explore GIFT City Investment Options?

The infrastructure is in place, the regulatory framework is maturing, and the tax benefits are real. If you’d like to understand how GIFT City fits alongside mutual funds, NRE FDs, and other options — we’re here to walk you through everything.

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We handle the setup, educate you on every option, and you make the choices.

  • This blog is for educational and informational purposes only and should not be construed as financial, tax, or legal advice. GIFT City regulations, tax benefits, and product offerings are subject to change. Mutual fund investments are subject to market risks — please read all scheme-related documents carefully before investing. AIF investments carry additional risks including illiquidity and high minimum thresholds. Tax implications vary by country of residence — consult a qualified tax professional in your jurisdiction before making investment decisions.