GIFT City: The Indian Investor's Gateway to Global Markets
India built an offshore financial centre on its own soil. Here is what that means for your portfolio.
If you have tried investing in an international mutual fund recently, you have likely hit a wall. Dozens of India-domiciled schemes that invest overseas have stopped accepting fresh investments. The reason: SEBI and RBI cap the mutual fund industry's total overseas exposure at $7 billion, and that limit has been breached since January 2022.
The result is a frustrating paradox. Indian investors are more interested in global diversification than ever, but one of the most popular routes to achieve it is effectively shut.
GIFT City changes that equation entirely.
What Is GIFT City? And Why Should You Care?
Gujarat International Finance Tec-City (GIFT City) is India's first and only International Financial Services Centre (IFSC). Located in Gandhinagar, Gujarat, it operates as a Special Economic Zone with a dedicated financial regulator: the International Financial Services Centres Authority (IFSCA).
Here is the critical detail most explanations bury in legal jargon: under the Foreign Exchange Management Act (FEMA), GIFT City is treated as foreign territory for financial purposes. This means transactions within GIFT City can be conducted in foreign currencies (USD, EUR, GBP) without mandatory rupee conversion. And financial products based in GIFT City are regulated by IFSCA, not by SEBI or RBI.
Why does this distinction matter? Because the $7 billion industry cap on overseas investments applies to SEBI-regulated mutual funds. GIFT City funds, regulated by IFSCA, are not subject to that cap.
What's Available Through GIFT City Today
As of early 2026, GIFT City hosts over 300 registered fund management entities with combined committed capital exceeding $22 billion. Here is what Indian investors can access across five categories.
Global Mutual Funds
USD-DENOMINATEDDSP, Edelweiss, Mirae Asset, PPFAS, and Tata have all established GIFT City operations. PPFAS launched S&P 500 index fund-of-funds through GIFT City, something it could not do through its SEBI arm due to the cap.
IFSCA-Registered Broker-Dealers
DIRECT MARKET ACCESSPlatforms like Valura operate as IFSCA broker-dealers with direct access to US, European, UK, Asian, and other global markets through a single regulated account.
Portfolio Management Services
$75K MINIMUMMinimum threshold reduced from $150,000 to $75,000 under 2025 regulations. Professionally managed, customised global portfolios for serious investors.
Alternative Investment Funds
ACCREDITED ONLYCategory I, II, and III AIFs with global mandates. Corpus minimum reduced to $3M; individual investor minimum dropped to $75,000 for accredited investors.
NSE IFSC & BSE IFSC Exchanges
~50 STOCKSNSE IX lists receipts for ~50 US stocks (Apple, Tesla, Amazon, Nvidia) that trade in USD during extended hours. Limited universe, but exchange-traded.
The Relocation Game-Changer
Starting April 1, 2026, mutual funds and ETFs domiciled in offshore jurisdictions like Singapore, Mauritius, and Luxembourg can relocate to GIFT City without triggering capital gains tax. This tax-neutral relocation regime, announced in Union Budget 2025, is designed to bring offshore fund structures "onshore" to India's own IFSC.
"If you have been waiting for GIFT City's product ecosystem to mature before investing, April 2026 is a meaningful inflection point."
GIFT City vs LRS Which Is Right for You?
Both routes allow Indian investors to access global markets, but they work differently. The best approach for many investors is both.
GIFT City vs Offshore Hubs
How does GIFT City compare to Singapore, Dubai, and Mauritius, the traditional hubs Indian investors have used for global exposure?
vs Singapore / Mauritius
- ✓Comparable tax efficiency
- ✓Lower operational costs
- ✓Indian regulatory supervision
- ✓10-year tax holiday to 2030
vs US Brokerages
- ✓Mitigates US estate tax risk
- ✓IFSCA dispute resolution
- ✓No US probate exposure
- ✓Broader product access
vs Dubai / DIFC
- ✓Built for Indian investors
- ✓Integrates with LRS framework
- ✓FEMA compliance built-in
- ✓Domestic regulatory comfort
Tax Implications for Resident Indians
This is where confusion runs highest. Let us be precise. The advantage of GIFT City is product access and regulatory framework, not a special tax concession for resident Indians.
LRS and TCS still apply
GIFT City is foreign territory under FEMA. Investing still requires LRS remittance. TCS of 20% applies on amounts above ₹10 lakh per FY (fully adjustable).
Capital gains taxed normally
For resident Indians: STCG at slab rate (under 24 months), LTCG at 12.5% (24 months+). Same as any LRS-direct investment.
Dividends and interest at slab rate
Income from GIFT City investments added to total income. Foreign tax credits apply where DTAAs are relevant.
Schedule FA disclosure mandatory
All GIFT City holdings reported as foreign assets in your ITR, exactly like any other overseas holding.
The 'tax-free' claims don't apply to residents
Those apply to NRIs in zero-tax jurisdictions (like UAE) under Section 10(4D). For resident Indians, treatment is standard.
How to Start Investing Through GIFT City
Choose your investment vehicle
Decide whether you want a GIFT City mutual fund (managed exposure), a broker-dealer account (direct market access), or both.
Open an account
For a GIFT City broker-dealer like Valura, KYC requires PAN, Aadhaar, bank details, and standard declarations. Most processes are fully digital.
Fund via LRS
Instruct your bank to remit USD to your GIFT City account. Purpose code S0001 for equity. Bank collects TCS above ₹10 lakh.
Invest
With a broker-dealer, buy global equities, ETFs, bonds directly. With a fund, your investment is deployed per the scheme mandate.
Report and comply
Disclose GIFT City holdings in Schedule FA when filing ITR. Report dividends and capital gains. Claim FTC via Form 67 where applicable.
GIFT City Questions
Global access. Indian regulation.
Valura is an IFSCA-registered broker-dealer in GIFT City, offering Indian investors access to 1,00,000+ global securities. Equities, ETFs, mutual funds, bonds, REITs, and pre-IPO opportunities.