Gujarat International Finance Tec-City better known as GIFT City represents India’s bold and ambitious answer to global financial centres like Singapore, Dubai, and Hong Kong. Located in Gandhinagar, Gujarat, GIFT City houses India’s first operational International Financial Services Centre (IFSC), and it is increasingly home to a rapidly growing ecosystem of financial products including GIFT City Funds that offer Indian residents, NRIs, and foreign investors a uniquely advantageous investment structure combining international exposure with Indian regulatory oversight.

GIFT City Funds are investment vehicles typically structured as Alternative Investment Funds (AIFs) or UCITS-like offshore funds that are domiciled within the GIFT IFSC and regulated by the International Financial Services Centres Authority (IFSCA). What makes these funds exceptional is their unique combination of features: transactions are denominated in foreign currencies (primarily USD), they can invest in global markets and securities, and they benefit from a suite of tax incentives that the Indian government has specifically granted to encourage the GIFT City ecosystem. GIFT City mutual funds are broadly categorised into two types based on the direction of capital flow inbound funds, which channel foreign and NRI capital into Indian equities and markets, and outbound funds, which allow resident Indians to invest in international equities and global opportunities through their RBI Liberalised Remittance Scheme (LRS) quota of up to USD 250,000 per financial year.

The tax benefits of investing through GIFT City are substantial. Funds domiciled in GIFT IFSC are exempt from Securities Transaction Tax (STT), Goods and Services Tax (GST), stamp duty, and certain capital gains taxes creating a tax-efficient structure that rivals the best offshore financial centres globally. For Indian resident investors who wish to diversify internationally, GIFT City funds allow exposure to US equities, global bonds, hedge fund strategies, and private equity within a transparent, RBI-regulated framework.

NRIs find GIFT City funds particularly compelling. They can invest in USD or other foreign currencies, avoiding the need to remit rupees from abroad. The legal framework, investor protections, and dispute resolution mechanisms are aligned with international standards, while the regulatory environment overseen by IFSCA ensures the same level of investor protection that SEBI provides in the domestic market. For NRIs looking to consolidate international and India-related investments under a single, transparent umbrella, GIFT City funds are an increasingly attractive proposition.

As awareness of GIFT City grows and the fund ecosystem matures, early movers stand to benefit the most from this structural opportunity. We help our clients evaluate GIFT City funds carefully assessing the fund manager’s global capabilities, the investment strategy, fee structures (which may differ from domestic norms), currency risk implications, and tax treatment in India’s hands. This is a rapidly evolving space, and our expertise helps you navigate it with confidence and clarity.