The pitch is simple: seamless capital flows, dollar-denominated investments, and a regulatory architecture that mirrors international standards. For investors seeking global diversification, and for Indian fund houses eyeing inbound capital, GIFT City is emerging as a credible financial gateway.

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“GIFT City is a bold vision to position India as a global financial hub," says Vaibhav Shah, Head - Products, Business Strategy & International Business at Mirae Asset Investment Managers (India). “It offers a seamless, tax-efficient, and regulatorily robust platform for capital flows—both inbound and outbound."

What’s on offer

For NRIs, one of the biggest advantages is simplified compliance—there is no tax or tax deduction at source (TDS), and investments are maintained in US dollar. While the underlying assets may be in Indian rupee, the scale of alternative investment funds (AIFs) enables better negotiation on fees.

Resident HNIs, meanwhile, benefit from access to global diversification through Overseas Portfolio Investment (OPI) under the Liberalised Remittance Scheme (LRS). While LRS limits annual remittances to $250,000 (approximately ₹2 crore), there is no mandatory minimum investment size for GIFT City funds—except what each fund may prescribe.

Shah adds, “It’s a dynamic ecosystem designed to connect India’s financial ambitions with global opportunities, offering a streamlined, world-class platform for investing in India’s growth or tapping international markets with Indian expertise."

Who can invest—and what’s live so far?

As of March, there were 229 registered funds managed by 162 Fund Management Entities in GIFT City. Category III AIFs, focused on listed markets and hedge strategies, lead with 135 funds. Category II AIFs, often used for private credit and structured investments, are growing steadily. Category I remains a niche segment, typically used for social impact or early-stage ventures.

Typical entry points for investors begin at around $150,000. However, the threshold can be lower for accredited investors, depending on the fund. For retail mutual funds, there is technically no minimum, though in practice it is expected to be around $5,000.

As per Securities and Exchange Board of India (Sebi), individuals qualify as accredited investors if they earn at least ₹2 crore annually, or have a net worth of ₹7.5 crore with at least ₹3.75 crore in financial assets. A third route applies to those with an annual income of ₹1 crore and a net worth of ₹5 crore, of which at least ₹2.5 crore must be in financial assets.

For retail mutual funds, there is technically no minimum investment, although in practice, most require at least $5,000 to participate.

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Inbound capital currently makes up over 85% of flows, underscoring GIFT City’s appeal to foreign investors. But outbound interest is rising as Indian investors seek international diversification.

Investor participation and average investment sizes vary widely across categories. Category I and II AIFs have raised $10.22 billion from 1,025 investors, averaging nearly $10 million per investor. Category III AIFs have mobilized $5.32 billion from 1,508 investors, with an average ticket size of $3.5 million. Venture Capital (VC) schemes have seen smaller inflows, raising $201 million from 469 investors—an average of about $430,000 each.

Overall, funds based in GIFT IFSC had invested $8.08 billion by March 2025. This includes $4.52 billion from Category I and II AIFs, $3.52 billion from Category III AIFs, and $42.77 million from VC schemes. Commitments raised have surged from $8.41 billion in March 2024 to $15.74 billion a year later—an impressive 87% year-on-year jump, per IFSCA data.

“We launched our GIFT City fund only this February. Our PMS offering there has doubled in AUM over the last one year," said Pramod Gubbi, Co-Founder at Marcellus Investment Managers.

GIFT City is fast becoming a compelling jurisdiction for both inbound investments from foreign and NRI investors, and outbound allocations by Indian residents—driven by regulatory clarity and tax incentives for asset and wealth managers, Gubbi added.

Easier onboarding, flexible distribution

Know Your Customer (KYC) norms have been aligned with global practices, Shah highlighted.

For outbound funds, Indian asset managers can use existing KYC registries like CVL KYC. For inbound investors, documents such as a passport and address proof are sufficient. In-person verification can be completed by overseas professionals like lawyers or bankers.

Distributors can register with the International Financial Services Centres Authority (IFSCA), although even those who aren’t formally registered may still earn referral fees. Unlike in India’s domestic mutual fund market, there’s no cap on commissions.

Retail funds face regulatory hurdles

Retail offerings from Indian asset managers are still limited.

“Retail funds in GIFT City are still taking shape and require the need for greater investor awareness," says Shah. However, he remains optimistic, pointing to ongoing efforts by both regulators and asset managers to widen access and participation.

One key bottleneck for the launch of retail mutual funds is regulatory clearance in other jurisdictions. For example, if Indian fund houses want to tap into the NRI retail investor base in the US, they may need to register with the Securities and Exchange Commission, or equivalent bodies in other countries. This cross-border compliance can be complex and time-consuming

Currency management and infrastructure gaps

To reduce transaction costs, many fund houses have partnered with IFSC-based banks for competitive forex services.

However, features like Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs) are still under development. While investors can open dollar-denominated accounts within the zone, automated investment tools are not yet functional.

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“Currently, SIPs and STPs are not operational in GIFT City accounts or wallets," Shah says.

A platform still evolving

Despite these gaps, fund houses remain bullish on the city’s prospects. With a growing number of registered funds, rising foreign interest, and supportive regulation, GIFT City is positioning itself as a credible alternative to traditional global financial centres.

“Operating under global standards, GIFT City empowers Indian businesses and investors to compete internationally, attract foreign capital, and foster innovation," Shah says.

But how quickly this potential translates into meaningful retail participation will depend on how soon the infrastructure, distribution, and regulatory bridges are fully in place.