GIFT City is India's most consequential financial infrastructure development since the opening of the economy in 1991, and most Indian investors have no idea it exists.
Here is the simplest version of why it matters: for the first time, a resident Indian can invest in global equities (US stocks, European compounders, global ETFs) without opening an overseas brokerage account, dealing with a foreign bank, or navigating complex offshore compliance. You remit USD from your Indian bank account, a SEBI-equivalent regulated fund manager invests it globally, and your returns come back in USD.
This guide covers everything you need to know: the product types, who can invest, how the money moves, and what it costs.
What Exactly Is GIFT City?
GIFT City (Gujarat International Finance Tec-City) is India's operational International Financial Services Centre (IFSC), located in Gandhinagar, Gujarat. Legally, GIFT City is treated as outside India for FEMA and tax purposes, even though it sits in Gujarat.
The regulator is IFSCA (International Financial Services Centres Authority), a unified regulatory body created by Parliament in 2019. IFSCA does for GIFT City what SEBI does for domestic markets, plus RBI's role for banking, plus IRDAI's role for insurance. One regulator, one jurisdiction.
Why this architecture matters for investors: Funds domiciled at GIFT City can operate in foreign currency (USD), make outbound global investments without the old SEBI/RBI cap restrictions, and offer tax treatment that is far more favourable than routing money through regular offshore accounts.
The Three Product Types
1. Retail Mutual Funds (Most Accessible)
GIFT City retail mutual funds are IFSCA-regulated and work like standard SEBI-regulated mutual funds: daily NAV, open-ended structure, no lock-in. The key difference is currency (USD) and direction (outbound = global equity, inbound = India equity for NRIs).
Outbound options (resident Indians can invest via LRS):
- PPFAS IFSC S&P 500 Fund of Funds: passive, USD 5,000 minimum
- PPFAS IFSC Nasdaq 100 Fund of Funds: passive, USD 5,000 minimum; AUM USD 7.44M as of April 2026
- DSP Global Equity Fund: active, 30-40 stocks globally, USD 5,000 minimum; AUM USD 28M as of April 2026
- Edelweiss Greater China Equity Fund: active, China + Taiwan + HK, USD 5,000 minimum
- Marcellus Global Equities Fund: active, quality compounders, USD 5,000 minimum
Key advantages over domestic international MFs:
- Not subject to SEBI's USD 7 billion overseas investment cap, so these funds never "gate" during high demand periods as domestic international MFs do
- No FPI license required
- LTCG at 12.5% after 24 months for residents; gains fully exempt for NRIs
2. Portfolio Management Services (PMS)
PMS is discretionary or advisory: a portfolio manager makes investment decisions on your behalf (or provides recommendations), and you directly own the underlying securities.
Three outbound PMS options are live at GIFT City as of mid-2026:
| Manager | Strategy | Min. Investment | Inception |
|---|---|---|---|
| Marcellus GCP | 35-40 North America/Europe quality compounders | USD 75,000 | Oct 2022 |
| PPFAS PPGIS | 15-25 global quality stocks, value discipline | USD 75,000 (disc.) / USD 200,000 (advisory) | Aug 2025 |
| Phillip International Pioneer | Multi-region ETF portfolio, thematic + diversified | USD 75,000 (PMS) / USD 25,000 (advisory) | Dec 2021 |
Key PMS facts:
- You own securities directly, not fund units
- Each transaction is a taxable event in your hands (unlike MF or AIF where tax can be at fund level)
- No lock-in at most GIFT City PMS products
- Management fees and performance fees are charged at the portfolio level
3. Category III AIFs (Highest Complexity, Highest Flexibility)
Category III AIFs (Alternative Investment Funds) are pooled investment vehicles. Unlike PMS, you own units in the fund, not direct securities. Tax at fund level (for Category III) means capital gains are exempt for non-resident investors.
Minimum investment: USD 75,000 (post-February 2025 IFSCA reduction from USD 150,000).
Outbound AIF options with full analysis:
- Mirae Asset Global Allocation Fund: close-ended, ETF-of-ETFs across global themes, USD 151,000 minimum
- Baroda BNP GIFT US Small Cap Fund: open-ended, US small-cap via Luxembourg UCITS feeder, USD 150,000 minimum
- ABSL Global Bluechip Equity Fund: close-ended, 20-30 global large caps, USD 150,100 minimum
- Edelweiss India Multimanager Equity Fund: inbound, FoF across top India MFs, USD 150,000 minimum
Who Can Invest, and How
Resident Indians
- Can invest in outbound products only (global equity direction)
- Money moves via LRS (Liberalised Remittance Scheme): up to USD 250,000 per financial year
- 20% TCS on LRS > INR 10 lakh, refundable via ITR
- Inbound products (India equity direction) are not accessible to resident Indians
NRIs / OCI Cardholders
- Can invest in both inbound and outbound products
- No LRS cap. Remit directly from NRE/NRO/foreign bank account
- Capital gains fully exempt from Indian tax for inbound Category III AIF
- No Indian tax filing required if income is solely from IFSC funds
- US and Canada-based NRIs excluded from most products (PFIC, FBAR concerns)
Foreign Nationals
- Access to inbound products only (India equity direction)
- Must be from FATF-compliant jurisdictions
- No PAN card required for GIFT City investments
The LRS Planning Question
If you are a resident Indian planning global investments through GIFT City, LRS capacity is the binding constraint.
USD 250,000 per financial year is the cap. For products like the Mirae AIF that drawdown USD 151,000 over two financial years (FY25-26 and FY26-27 in their schedule), you need to plan remittances across years. PMS products like Marcellus GCP or PPGIS at USD 75,000 require one year's LRS headroom.
The 20% TCS at remittance is not a tax: it is a credit against your income tax liability, refundable via ITR. For investors with significant tax liability, the net cost is zero. For those with lower liability, there is a cash flow cost until refund (typically 6-12 months post-filing).
Tax Summary
| Investor Type | Product | Capital Gains Treatment |
|---|---|---|
| Resident Indian | Outbound MF, PMS | 12.5% LTCG (>24 months), slab rate STCG |
| Resident Indian | Outbound AIF (Cat III) | 12.5% LTCG at fund level; investor gets post-tax distribution |
| NRI / Foreign | Category III AIF | Fully exempt from Indian capital gains tax |
| NRI / Foreign | Outbound MF | Exempt from Indian tax; check DTAA with home country |
Always consult your CA for personal tax planning. Tax treatment can vary by product, residency status, and DTAA provisions.
How to Choose the Right Product
| If you want... | Product to consider |
|---|---|
| Passive US large-cap exposure (cheapest) | PPFAS S&P 500 FoF: 0.30-0.50% all-in TER |
| Active global stock-picking | DSP Global Equity Fund or Marcellus GEF |
| Dedicated portfolio manager with performance-linked fee | Marcellus GCP PMS or PPFAS PPGIS |
| US small-cap exposure (contrarian) | Baroda BNP GIFT US Small Cap AIF |
| Lowest minimum entry | Phillip Advisory at USD 25,000 |
| Maximum tax efficiency (NRI) | Category III AIF: capital gains fully exempt |
The right choice depends on your investment horizon, minimum investment capacity, and whether you want active management or passive exposure. Talk to Tequity before committing capital. There is real nuance in each product.
What Tequity Covers
We have built the most comprehensive fund-level analysis of GIFT City products available in India. Our fund pages include verified performance data, portfolio snapshots, management team profiles, and honest analysis, sourced exclusively from official factsheets and AMC documents. No unverified numbers, no placeholders.
Retail Mutual Funds: PPFAS S&P 500 · PPFAS Nasdaq 100 · DSP Global Equity · Edelweiss Greater China · Marcellus Global Equities
PMS: Marcellus GCP · PPFAS PPGIS · Phillip International Pioneer
AIF: Mirae Asset Global Allocation · Baroda BNP US Small Cap · ABSL Global Bluechip · Edelweiss India Multimanager