GIFT City Investment Options for NRIs: Six IFSC Products Compared

Most writing on GIFT City investment options compares the zone with something outside it: a GIFT City FD against an NRE deposit, or a GIFT City fund against a mainland mutual fund. That helps you decide whether to use the zone. It does not help once you have decided, because the products inside it differ from each other more than their shared address suggests.

A deposit, a fund, a managed account, a futures contract and a life policy sit under one regulator but under different rulebooks. They have different minimums, different exits and different lines in the Income-tax Act. Sellers' pages also disagree on basic numbers. One widely read guide gives the AIF minimum as USD 75,000; the regulation says USD 150,000.

This guide covers only what an NRI can buy inside the IFSC. It asks the same eight questions of each product and shows the answers in one table. It reflects the rules as of 15 October 2026 and is general information, not tax or investment advice. Tax and exchange control outcomes depend on your facts, so consult a qualified tax adviser in India and in the country where you live.

The shelf was assembled one product at a time, which explains why the rules do not line up neatly.

• 2015. The RBI issued its scheme for IFSC banking units on 1 April 2015. They could deal only in foreign currency and could not take money from individuals at all, including wealthy ones.
• 2017. The two IFSC exchanges opened: India INX, a BSE group company, and NSE's exchange, now called NSE IX.
• 2020 onwards. The International Financial Services Centres Authority (IFSCA) became the single regulator for banking, funds, markets and insurance in the zone. Under its banking framework, individuals can now open current, savings and term deposit accounts.
• 2022. IFSCA's first fund management regulations, notified on 13 April 2022, set up retail schemes, restricted schemes and portfolio management as separate products.
• 2023. On 3 July 2023 the Nifty futures that had traded in Singapore moved to NSE IX as GIFT Nifty, with USD 9.4 billion of open interest transferred on day one.
• 2025. The IFSCA (Fund Management) Regulations, 2025 were notified on 19 February 2025. IFSCA's press release says they cut the portfolio management minimum from USD 150,000 to USD 75,000; the restricted scheme minimum stayed at USD 150,000. From 1 April 2025 the premium caps on tax-exempt life policies stopped applying to policies issued from the IFSC. In September 2025 an inbound retail fund with a USD 500 minimum was approved.
• 2026. The Income-tax Act, 2025 applied from 1 April 2026 and renumbered every IFSC provision. The fund regulations were last amended on 10 September 2026.

By March 2026, funds in the IFSC had raised cumulative commitments of more than USD 39 billion, according to IFSCA data reported by Business Standard.

The table gives the regulatory position for a non-resident individual. A fund, bank or insurer can set stricter terms than the regulation, so the offer document always wins.

The tax column applies only while you are non-resident under the Income-tax Act for the year. It says nothing about tax where you live. A resident Indian reads a different table altogether, which our guide to GIFT City funds for residents covers.

Offer documents still quote the 1961 Act. From tax year 2026-27 the same rules sit in the Income-tax Act, 2025, in force from 1 April 2026.

Our GIFT City tax benefits guide explains each exemption in full; here they are inputs to a product choice.

An IFSC banking unit is a branch of an Indian or foreign bank inside the zone. IFSCA data cited by Business Today in September 2026 counted 20 such units taking part in a single RBI facility, though not all of them serve individuals.

Accounts are held in freely convertible foreign currency. The dollar is standard and some banks add pounds, euros or others. Rupee accounts are not allowed. No single regulatory minimum applies; each bank publishes its own, along with its tenure grid. Published cards in 2026 show a GIFT City FD running from as little as seven days up to five years, against the one-year floor that the RBI sets for FCNR(B) deposits. Rates move with dollar interest rates and differ by bank, so read the bank's current card instead of a comparison blog.

This is the fact most sales pages leave out. The RBI's 2015 scheme says, "Deposits of IBUs will not be covered by deposit insurance," and adds that no liquidity or lender-of-last-resort support will come from the RBI. Banks repeat the point in their own FAQs today. An NRE or FCNR(B) deposit is insured up to the DICGC limit; a deposit with an IFSC banking unit is a plain claim on the bank. Choose the bank accordingly.

Interest is left out of a non-resident's income by Schedule IV Sl. No. 8 of the 2025 Act (old section 10(15)(viii)), and section 393(8) (old 197A(1D)) means no tax is deducted. The same relief covers a person who is not ordinarily resident and ends once you become ordinarily resident. The balance is a foreign currency balance with an institution that exchange control law treats as resident outside India, so it is not NRO money.

What people call GIFT City mutual funds are, in the regulations, retail schemes. They are the only pooled product in the zone built for small tickets.

Two kinds exist. Inbound funds take foreign currency from NRIs, OCIs and foreigners and invest in India, often as feeders into Indian mutual funds and ETFs. Outbound funds take money from resident Indians under the remittance scheme and invest abroad. An NRI looking for India exposure wants the first kind. Feeder structures add a layer of cost, which our GIFT City fund of funds guide examines.

Regulation sets no general minimum for a retail scheme. Fund houses choose their own.

• Tata India Dynamic Equity Fund – GIFT IFSC. IFSCA approval was reported by Business Standard on 17 September 2025. It is an inbound feeder into Indian equity mutual funds and ETFs with a USD 500 minimum, open to NRIs, OCIs and foreign individuals from FATF-compliant jurisdictions.
• Parag Parikh IFSC S&P 500 and Nasdaq 100 funds of funds. PPFAS GIFT cut their minimum from USD 5,000 to USD 500 from 25 August 2026, Business Today reported. These are outbound funds aimed at resident investors, so they show the other half of the shelf.

Availability and terms change; confirm them with the fund house.

A retail scheme needs at least 20 investors, none holding more than 25%. An open-ended scheme must publish NAV daily and may hold at most 15% in unlisted securities. A close-ended scheme runs for at least three years and must be listed if its minimum is below USD 10,000.

On tax, the question is whether the scheme is a specified fund, meaning all units other than the sponsor's or manager's are held by non-residents. If it is, Schedule VI Sl. No. 9 (old section 10(23FBC)) exempts what you receive from the fund and your gain on redemption. The fund itself pays tax under section 210 (old 115AD) on Indian income. A scheme that admits resident money is outside this rule. How these funds compare with regular Indian mutual funds is a separate question that our companion comparison handles.

A restricted scheme is the regulation's name for a privately placed fund. Each one is filed as a Category I, II or III AIF. Regulation 32 of the IFSCA (Fund Management) Regulations, 2025 sets the entry price for a GIFT City AIF at USD 150,000 per investor and caps a restricted scheme at 1,000 investors.

• An accredited investor faces no minimum.
• Employees, directors and designated partners of the fund manager can invest from USD 40,000.
• An investor and a spouse, parent or child can invest jointly and count their combined USD 150,000.

Venture capital schemes are a tighter variant: USD 250,000 and no more than 50 investors.

A restricted scheme can be open-ended or close-ended, and its placement memorandum sets the lock-in and redemption windows. NAV must reach investors at least monthly for an open-ended scheme and half-yearly for a close-ended one, so do not expect daily pricing.

Tax follows the category. A Category III GIFT City AIF held only by non-residents can be a specified fund, which gives the same investor-level exemption as a retail scheme. Business Standard reported one such launch on 11 August 2026: The Wealth Company IFSC FoF, an open-ended Category III fund of Indian mutual funds that excludes residents of the US and Canada. Category I and II funds are pass-through under section 224 (old 115UB). Income from their Indian investments is taxed in your hands, while income from offshore investments is not taxable in India for a non-resident, as CBDT Circular 12/2023 confirms. Our GIFT City Category III AIF guide goes deeper.

A GIFT City PMS is a managed account, not a fund. Regulation 77 bars a manager from accepting funds or securities worth less than USD 75,000, a threshold that does not apply to accredited investors.

Your money can stay in your own bank account, with a banking unit, a bank in India or a bank abroad, provided the manager is authorised to operate it. It can also sit in the manager's designated account or with a regulated broker. The manager must segregate each client's securities, appoint a custodian and send periodic reports covering holdings, transactions and expenses.

Because you own the securities, there is no fund-level wrapper. Schedule VI Sl. No. 7 (old section 10(4G)) exempts a non-resident's portfolio income only to the extent it accrues outside India. Gains on Indian listed shares are taxed as for any non-resident: 20% short-term and 12.5% long-term above Rs 1.25 lakh under sections 196 and 198 (old 111A and 112A). Expect to need a PAN and to file a return. A GIFT City PMS therefore fits a global mandate better than a pure India one.

You can also skip the manager and trade through a member of an IFSC exchange. This needs a separate trading and demat account in the zone; a mainland NRE-linked account does not work.

GIFT Nifty contracts are dollar-denominated futures and options on Indian indices. At launch, NSE IX said trading would run about 21 hours a day in two sessions, from 6:30 am to 2:45 am India time. Contract sizes and margins are set by the exchange and change, so check current specifications. These are leveraged instruments in which losses can exceed the margin posted. For most NRIs, GIFT Nifty is a tool for reading market direction or hedging, not a long-term holding.

NSE IX also trades unsponsored depository receipts on US shares. A Zerodha explainer in May 2025 counted 50 stocks, held through HDFC Bank's IFSC branch as custodian, and noted that residents of the US and Canada were excluded. Both exchanges list foreign currency bonds; Indian banks raised USD 11.12 billion that way between April and August 2026. Check the minimum trade size with a broker before assuming an individual can buy them.

Under section 70(1)(r) (old 47(viiab)), a non-resident's sale of a derivative, a specified bond or a notified security on an IFSC exchange for foreign currency is not regarded as a transfer, so no capital gain arises. No securities transaction tax or stamp duty applies either, according to a tax note that EY prepared for IFSCA. Two limits matter. Interest on IFSC-listed bonds of Indian companies is still taxed at 4% or 9% by issue date. And if frequent derivative trading amounts to a business, the capital gains rule may not settle the matter; ask your adviser. The treatment of US stock receipts should be confirmed too.

Insurers can sell foreign currency policies to non-residents from an IFSC Insurance Office. In February 2025, Mint reported six life insurers present and named three products: IndiaFirst Life's Wealth Wise, a unit linked plan; HDFC Life International's US Dollar Global Education Plan, also unit linked; and Tata AIA's Life Protect Supreme, a term plan. In July 2026, Business Today reported that Policybazaar had begun distributing dollar term plans with remote onboarding. Check what is on sale now.

The tax point is specific. Schedule II Sl. No. 2 (old section 10(10D)) exempts life insurance proceeds only if conditions are met. For a policy issued by an IFSC Insurance Office on or after 1 April 2025, the annual premium caps of Rs 2.5 lakh for unit linked plans and Rs 5 lakh for others no longer apply. The condition that the premium must not exceed 10% of the sum assured still does. A unit linked plan is a long contract with its own charges and surrender terms, so compare it with a retail scheme plus term cover.

Access used to mean couriered, attested paperwork. That is changing.

• Video KYC. A law-firm summary of an IFSCA circular dated 2 January 2026 says low-risk NRIs in a list of jurisdictions that includes the US, UK, Canada, UAE and Singapore can be onboarded by video, and that accounts may open in debit-freeze mode while address checks finish. We have not read the circular itself, so confirm with your bank or fund house.
• Daily pricing. Open-ended retail schemes publish NAV every day, which lets distributor apps show holdings the way mutual fund apps do.
• Online reporting. Portfolio managers may deliver client reports through a restricted-access portal.
• Long market hours. GIFT Nifty trades through most of the Asian, European and US day.
• Fractional receipts. US stock receipts represent a fraction of a share and sit in an IFSC demat account.

The practical effect is that the whole shelf can be funded from an overseas bank account by wire, in the currency you earn.

1. One currency from entry to exit. Every product is denominated in foreign currency, so you do not convert into rupees and back at the account level. Currency risk moves into the assets; it does not disappear.
2. One regulator. IFSCA supervises the bank, the fund manager, the exchange and the insurer.
3. A ladder of ticket sizes. You can start with a deposit or a USD 500 retail fund and move to portfolio management at USD 75,000 or a GIFT City AIF at USD 150,000.
4. Clear Indian tax positions for non-residents. Deposit interest and specified fund income are exempt in your hands by statute, without a treaty claim.
5. No transaction taxes on IFSC exchange trades. Securities transaction tax, commodities transaction tax and stamp duty do not apply.

These features make paperwork lighter. A non-resident whose only Indian income is exempt deposit interest or specified fund income has little to report in India, and because exchange control law treats an IFSC institution as a person resident outside India, money held in the zone is not caught by the annual ceiling that applies to NRO balances. Our repatriation guide sets out the mechanics.

Start with three questions: how much, for how long, and where you pay tax.

Country of residence can override the table. Gulf residents with no personal income tax keep the Indian exemption whole. Residents of the UK, Canada, Australia or Singapore should expect home-country tax and should check how an offshore fund is classified there. A US person's holding in any foreign pooled fund is presumptively a PFIC, reported each year on IRS Form 8621, and several GIFT City funds do not accept US or Canadian residents at all. If you plan to move back to India, most of these exemptions end with your non-resident status, a point our returning-NRI guide covers. Whether the zone is worth the effort for small sums is a separate question with its own guide.

Once the table has narrowed you to a pooled product, the hard part is choosing between funds. That is the part PMS Sahi Hai is built for. To be clear about scope: the platform covers GIFT City funds. It does not list IFSC bank deposits, exchange-traded contracts or insurance policies, so for those rows of the table you still go to the bank, broker or insurer directly.

The GIFT City view of the comparison shelf puts dollar funds next to PMS and AIF strategies, with filters by fund house, benchmark and style, sorting by return period or Nyra Score, and a side-by-side view of up to four strategies. Each strategy page shows the minimum, exit load, benchmark, track record, reporting frequency and a short "best suited to" note. Some fields are still blank for younger funds, and a minimum shown on a page is a starting point, not a substitute for the placement memorandum. Use the shelf to shortlist, then check each name against the eight questions in the master table.

Nyra is PMS Sahi Hai's AI research analyst. Its stated rules suit a product shelf this young: it is grounded in SEBI, AMC and IFSCA primary sources, links each answer to a public document, and declines to answer when no verifiable source exists. It is an analytical tool, not a SEBI-registered investment adviser, and its output is informational, not personalised advice.

Three practical uses for an NRI:

• Check the structure. Ask whether a fund is a retail or restricted scheme, which category it is filed under, and whether it is open to residents. That last answer decides whether it can be a specified fund.
• Read the score properly. The Nyra methodology scores five pillars on a 0–10 scale and marks any strategy with under 12 months of track record as Not Rated. Many GIFT City funds launched in 2025 or 2026, so expect gaps, and treat a missing score as missing evidence, not a verdict.
• Map the route. The GIFT City page in the NRI hub sets out the dollar-in, dollar-out route; pair it with the tax and repatriation guides linked above.

• No deposit insurance. A GIFT City FD is only as safe as the bank behind it.
• High entry for anything beyond retail funds. USD 75,000 and USD 150,000 are large single commitments, and spreading across managers multiplies them.
• Short track records. The named retail launches date from 2025 and 2026.
• Conditional tax relief. The investor-level exemption depends on the fund staying a specified fund and on you staying non-resident. Ask the manager for written confirmation of the fund's status.
• Home-country tax. India's exemption does not bind any other tax authority.
• Layered costs. Feeders pay the underlying fund's expenses plus their own.
• Slower exits than they look. Close-ended retail schemes run for at least three years, and restricted schemes may price only monthly or half-yearly.
• Leverage. Derivative losses can exceed margin.
• A young rulebook. The fund regulations were replaced in 2025 and amended twice in 2026.

The six products share a postcode and a regulator, and little else. Deposits are simple and tax-exempt but uninsured. Retail schemes are the practical entry for most NRIs. Restricted schemes and portfolio management are for larger sums and need a closer reading of documents. Exchange trading is for people who already trade. Insurance answers a protection need, not an investment one.

Work out your cheque size, horizon and home-country tax first. Then use the table to shortlist one or two products, and ask each provider for the fund's tax status, minimum, exit terms and total costs in writing. For the fund rows, PMS Sahi Hai's shelf and Nyra can speed up the shortlist and surface the sources behind each figure. Take that file to a tax adviser before you transfer money.

Print the master table, mark the two rows that match your cheque size and horizon, and collect the offer documents for those products only. Check the fund manager, bank or insurer on IFSCA's public registers. If a GIFT City fund is on your list, compare it on PMS Sahi Hai, ask Nyra for the source behind each number, or book a 15-minute call with the team. Then book time with a tax adviser who understands both India and your country of residence, and decide with the full file in front of you.