How Can NRIs Invest in GIFT City

Introduction

As of 2025, GIFT City includes 32 banks, more than 337 capital market intermediaries, 32 fintech entities, 47 insurance and reinsurance firms, and over 272 Alternative Investment Funds (AIFs). The fact that it is an investor magnet doesn’t come as a surprise. For NRIs, GIFT City presents multiple attractive investment opportunities and advantages, including tax benefits. The ease of investing in the GIFT City further enhances its appeal to NRI investors.

In this blog, we will cover:

• What investment opportunities does GIFT City present to NRI investors
• The different currency accounts at GIFT City
• The different stock, power, and bullion exchanges at GIFT City
• The benefits of investing in GIFT City

Understanding GIFT City: India’s Global Finance Hub

GIFT City, the Gujarat International Finance Tech-City, is India's first attempt to establish a global financial centre. Designated as a Special Economic Zone, it has a plethora of benefits—especially for NRIs and foreign investors.

Since 2015, the Reserve Bank of India has treated the International Financial Services Centre (IFSC) as a Non-Resident area. This designation makes it possible for transactions to take place in foreign currency, providing a haven for international finance.

Currency Accounts at GIFT City

Banks operating within GIFT City provide offshore banking services through their International Banking Units (IBUs). Investors can open foreign currency accounts in multiple denominations. These multi-currency offerings enable greater financial flexibility and strategic global diversification.

Market Infrastructure

International Financial Services Centres Authority (IFSCA) regulates the GIFT IFSC, where you will find two major exchanges:

• India International Exchange (IFSC) Limited (India INX)
• NSE IFSC Limited (NSE IX)

You can trade in equity (including overseas), derivatives, and debt instruments via these platforms. GIFT IFSC also includes:

• India International Bullion Exchange (IIBX): Facilitates only physical delivery

Investment Opportunities in GIFT City

GIFT City investments allow NRIs and other foreign nationals to invest in diverse financial products. Here are the investment opportunities that await:

Foreign Currency Banking Accounts

NRIs can hold Global Savings Accounts in different foreign currencies. These accounts may be single or joint ownership and have nomination facilities. One can opt to hold money in a single or multiple currencies.

Currently, Kotak offers only a USD-dominated current account.

Offshore Deposits

Offshore fixed deposits are another highly sought-after option. Such accounts provide tax-exempt interest income according to the IFSC regulations. Terms and available currencies can differ between banks. Normally, deposits can be made from 7 days up to five years.

Alternative Investment Funds (AIFs)

AIFs are investment vehicles that pool money from various investors. In GIFT City, there is a minimum contribution of USD 150,000 with a lock-in period of three years. AIFs are divided into three categories:

• Category I: Invests in early-stage startups, social impact funds, infrastructure, and SMEs
• Category II: Private equity and debt funds
• Category III: Hedge funds and short-term trading strategies

Portfolio Management Services (PMS)

NRIs may choose to invest in PMS to gain exposure to customised investment techniques handled by experts. PMS provides exposure to a variety of instruments, including equities, fixed income, and money markets. Investments in PMS done through GIFT City in notified securities may be tax-exempt.

PMS providers generally invest in:

• Securities traded on GIFT City exchange
• Instruments by GIFT City-registrants
• Financial instruments issued by Indian or offshore firms

REITs and INVITs

For NRIs seeking diversification into property or infrastructure without the hassles of property ownership, listed Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (INVITs) in IFSC exchanges provide a cost-effective alternative.

Note: GIFT ISFC also offers feeder funds and fund-of-funds (FOF) structures. To understand more, contact our GIFT city representatives.

Why GIFT City is an Attractive Destination for NRIs

For NRIs, GIFT City investment opens the door to a wide range of financial benefits via its internationally aligned infrastructure and regulatory framework.

Varied Investment Opportunities

GIFT City enables NRIs to diversify their investments by providing regulated access to various investment opportunities, such as mutual funds, offshore financial instruments, and even real estate, all under one integrated financial ecosystem.

Tax Benefits

One of the biggest attractions for NRIs is the tax efficiency of investment through GIFT City. Lower capital gains tax and exemptions on certain investment income enhance returns, and it is a wise decision for long-term wealth planning.

International Market Participation

By means of exchanges such as India INX and NSE IFSC, NRIs have access to direct participation in global financial markets. Whether it's foreign currency trade or derivatives access, GIFT City provides great connectivity supported by robust infrastructure and offshore wealth solutions.

Investment Experience: Before and After GIFT City

Scenario 1: Before GIFT City

Rohan, an NRI residing in the UAE, invests ₹90 lakh in India. His options were limited:

• Limited Options: He could invest in mutual funds through NRE account or NRO accounts but needed to navigate through a labyrinth of FEMA and RBI regulations.
• Real Estate Issues: Property investments involved low liquidity, lengthy documentation, and uncertain timelines.
• Tax Burdens: Income from interest and capital gains was taxed under DTAA regulations with limited repatriation options.

Scenario 2: Post GIFT City

Rohan invests the same ₹90 lakh in a USD-denominated Alternative Investment Fund (AIF) in GIFT City:

• No Ownership Restrictions: No regulatory restrictions on asset ownership or caps on investments.
• USD Returns: His returns are in US Dollars, which avoids exchange rate risks.
• Tax-Efficient: No capital gains tax on listed IFSC securities.
• No GST: Fees for management and administration are GST-exempt under the IFSC regulation.

Wrapping Up!

The many advantages the GIFT City offers, with access to a wide array of investment options, completely justify the growing interest, especially from NRIs. Kotak Mahindra Bank set up its International Financial Services Centre Banking Unit [IBU] in GIFT City in 2016. It caters to a global customer base with a versatile bucket of products and services. Take a look at the different investment options and invest via Kotak with zero hassle.