GIFT City Funds: Your Global Investment Gateway from India

🌍 What Are GIFT City Funds?

India’s ambition to become a global financial hub is taking a concrete form through Gujarat International Finance Tec-City (GIFT City). Designed as a tax-efficient and globally integrated financial centre, it has rapidly emerged as the go-to destination for high-value investment vehicles like Alternative Investment Funds (AIFs) and, more recently, GIFT City mutual funds and feeder funds.

At GetUltra.club, we help investors explore curated investment opportunities across categories. In this post, we dive deep into the growing ecosystem of funds in GIFT City—what they are, who they're for, and how you can benefit.

GIFT City funds are mutual fund schemes or feeder funds launched in the GIFT IFSC (International Financial Services Centre). They allow fund houses to offer globally diversified products to investors—particularly NRIs, HNIs, and foreign investors—while enjoying tax efficiency and regulatory benefits.

These funds may include:

• Feeder funds investing in offshore mutual funds

• Mutual fund schemes focused on global markets

• ETF-based products and other international asset classes

🧳 Why GIFT City Funds Matter for NRIs

NRIs often face hurdles when investing directly in India or in global markets via foreign jurisdictions. GIFT City mutual funds for NRIs address many of these challenges by offering:

✅ Tax Efficiency

• No capital gains tax for non-residents

• No dividend distribution tax (DDT)

• No withholding tax on interest income in many cases

✅ Regulatory Ease

• Regulated by the International Financial Services Centres Authority (IFSCA)

• Fund managers and custodians operate under a single regulatory framework

✅ Global Access

• Exposure to global ETFs, equity markets, fixed-income securities, and more

• Access to global funds through GIFT City feeder funds

For NRIs, this offers an opportunity to diversify portfolios internationally without routing money through third-country financial hubs like Singapore or Luxembourg.

📋 GIFT City Funds List: Key Players & Offerings

While the Gift City funds list continues to grow, here are some major names already active in the space:

1. Mirae Asset Mutual Fund – GIFT City

Launched global ETF feeder funds to offer US market exposure.

2. HDFC Mutual Fund – GIFT City Branch

Offers feeder funds investing in offshore equities and bonds.

3. SBI Mutual Fund – GIFT IFSC

Launched AIF and global mutual fund schemes tailored for NRI investors.

4. WhiteOak Capital – IFSC Mutual Funds

Focuses on structured offshore exposure via feeder structures.

These funds in GIFT City are rapidly reshaping how global capital flows into and out of India.

🔄 GIFT City Feeder Funds: Bridging India and the World

Feeder funds in GIFT City act as intermediaries that collect capital from Indian or NRI investors and channel it into global mutual funds or ETFs.

Benefits:

• Simplified global access

• Lower cost due to centralized operations

• More efficient regulatory oversight via IFSCA

📌 Example: Mirae Asset Global X feeder fund connects Indian investors to US-listed ETFs via GIFT City.

🏗️ Setting Up or Investing in GIFT City Funds

Whether you’re a fund house planning to launch a scheme or an investor exploring cross-border options, the setup process is streamlined:

1. Fund House Registration with IFSCA

2. Launch of Scheme or Feeder Fund

3. Banking & Custodian Arrangements

4. Distribution through IFSC intermediaries

✅ NRIs can invest through their NRE/NRO accounts, and in most cases, funds are maintained in foreign currency (e.g., USD), reducing FX risk.

💡 Who Should Invest in GIFT City Funds?

• NRIs & OCIs: Looking for tax-efficient, global exposure

• HNIs/UHNIs: Seeking international diversification from a regulated Indian base

• Family Offices: Wanting to allocate funds globally via a compliant structure

• Indian Residents with Liberalized Remittance Route (LRR): To invest globally within RBI limits

📈 Future of Mutual Funds in GIFT City

With regulatory support and rising demand, more AMCs are preparing to launch GIFT City-specific offerings. According to industry estimates, GIFT City could manage over $25 billion in mutual fund and AIF assets by 2026.

Recent regulatory updates from IFSCA have also:

• Simplified KYC norms for NRIs

• Allowed REITs and InvITs in GIFT IFSC

• Enabled direct listing of global funds

This positions GIFT City as a long-term strategic financial center, not just for India but for the entire South Asia region.

🧠 Final Thoughts

GIFT City funds are ushering in a new era of global investment for NRIs and Indian investors. With their tax advantages, seamless access to international markets, and growing AMC participation, these funds are poised to become a core part of any globally diversified portfolio.

❓ FAQs on GIFT City Funds

Q1: Can NRIs invest in GIFT City mutual funds?

A: Yes, GIFT City mutual funds are specifically designed for NRIs and foreign investors.

Q2: What is a GIFT City feeder fund?

A: It’s a fund that collects money in India (via GIFT City) and invests in global funds or ETFs.

Q3: Are returns from GIFT City mutual funds taxable in India?

A: For non-residents, capital gains are usually exempt, making it tax-efficient.