India is opening its doors wide to its global diaspora, offering not just a warm welcome but a powerful investment platform designed to deepen their participation in the country’s economic progress. At the heart of this effort lies GIFT City (Gujarat International Finance Tec-City)—India’s first International Financial Services Centre (IFSC), built to rival global financial hubs and draw in investors, especially Non-Resident Indians (NRIs).
With tax incentives, global market access, and a range of financial products unavailable elsewhere in the country, GIFT City is positioning itself as a bridge between international investors and India’s economic ambitions. For NRIs, it presents a compelling opportunity to diversify portfolios, access dollar-denominated instruments, and enjoy greater regulatory ease while remaining connected to their roots.
What is GIFT City?
GIFT City is a multi-service Special Economic Zone (SEZ) and IFSC located near Gandhinagar, Gujarat. Envisioned as India’s answer to financial centres like Dubai International Financial Centre or Singapore, it hosts a variety of institutions including banks, insurance companies, stock exchanges, and fintech startups.
What sets GIFT City apart is its status as a tax-neutral, foreign currency-enabled zone within India. This makes it possible for NRIs and foreign investors to operate in an Indian jurisdiction, but under a regulatory framework that mirrors global standards and offers significant fiscal advantages.
How GIFT City is Attracting NRIs
Recognising the enormous economic potential of its overseas citizens, India has structured GIFT City in a way that directly appeals to the investment preferences and risk appetites of NRIs. Here’s how.
1. Diverse Investment Options
GIFT City is not just about banking—it offers NRIs a wide suite of investment vehicles that include:
✅ Offshore Banking Units (OBUs)
NRIs can open foreign currency accounts with Indian or foreign banks operating within the IFSC. These accounts offer competitive interest rates and complete repatriability, along with insulation from rupee volatility.
✅ Global Equities and Bonds
Through exchanges like India INX and NSE IFSC, investors can trade in international stocks, foreign debt instruments, and mutual funds, giving them exposure to global markets while still investing from Indian soil.
✅ Alternative Investment Funds (AIFs)
With over 140 AIFs registered in GIFT City, NRIs can participate in private equity, venture capital, real estate, and structured debt vehicles. Top asset management firms such as Mirae, HDFC, and Kotak have already established presence, giving investors high-quality options.
✅ REITs and INVITs
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (INVITs) listed on IFSC exchanges offer a passive, regulated route to participate in India’s booming real estate and infrastructure sectors.
✅ Insurance Products
Insurers based in GIFT City offer unit-linked and endowment insurance plans that are free from capital gains tax if premiums are within specified limits, adding a layer of risk protection with tax efficiency.
2. Powerful Tax Incentives for NRIs
GIFT City offers a robust tax regime designed to be competitive with global financial centres:
- Capital Gains Tax Exemption: Most IFSC-listed securities are exempt from long-term capital gains tax, which can substantially improve net returns.
- Interest Income: Bonds listed before July 2023 are taxed at just 4%, while those listed later attract a concessional rate of 9%.
- Dividend Income: Taxed at a flat rate of 10%, considerably lower than India’s standard rates.
- No GST on Financial Services: Unlike in domestic operations, GST is not applicable on management fees, brokerage, or advisory services offered in GIFT City.
- No Withholding Tax: For derivatives and certain offshore structures, no withholding tax is imposed, making investments cleaner and more efficient.
These provisions mean that NRIs can enjoy global-grade investment products with far lower tax friction compared to traditional Indian investments.
3. Dollar-Denominated Investments
Another major draw is the ability to invest and receive returns in foreign currencies, mainly USD. This removes the risk of currency depreciation that plagues many NRI investments tied to INR. For example, an NRI who invests ₹1.3 crore (approximately $150,000) in a dollar-denominated AIF from GIFT City receives returns in dollars, with 0% capital gains tax, no GST, and no currency conversion losses.
4. Simplified Compliance and Digital Access
GIFT City is working to make digital onboarding for NRIs seamless. Regulatory frameworks now allow investors to complete most processes online, from KYC verification to portfolio selection. Several fund managers also offer dedicated NRI desks and concierge services to ensure a frictionless experience.
Moreover, since GIFT City operates under the International Financial Services Centres Authority (IFSCA), it enjoys a regulatory environment that combines Indian legal certainty with international flexibility.
5. What the Future Holds
The vision for GIFT City is rapidly expanding. Authorities and stakeholders are pushing forward with several NRI-focused developments:
- Dual Listing of Global Stocks on IFSC exchanges
- Sovereign Green Bonds to attract ESG-conscious investors
- Dedicated NRI Investment Portals for easy account tracking and service requests
- New Liberal Remittance Policies to simplify fund inflows
- More AIFs and REITs with ESG and tech focus
These initiatives will likely deepen NRI participation and create a vibrant international investment ecosystem within India.
Why NRIs Should Take Notice
India’s growth trajectory remains one of the strongest globally, driven by demographics, consumption, infrastructure, and digital transformation. Yet for years, NRIs struggled with access, taxation, and regulatory friction when investing in Indian markets.
GIFT City turns that paradigm on its head by offering:
- Global-style investment products
- International legal and regulatory structures
- Tax clarity and concessions
- Full capital repatriation and currency protection
- Ease of access and digital onboarding
Whether you are a business owner in Dubai, a tech professional in the U.S., or a retiree in London, GIFT City provides a gateway to participate in India’s financial future with transparency, flexibility, and confidence.
Final Thoughts
As India positions itself as a global economic powerhouse, GIFT City serves as the linchpin for cross-border financial engagement, particularly for NRIs. Its ability to combine the best of international financial services with Indian opportunity is unprecedented.
For the global Indian diaspora, GIFT City is more than an investment destination—it’s an invitation to be part of India’s next growth chapter.
